Story Stocks^®

Casey's General (CASY +14%) is making a huge move after the gas station/convenience store company closed out FY25 on a robust note. It reported its largest EPS upside in seven quarters with its Q4 (Apr) report last night. Revenue rose a healthy 10.9% yr/yr to $3.99 bln, a bit better than expected. CASY posted back-to-back double-digit revenue increases in Q3-Q4 for the first time in many quarters.

• CASY also raised its quarterly dividend by 14% to $0.57 per share and it provided healthy FY26 guidance, including a 10-12% increase in EBITDA and good comp guidance. Specifically, CASY expects FY26 inside same-store sales to increase +2-5% with inside margin of approximately 41%. CASY also expects same-store fuel gallons sold to be -1% to +1%. It also expects to open at least 80 stores in FY26, through a mix of M&A and new store construction.
• CASY describes its Q4 results as "outstanding" as total inside sales rose 12.4% yr/yr to over $1.4 bln, with an average margin of 41.2%. Inside same-store sales were up +1.7%. CASY said traffic in the quarter was a touch negative, but that's all because of weather in February, but then it got progressively better in both the March and April.
• A key metric is same store prepared food and dispensed beverage sales, they were up +1.5%. Hot sandwiches and bakery performed well in the quarter. Same store grocery and general merchandise sales were up +1.8%. Sales were particularly strong in non-alcoholic beverages, specifically energy drinks. Retail fuel sales benefitted from a 17.8% increase in the total gallons sold to $819 mln, which was partially offset by a 9% decline in average retail price to $2.98 per gallon this year.
• In terms of the macro, CASY says the consumer is really hanging in there and continues to visit its stores as frequently as they have historically. CASY is seeing good strength from higher income consumers. Even on the low end, CASY is seeing traffic hang in there but they are modifying some some purchasing behavior.

Investors are clearly impressed with how CASY closed out FY25 with the huge EPS beat and solid inside comps. What is interesting about CASY is that it makes most of its margin with inside sales. Gasoline drives traffic, but those are low margin sales. The key is to get customers who buy gas to come inside and spend. Casey's has done a good job with that. Its pizza is very popular with consumers, but it also offers a broad menu of hot and prepared foods. It also helps tht CASY has low exposure to tariffs with less than 5% of inside sales being imported.