# Casey's General Stores, Inc. (CASY) — Narrative, Fiscal 2027 First Quarter

Casey's fiscal year runs from May 1 to April 30. "Fiscal 2026" is the year ended April 30, 2026, and the first quarter of fiscal 2027 is the three months ended July 31, 2026. Casey's reports in thousands of US dollars; amounts here are rounded to millions or billions.

## Business

*From the fiscal 2026 Form 10-K, accession 0000726958-26-000046 (filed June 22, 2026).*

Casey's runs convenience stores that sell fuel, a broad grocery and general merchandise assortment, and restaurant-style prepared food, led by pizza. Most of its stores are in small Midwestern towns. Fuel brings in most of the revenue, but most of the profit comes from food and merchandise sold inside the store. At April 30, 2026 the company operated 2,944 stores in 19 states, about half of them in Iowa, Missouri and Illinois. About 71% of stores are in communities of fewer than 20,000 people, which are often not served by national convenience chains. Casey's owns and operates its own stores rather than franchising them, and it owns substantially all of their real estate (it leased land and/or buildings at 241 locations). In its June 2026 Investor Day presentation (Form 8-K, accession 0001140361-26-026167), it describes itself as the third-largest convenience store chain and the fifth-largest pizza chain in the United States. The company was incorporated in Iowa in 1967 and has its headquarters, the "Store Support Center", in Ankeny, Iowa.

Casey's reports one segment but discusses results in four revenue categories. In fiscal 2026 the company had total revenue of $17.56 billion and revenue less cost of goods sold (excluding depreciation and amortization; "gross profit" in the company's earnings releases) of $4.32 billion:

- **Fuel:** $10.62 billion of revenue (60.4% of the total) and $1.50 billion of gross profit, on 3.52 billion gallons at an average margin of 42.6 cents per gallon. All but six stores sell fuel, mostly under the Casey's name. EV charging was available at 64 stores.
- **Grocery and general merchandise:** $4.56 billion of revenue and $1.64 billion of gross profit (35.8% margin). This covers more than 3,000 packaged items per store: non-alcoholic and alcoholic beverages, snacks, tobacco and nicotine, frozen foods, non-food items and services such as lottery. Private-label products are part of the mix.
- **Prepared food and dispensed beverage:** $1.78 billion of revenue and $1.04 billion of gross profit (58.6% margin). This is the company's highest-margin category. Pizza is the flagship (sold since 1984 and available in almost all stores), alongside sandwiches, bakery items and dispensed beverages. Bone-in and boneless wings were in about 850 stores at year-end, and the company plans to roll them out to the rest of the chain.
- **Other:** $605 million of revenue, mainly wholesale fuel sold to dealer sites Casey's does not operate (about 3% of total revenue), plus car washes and lottery.

Over the last three fiscal years, inside-store sales (prepared food plus grocery and general merchandise) made up about 36% of revenue but about 63% of gross profit. The Casey's Rewards loyalty program had more than 10 million members at year-end.

Casey's is vertically integrated. It runs three distribution centers (Ankeny, Iowa; Terre Haute, Indiana; Joplin, Missouri), which supply most stores within a radius of about 500 miles. Some stores farther away, in Florida for example, are served by a third-party distributor. Casey's self-distributes most of its fuel with a fleet of more than 500 tractors, and it owns a fuel terminal in Waco, Texas. Stores are usually open at least 16 hours a day. Sales are seasonal: the first and second fiscal quarters (May through October) are the strongest, because warmer weather lifts fuel volumes and sales of drinks and ice.

Acquisitions are a regular source of growth. Acquired stores are rebranded "Casey's" once a full kitchen is installed. Stores that cannot take a full kitchen operate as "GoodStop (by Casey's)" or under the acquired brand. The largest acquisition was Fikes Wholesale and Group Petroleum Services ("Fikes"), owner of CEFCO Convenience Stores, which closed on November 1, 2024 for $1.17 billion. It added 198 stores (148 in Texas and 50 in Alabama, Florida and Mississippi), the Waco terminal and a wholesale fuel network. In fiscal 2026 Casey's closed or divested all ten CEFCO stores it had acquired in Mississippi.

At April 30, 2026 the company had 23,490 full-time and 26,358 part-time employees ("Team Members"), about 94% of them in stores. None is covered by a collective bargaining agreement.

## Risk factors

*From the fiscal 2026 Form 10-K, accession 0000726958-26-000046. The fiscal 2027 first-quarter Form 10-Q (accession 0000726958-26-000085) reports no material changes to these risk factors.*

The company's own figures show where the main exposures are:

- **Fuel margin volatility.** Over the past three fiscal years, retail fuel averaged about 62% of revenue and about 34% of gross profit. Crude oil and wholesale fuel costs are volatile and are affected by war, instability in oil-producing regions (the filing names the Middle East, South America and Europe), refinery capacity and severe weather. Higher pump prices can also reduce demand for fuel and for other purchases. Cents-per-gallon margins were historically high in fiscal 2026, especially in the fourth quarter, and the company warns that this metric can swing significantly and unpredictably.
- **Long-term decline in fuel demand.** Better fuel efficiency, emissions rules, and a shift to electric, hybrid or other alternative-fuel vehicles could reduce demand for the company's largest product and change how often guests visit.
- **Competition.** The industry is easy to enter and includes convenience chains, supermarkets, club stores, mass merchants, dollar stores and quick-service restaurants. Some competitors are larger, have stronger fuel supply arrangements, or use fuel and in-store discounts aggressively.
- **Food safety and food costs.** A foodborne-illness event or a supplier failure could damage the brand and hit prepared food sales. Commodity inflation is a direct exposure, especially for cheese, which is the company's largest food cost.
- **Tobacco and nicotine.** These products have averaged about 9% of revenue and about 9% of gross profit. They are exposed to FDA regulation, excise tax increases, minimum-age changes, and the possible loss of manufacturer rebates, which are recorded as a reduction of cost of goods sold.
- **Labor costs and availability.** State minimum-wage increases and wage pressure have already raised operating expenses significantly. Shortages of store staff, drivers and distribution workers could disrupt operations.
- **Credit card fees.** Interchange fees rise with pump prices and sales volume. They totaled $279 million in fiscal 2026, and the company has little control over them.
- **Cybersecurity and IT.** Casey's handles large amounts of payment card and personal data and relies heavily on third-party software. A breach could lead to litigation, card-brand claims and lost guest trust. The company notes that AI may make attacks harder to detect. As of the 10-K, no cybersecurity incident had had a material effect.
- **Fuel handling hazards.** Casey's stores fuel at its stores and terminal and carries much of it in its own trucks. Fires, spills or accidents could bring environmental, injury and property liabilities that insurance may not fully cover.
- **Weather and geography.** Most stores and all three distribution centers are in the Midwest, where tornadoes, flooding, ice and heavy snow are risks. Florida stores face hurricanes. Results depend on favorable weather in the first and second quarters.
- **Acquisitions.** Growth depends on finding, financing and integrating stores. Risks include hidden liabilities, systems strain, permit and license delays, and missing the cost savings the company expects.
- **Debt covenants.** The senior notes and credit facility carry financial maintenance tests. A breach could accelerate repayment.
- **Regulation and litigation.** The company is subject to rules covering food, environmental matters (underground storage tanks), labor, accessibility, age-restricted products and data privacy, and faces wage-and-hour and consumer class-action risk.
- **Takeover defenses.** The board can issue up to one million preferred shares without a shareholder vote. Iowa law restricts business combinations with an interested shareholder for three years and lets the board consider stakeholders other than shareholders when weighing a takeover proposal.

## Management's discussion of fiscal 2026

*From the fiscal 2026 Form 10-K, accession 0000726958-26-000046, Item 7.*

Fiscal 2026 was the last year of the three-year strategic plan announced in June 2023, and the company reports that it beat the plan's targets. Casey's built or acquired 504 stores over the three years against a goal of 350. Diluted EPS for fiscal 2026 was $19.16, up 30.9% on the prior year, a 17.2% annualized growth rate over the three years.

**Revenue.** Total revenue rose $1.62 billion (10.2%) to $17.56 billion. Of the increase, $1.03 billion came from the Fikes stores in the first six months of the year, the period that had no Fikes stores in the prior-year comparison. Prepared food and dispensed beverage revenue rose 10.2%: same-store sales rose 5.2% (hot sandwiches, bakery and whole pizzas) and store growth added about 5.0%. Grocery and general merchandise revenue rose 10.1%: same-store sales rose 3.9% (led by non-alcoholic beverages) and store growth added about 6.2%. Retail fuel revenue rose 8.6%, as a 10.0% increase in gallons sold, mostly from store growth, more than offset a 1.3% lower average retail price. Same-store gallons rose 1.4%. Other revenue rose 47.9%, mainly from Fikes wholesale fuel. It also included a one-time $8 million gift card breakage adjustment in the second quarter.

**Margins.** Total gross profit was 24.6% of revenue, up from 23.5%. The prepared food margin improved to 58.6% from 58.2%, mainly because of lower waste, and the grocery margin improved to 35.8% from 35.0% on a favorable product mix. The fuel margin rose to 42.6 cents per gallon from 38.7 cents. Renewable fuel credits (RINs) generated $35.4 million, up from $16.7 million.

**Costs.** Operating expenses rose 11.2% to $2.84 billion. About 5 percentage points of the increase came from operating more stores (including a full year of Fikes), about 2 points from higher variable compensation and charitable contributions, and about 1 point from same-store wages, which were partly offset by fewer labor hours. Depreciation and amortization rose 11.5% to $450.0 million. Net interest rose 15.1% to $96.6 million because of the $1.10 billion of debt raised to fund Fikes. The effective tax rate was 23.8%, up from 23.3%.

**Earnings.** Net income rose 30.7% to $714.4 million. EBITDA, a non-GAAP measure the company defines as net income before net interest, income taxes, and depreciation and amortization, rose 23.6% to $1.48 billion.

**Cash flow and capital.** Operating cash flow was $1.38 billion, up from $1.09 billion. Spending on property, equipment and acquisitions was $797.5 million, compared with $1.75 billion in fiscal 2025, which included Fikes. The company acquired 40 stores during the year for $141.6 million in cash. Store count went from 2,904 to 2,944: 40 stores built, 40 acquired, 1 previously acquired store opened and 41 closed. Share repurchases used about $199.8 million more cash than in the prior year. Declared dividends totaled $2.28 per share, up from $2.00. Impairment charges were $9.8 million, up from $4.1 million. At April 30, 2026, debt including finance leases was $2.43 billion. It consisted of senior notes in Series A through J with coupons between 2.85% and 5.43%, a $200 million term loan, and a $796.9 million incremental term loan. The $850 million revolving credit facility and $50 million bank line were undrawn. The current ratio improved to 1.01 to 1 from 0.92 to 1.

## Current quarter: first quarter of fiscal 2027 (three months ended July 31, 2026)

*From the Form 10-Q for the quarter ended July 31, 2026 (accession 0000726958-26-000085) and the earnings release furnished as Exhibit 99.1 to the Form 8-K of September 8, 2026 (accession 0000726958-26-000084).*

Q1 diluted EPS rose 27.7% to $7.37, up from $5.77. Net income was $273.7 million (up 27.1%) and EBITDA was $485.1 million (up 17.1%). The company attributes the gain to higher gross profit both inside the store and in fuel, partly offset by higher operating expenses. This was the first quarter of the new three-year plan, and management said integration of the Fikes acquisition was running ahead of schedule.

**Revenue rose 24.3% to $5.68 billion, driven mostly by fuel prices.** Retail fuel revenue rose 36.3%, because the average retail price per gallon was up 33.0% and gallons sold rose 2.5% to 934.2 million. The extra gallons came from having 64 more stores than a year earlier, as same-store gallons slipped 0.3%. Because of the higher pump prices, total gross profit fell to 21.8% of revenue from 24.4%, even though gross profit in dollars rose to $1.24 billion from $1.11 billion.

**Inside the store,** sales rose 5.6% to $1.78 billion. Inside same-store sales rose 3.2%, or 7.7% on a two-year stacked basis:

- Prepared food and dispensed beverage same-store sales rose 4.8%, mainly on higher traffic led by whole pizzas. Category revenue was up 7.4% at $492.6 million.
- Grocery and general merchandise same-store sales rose 2.7%, mainly on non-alcoholic beverages. Category revenue was up 4.9% at $1.28 billion.
- The inside margin was 42.2%, up from 41.9%. The prepared food margin rose to 59.3% from 58.0% and the grocery margin eased to 35.6% from 35.9%. The company says these category margins moved mainly because it refined how certain distribution costs are allocated between the two categories. Inside gross profit rose 6.3% to $749.8 million.

**The fuel margin was 47.8 cents per gallon, up from 41.0 cents**, and fuel gross profit rose 19.6% to $446.9 million. Management says industry fuel margins were historically high during the quarter and warns that they can change unpredictably. RIN-related activity brought in $25.7 million, up from $6.7 million, but higher related costs offset it, so the net effect on fuel margin was minimal. Other revenue, mainly wholesale fuel, rose 17.6% on higher fuel prices.

**Operating expenses rose 8.0% to $754.1 million.** About 2 percentage points of the increase came from the larger store base, about 1.5 points from same-store credit card fees, about 1 point from same-store employee costs (higher wage rates, with labor hours nearly flat) and about 1 point from insurance. Credit card fees were $85.7 million, up from $71.7 million. Depreciation and amortization rose 6.5% to $116.0 million. Net interest fell 17.8% to $22.1 million because rates on variable-rate debt were lower. The effective tax rate fell to 21.1% from 22.7%, mainly because of larger excess tax benefits on share-based awards.

**Store growth.** Store count rose to 2,959 from 2,944: 9 stores built, 12 acquired and 6 closed or divested. Cash paid for acquisitions was $43.9 million. The 10-Q does not name the sellers. EV charging grew to 294 chargers at 68 stores.

**Cash flow, balance sheet and capital returns:**

- Operating cash flow was $384.1 million, up from $372.4 million.
- Purchases of property and equipment were $194.4 million, up from $110.0 million.
- Casey's borrowed $42.6 million under its revolving credit facility during the quarter.
- It repurchased 54,647 shares for $45.6 million (average price $835.19) and paid $78.6 million in tax withholding on vested employee share awards.
- On June 4, 2026 the board expanded the original $400 million buyback authorization to a total of $1.0 billion with no expiration date. $972.6 million remained available at July 31, 2026.
- In June the quarterly dividend was raised 14% to $0.65 per share, the 27th consecutive annual increase.
- Total debt including finance leases was $2.43 billion. Available liquidity was about $1.4 billion: about $524 million of cash and about $857 million of undrawn credit lines.

**Other developments in the quarter:**

- Casey's early-adopted ASU 2026-02, the new accounting standard for environmental credits (RINs), retrospectively from May 1, 2026. The prior-period effect was not material.
- Courts approved the settlement of two lawsuits claiming store managers were misclassified as exempt from overtime under the Fair Labor Standards Act (*White (f/k/a McColley) v. Casey's General Stores, Inc.* and *Kessler v. Casey's Marketing Company*). The amount is not material, and the company admits no wrongdoing.
- At its June 24, 2026 Investor Day (accession 0001140361-26-026167), Casey's set out a new three-year plan for fiscal 2027–2029. It targets EBITDA growth of 8–10% a year and at least 400 new and acquired stores, built on the same goals as before: growing the store count, expanding prepared food and beverage, and improving operating efficiency.

**Fiscal 2027 outlook.** The September 8 release reaffirmed the guidance first issued on June 9, 2026:

- inside same-store sales growth of 2% to 5%, with an inside margin above 42%;
- same-store fuel gallons between −1% and +1%;
- total operating expenses up about 5% to 7%;
- EBITDA up 8% to 10%;
- at least 120 new stores, from both acquisitions and new construction;
- net interest expense of about $95 million;
- depreciation and amortization of about $490 million;
- purchases of property and equipment of about $800 million;
- a tax rate of about 24% to 26%.

## Subsequent events

*From the Form 10-Q for the quarter ended July 31, 2026 (accession 0000726958-26-000085) and the Form 8-K of September 8, 2026 with its Exhibit 99.1 (accession 0000726958-26-000084).*

The 10-Q for the quarter ended July 31, 2026 has no subsequent-events note. Neither the 10-Q nor the September 8, 2026 earnings release reports any acquisition, divestiture, borrowing or debt issuance after the quarter ended. The disclosed post-quarter events are:

- **Annual meeting.** Shareholders held the annual meeting on September 2, 2026 and elected an eleven-member board.
- **Dividend.** In September the board kept the quarterly dividend at $0.65 per share.
- **Shares outstanding.** There were 36,960,167 common shares outstanding at September 2, 2026, compared with 36,979,421 at July 31, 2026.