FIRST TAKE: Strong Beat Reinforces Food-Driven Model

Research evidence excerpt

FIRST TAKE: Strong Beat Reinforces Food-Driven Model

side strong comps

suggests this is not purely promotional or traffic-driven, but rather reflects improved product mix,

execution, and operating discipline in our view. This is critical, as we think this points to a more

durable earnings algo driven by food attach and frequency rather than traditional c-store volatility.

Grocery also saw solid comp acceleration, though margins moderated modestly sequentially.

Fuel Remains a Meaningful Earnings Tailwind with Stronger Margins. Same-store fuel gallons

increased +1.5% with margin at 46.9c/gal (vs ~37.6c LY), driving fuel gross profit +29.1%. Notably,

upside was driven by both margin and volume, alongside $15M in RINs contribution, underscoring

favorable fuel dynamics in the quarter. What stands out here to us is the company’s ability to

balance price and volume to protect margins, reinforcing mgmt’s commentary around disciplined

execution in fuel pricing and market share gains. In a period today where fuel can be highly

unpredictable, Casey’s results demonstrated that its model, particularly in smaller, less competitive

markets, can sustain elevated profitability while still driving traffic, we think.

Margin Expansion Offsets Elevated Opex Growth. Total operating expenses increased +10.1% vs

cons: $697M, reflecting store growth (~2 pts of growth), higher labor rates, and elevated incentive

compensation tied to strong performance. Despite this, gross profit growth drove EBITDA margin Corey Tarlowe * | Equity Analyst

expansion to ~7.7% (+70bps vs cons). (212) 323-7541 | ctarlowe@jefferies.com

Growth Algorithm Remains Intact with Continued Store Expansion. CASY ended the year with Randal J. Konik * | Equity Analyst

(212) 708-2719 | rkonik@jefferies.com