Casey's General Store

Last night we got the latest set of now, I have been a big, unmitigated fan of Casey's for a couple of years now because they found this great niche. There's a reason this stocks up almost 2400% over the past 20 years. These guys intentionally target smaller markets where their gas stations and convenience stores with fresh hot food can become a big draw. And that's what's turned Casey's into a spectacular regional to national growth story. It's also, by the way, why the stock always seems to fly under the radar on Wall Street. Most people in the financial industry have never seen a Casey's with its stores mostly in the Midwest and Southeast, and they certainly haven'tried its absolutely fantastic, but breakfast pizza. They basically take this bacon, egg and cheese sandwich into a pizza and, well, I tried it for the first time over the s It is legitimately great. And I'm from Jersey, where I'm like, Now the stock's now up 94% since I started pushing this thing two years ago. Trouncing the SB500, which is why I keep going back to the well with this one. However, after the stock soared response to earnings in early June, Casey spent most of the s As we waited the company's earnings last night, it was off about 10 points from July highs, even though it was still up 30% for the year. That's one reason why Casey's initially got very little love after reported last night. The actual quarterly results, they were excellent. Excellent. We're talking a healthy top and bottom line beat with 11. 5% revenue growth as every individual business line came in stronger than expected. Casey's inside same store sales were up 4. 3%. Wall Street was only looking for 3. 6%. With prepared food coming in much better than expected. For the fuel business, same store gallons sold were up, interesting metric, were up 1. 7%. The Annalsroyer looking for 0. 3% growth will take vol Casey saw some nice margin expansion too, which is how the company could deliver a clean 75 cent earnings beat of a $5. 02 basis. That's huge. It's nearly 20% earnings growth led by the strength of their inside the store business, meaning the convenience store, not the gas station, meaning those breakfast pizzas. Safe for sales and prepared food were up nearly 6%. Wow. I mean, that's incredible, but that isn't just breakfast pizza. They also have sandwiches wraps, wings, salads, fresh cookies. Cookies are very good. But CEO Darren Rebellis also called out, quote, positive traffic growth due to our s And quote, On top of that, he said that the company's fuel team, quote, did a tremendous job achieving same store gallon growth while maintaining a healthy fuel margin. End quote. I know fuel team. Hey, listen, they got the best fuel team. What can I say? And that thanks to the company'steady delivery expansion plans, Casey's also benefiting from operating over 200 more stores than it did a year ago. Put it all together and I think you've got some excellent n Okay. All right. But there was one minor issue with the quarter, which is that management merely maintained their full year forecast rather than raising it. I've said that's often a problem, but let's unpack this. For many on Wall Street, it's a de facto guide down because they just reported better than expected quarter and they didn't raise their guidance to just. Specifically, Casey continues to expect inside same store sales to increase 2% to 5% this year with the quote inside margin of roughly 41%. Same store fuel gallons sold are still expected to be negative 1% to positive 1%. Total operating expenses are still expected to be increased by 8% to 10%. And Casey's plans to open at least 80 stores in fiscal 2026 for a combination of M&And new construction. This outlook was not necessarily disappointing on its own. It was totally in line with what the analysts were looking for going into the quarter. But given the case, you just put a big top and bottom line beat for the quarter. It was a b And that's why the stock got dinged a little bit at the opening today. Let's go through this. I wasn't deterred at all viewing this negative response to Casey's overwhelmingly positive response to the quarter as a potential buying opportunity for you. As I said on Squaggle the Street this morning, let's go down. Why? First, let's tackle that unchanged guidance issue head on. While I obviously would have loved to see Casey's raise its four-year forecast, the company's only one quarter into its 2026 fiscal year. For most publicly traded companies, it'standard operating procedure to not raise their four-year forecast after just one quarter unless the n On this morning's conference call, KCCFO Steve Bramlage laid it all out. Quote, consistent with our past practice, we plan to update annual guidance on our second earnings quarter. A call when we're through the seasonally largest time of the year. End quote. There he just said it, OK? A couple of others tried to specifically suss out whether the lack of guidance increase indicated any extra cost from Casey's management. The answer was basically no, not really. Management simply reiterated that they'll provide an update on their outlook after the second quarter, which is the way they do it when there's, quote, more visibility into the balance of your end quote. Hey, that's fine with me, especially given the company's great tracker. It should be fine with you. It's the chance to buy it without the what I think is going to be a guide up next quarter. Now there was plenty of other positive commentary, too, because behind its folks even near this company is a very sophisticated operator. For example, the s End quote. And a rebel has mentioned that their data and insights, which are gathered from their nearly 10 million Casey's rewards members, help inform merchandising efforts, along with the company's pricing strategy and even decisions And I got to tell you is management also said it's taking market share and fuel and it's doing so without sacrificing Martin's. I told you they had a good fuel team. It's all very impressive. And after this quarter, I remain very much in the bull camp on Casey's. And it seems The final two hours of trading to close the day up almost 20 bucks or nearly 4%. That's why that morning call was so important. Okay. So here's the bottom line. Last night we got another terrific quarter from Casey's general, one of my absolute favorite under the radar growth stocks. You could buy this one and put it away while the stock initially did react because management left their full year forecast unchanged. I think they only did that because they feel it irresponsible to raise their guidance after just one quarter as many companies do. They don't want to get ahead of themselves, but everything's going great in Casey's and the market eventually got this one right. Still, after today's gains, I think there's much more upside to come.