Behind The Numbers – Casey’s General Stores (CASY)
In a January 11th Home Page write-up (See HERE), we called out a Form 4 filing for CASY that saw an insider purchase by Director Maria Moats, marking the first insider purchase in CASY since July 1st, 2025 when Director Mike Spanos bought 200 shares for $100,636. Nearly one week prior, on January 5th, Wells Fargo analyst Edward Kelly added the stock its Q1 Tactical Ideas List. Ultimately, both of these were well-timed with the stock hitting 52-week highs in yesterday’s session following the company’s Q3 earnings report.
Management called out that total inside sales for the quarter were $1.48B, an increase of $80M or 5.7% from the prior year. Prepared Food and Dispensed Beverage sales rose by $26M to $423M, an increase of 6.5% while Grocery and General Merchandise sales increased by $54M to $1.06B, an increase of 5.4%. Prepared Food and Dispensed Beverage margins came in at 58.3%, up 50bps from prior year while Grocery and General Merchandise margins were 35.7%, an increase of 150bps from the prior year.
Inside same-store sales were up 4% for the third quarter or 7.9% on a 2-year stack basis with an average margin of 42.2%. Same-store Prepared Food and Dispensed Beverage led the way, as sales were up 4.3% or 9.2% on a 2-year stack basis with an average margin of 58.3%. Continuing the momentum from the prior quarter, whole pizzas and hot sandwiches in all dayparts performed well during the quarter.
Same-store Grocery and General Merchandise sales were up 4% or 7.4% on a 2-year stack basis, with an average margin of 35.7%. Energy drinks and nicotine alternatives continued to outperform the category with double-digit growth. During the call, management would highlight:
“Energy was up about 14% in the quarter.”
“The other thing I would call out is the nicotine category, and that’s a combination of a couple of things. The combustible cigarette mix has gone down, and that’s the lowest margin part of that subcategory. The nicotine alternatives, so I think the pouch business is up 31% in the quarter. Vapor was up another 12% as enforcement actions against illicit vape have improved. And so those both carry more than double the margin rate of combustible cigarettes.”
Elsewhere, management was asked questions related to Iran headlines and its impact on fuel sales:
“We’re still not seeing any sort of behavior change. In the event that we start to get up into that close to $5 a gallon range, we certainly will do some things to encourage demand. But as it stands right now, our traffic to our stores has been positive.”
“So over the course of the cycle, it historically has ended up being a net positive from a fuel margin standpoint. But it is a little bit of tightening on the front end, a little bit of expansion on the back end. When we look at the history from the most recent event with the Ukraine war, that’s exactly what played out. Margins did get a little bit compressed, but not bad.”
Lastly, per KeyBanc’s most recent Geolocation Trends note, they would call out CASY as having the strongest set of data highlighting Q4TD traffic increasing 6.7% from 2.5% in Q3.
