8-K: Casey's General Stores Reports Flat EPS but Strong EBITDA Growth in Q3 2025

Casey's General Stores announces flat diluted EPS of $2.33 but an 11.4% increase in EBITDA to $242.4 million for the third quarter ended January 31, 2025, driven by strong inside and fuel sales.

Summary

• Casey's General Stores reported its financial results for the third quarter ended January 31, 2025.
• Diluted EPS was $2.33, flat compared to the same period last year.
• Net income remained flat at $87.1 million.
• EBITDA increased by 11.4% to $242.4 million.
• Inside same-store sales increased by 3.7%, with an inside margin of 40.9%.
• Total inside gross profit increased by 14.3% to $573.1 million.
• Same-store fuel gallons increased by 1.8%, with a fuel margin of 36.4 cents per gallon.
• Total fuel gross profit increased by 17.4% to $302.1 million.
• Same-store operating expenses, excluding credit card fees, increased by 3.2%.
• The company reduced same-store labor hours for the eleventh consecutive quarter by 2%.
• Total fuel gallons sold were up 20.4%, and total inside sales rose 15.3%, primarily due to unit growth, including the Fikes acquisition.
• The company had approximately $1.3 billion in available liquidity, including $395 million in cash and cash equivalents.
• The Board of Directors approved a quarterly dividend of $0.50 per share, payable on May 15, 2025.
• Casey's is updating its 2025 outlook and now expects EBITDA to increase approximately 11%.

Sentiment

Score: 7

Explanation: The sentiment is positive due to strong EBITDA growth, increased sales, and operational efficiencies. However, flat EPS and increased operating expenses temper the overall outlook.

Positives

• EBITDA increased by 11.4% to $242.4 million, driven by higher inside and fuel gross profit.
• Inside same-store sales increased by 3.7%, driven by prepared food and dispensed beverage category.
• Same-store fuel gallons increased by 1.8%.
• Total fuel gallons sold increased by 20.4% due to store count increase and same-store growth.
• Same-store labor hours were reduced for the eleventh consecutive quarter by 2%.
• The company has approximately $1.3 billion in available liquidity.
• The Board of Directors approved a quarterly dividend of $0.50 per share.

Negatives

• Diluted EPS was flat at $2.33 compared to the same period last year.
• Inside margin was down 40 basis points compared to the same quarter a year ago, driven primarily by the impact of the stores from the Fikes acquisition as well as a coffee promotion to feature new flavor profiles.
• Fuel margin decreased due to the impact of the stores from the Fikes acquisition.
• Operating expenses increased approximately 18% during the third quarter.
• Net income and diluted EPS were flat due to higher interest expense related to debt taken on from the Fikes transaction as well as higher depreciation from operating more stores.

Risks

• The integration and financial performance of acquired stores could impact results.
• Fluctuations in wholesale fuel, inventory, and ingredient costs could affect profitability.
• Distribution challenges and disruptions could impact supply chain.
• Geopolitical disruptions, such as the conflict in Ukraine, could impact operations.
• The company's performance is subject to risks described in its annual and quarterly reports filed with the SEC.

Future Outlook

Casey's is updating its 2025 outlook and now expects EBITDA to increase approximately 11%. The company expects same-store inside sales to increase approximately 3% to 5% with inside margin to be comparable to the prior year. The company expects same-store fuel gallons sold to be negative 1% to positive 1%. The company expects to add approximately 270 stores for the fiscal year.

Management Comments

• Casey's delivered an excellent third quarter highlighted by strong sales growth both inside and outside the store, said Darren Rebelez, Chairman, President and CEO.
• Inside same-store sales were driven by the prepared food and dispensed beverage category, with hot sandwiches and bakery performing quite well.
• Our fuel team did a tremendous job achieving same-store gallon growth of 1.8% while maintaining a solid fuel margin.
• The operations team's focus on serving our guests efficiently is paying off, as we reduced same-store labor hours for the eleventh consecutive quarter.

Industry Context

Casey's performance reflects the ongoing trends in the convenience store industry, with a focus on prepared foods and fuel sales. The Fikes acquisition is a strategic move to expand the company's footprint and increase market share. The company's focus on operational efficiency, as evidenced by the reduction in labor hours, is a key factor in maintaining profitability.

Comparison to Industry Standards

• Casey's inside margin of 40.9% is comparable to industry leaders like Alimentation Couche-Tard (parent of Circle K) which often reports inside margins in the low 40s.
• The 1.8% increase in same-store fuel gallons is a solid performance, especially when compared to companies like Murphy USA, which also focuses heavily on fuel sales.
• The company's EBITDA growth of 11.4% is a strong indicator of financial health and operational efficiency, placing it favorably against competitors such as EG Group, which has faced challenges in managing debt and integrating acquisitions.

Stakeholder Impact

• Shareholders will benefit from the quarterly dividend and potential for future growth.
• Employees may benefit from the company's focus on operational efficiency and growth opportunities.
• Customers will benefit from the company's focus on serving guests efficiently.
• Suppliers will benefit from the company's increased sales and expansion.

Next Steps

• The company will report earnings during a conference call on March 12, 2025.
• Investors can access the call via webcast on the company's website.
• The company will pay a quarterly dividend of $0.50 per share on May 15, 2025, to shareholders of record on May 1, 2025.

Key Dates