Good morning, and thank you for joining us to discuss the results of our first quarter ended July 31st, 2026. My name is Sam James, Senior Vice President, Finance and Investor Relations.

With me today are Darren Rebelez, Chairman, President, and Chief Executive Officer, and Steve Bramlage, Chief Financial Officer. Before we begin, I will remind you that certain statements made by us during this investor call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include any statements relating to the potential impact of the Fikes transaction, expectations of future periods, possible or assumed future results of operations, financial conditions, liquidity, and related sources or needs, the company's supply chain, business and integration strategies, plans and synergies, growth opportunities, and performance at our stores. There are a number of known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any uncertainties or any future results expressed or implied by those forward-looking statements, including, but not limited to, the integration of the recent Fikes acquisition, our ability to execute our strategic plan or realize the synergies from the strategic plan, the impact and duration of conflicts in oil-producing regions and related governmental action, as well as other risks, uncertainties, and factors which are described on our most recent annual report on Form 10-K, our quarterly reports on Form 10-Q, as refiled with the SEC and available on our website.

Any forward-looking statements made during this call reflect our current views as of today with respect to future events, and Casey's disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. A reconciliation of non-GAAP to GAAP financial measures referenced in this call, as well as a detailed breakdown of our operating expense increase for the first quarter, can be found on our website at www.caseys.com under the Investor Relations link.

With that said, I'd like to turn the call over to Darren to discuss our first-quarter results. Darren?

Thanks, Sam, and good morning, everyone. Before we go into further detail on our outstanding first-quarter performance, I'd like to thank the entire Casey's team for their hard work during our 100 Days of Summer, and for the excellent job they did serving our guests.

I'm also proud of the positive impact we're making on the communities we serve. As students head back to school, our annual Cash for Classrooms giving campaign raised funds for grants that will support schools, students, and teachers.

This year, with the help of our guests, team members, and supplier partner Coca-Cola, we raised over $1.8 million. That sets a new record and reflects our shared commitment to invest in the future of the communities we call home.

We're through the first quarter of our fiscal 2027 to 2029 three-year strategic plan that we laid out in June, where we highlighted Casey's advantaged convenience QSR flywheel with our three lines of business under one operating cost structure. Our strong first-quarter result is yet another proof point that our advantage model is working as we continue to gain share both inside and outside the store.

Now let's discuss the results from the quarter. Diluted EPS finished at $7.37 per share, up 28% from the prior year.

Net income was $274 million, an increase of 27% from the prior year. The company generated $485 million in EBITDA, 17% higher than the prior year and up 40% on a two-year stacked basis.

Inside the store, prepared food and dispensed beverages remained strong. PF&DB transactions were up over 100 basis points, driving PF&DB units up nearly 4% versus the same period in the prior year as guests continue to gravitate toward our abundant offering, compelling value, and continued innovation, such as our Bacon Cheeseburger Pizza LTO.

Inside margin expansion was driven primarily by prepared food and dispensed beverage mix. In the forecourt, the capabilities we developed over the past couple of years helped us navigate a volatile environment.

Fuel margin was nearly 48 cents per gallon while same-store gallons were roughly flat. One note on the quarter: as part of our integration of the Fikes acquisition, approximately 1% of our total store base had a planned disruption associated with remodeling legacy CEFCO stores to Casey's.

As a result, same-store sales both inside and outside the store faced a slight headwind. Despite this, we still posted strong same-store results for the quarter and remained ahead of schedule on our integration efforts.

The stores that have been already remodeled to Casey's in prior periods have performed exceptionally well, and we expect to remodel CEFCO stores throughout the fiscal year. Now with that disclaimer out of the way, I'd like to now go over our results and share some of the details in each of the categories.

Inside same-store sales were up 3.2% for the quarter or 7.7% on a two-year stacked basis. Gross profit margin for the quarter was 42.2%, up 30 basis points from the prior year.

Prepared food and dispensed beverages led the way as same-store sales were up 4.8% or 10.7% on a two-year stacked basis with a gross profit margin of 59.3%. The majority of same-store sales growth was from traffic with minimal price.

This was highlighted by great performance in whole pies with units up nearly double digits in the quarter. Same-store grocery and general merchandise sales were up 2.7% or 6.5% on a two-year stacked basis with a gross profit margin of 35.6%.

Energy drinks and nicotine alternatives continue to outperform the category with double-digit growth. The alcohol category, specifically beer, was a headwind during the quarter.

On the fuel side, same-store gallons sold were down slightly at 0.3% but were positive 1.4% on a two-year stacked basis with a fuel margin of 47.8 cents per gallon. The Mid-Continent region saw an approximate 6% decline this quarter, according to OPIS fuel gallon sold data, indicating that our play is working and we continue to gain market share and drive guest traffic.

In the quarter, same-store operating expense, excluding credit card fees, increased 5%. Steve will provide some of the specific puts and takes related to operating expense changes, but I'm extremely proud of our operations team to be able to meet the increased food demand without meaningfully increasing store labor hours as same-store labor hours were roughly flat for the quarter.

I'd now like to turn the call over to Steve to discuss the financial results from the first quarter. Steve?

Thank you, Darren, and good morning. Before I begin, I also want to share my appreciation for our team members' hard work executing the plan during our busy summer months.

It takes the entire organization's buy-in to be able to generate such strong results, which are not easy to achieve. Our total revenue for the quarter was $5.68 billion.

That's an increase of $1.11 billion or 24.3% from the prior year, due primarily to higher inside sales and a higher retail price of fuel. Higher fuel gallons sold also contributed.

Results were favorably impacted by operating approximately 2% more stores on a year-over-year basis. Total inside sales for the quarter were $1.78 billion.

That's an increase of $94 million or 5.6% from the prior year. For the quarter, prepared food and dispensed beverage sales rose by $34 million to $493 million, an increase of 7.4%, and grocery and general merchandise sales increased by $60 million to $1.28 billion, an increase of 4.9%.

Inside same-store sales had an approximate 25-basis-point headwind from the Fikes construction. Retail fuel sales were up $991 million in the quarter as the average retail price of fuel rose 33% from $3 to $3.99 per gallon, and total gallons sold increased by 2.5%.

Same-store gallons had an approximate 50-basis-point headwind from the Fikes construction. We define gross profit as revenue less cost of goods sold, but excluding depreciation and amortization.

Casey's had total gross profit of $1.24 billion in the quarter, an increase of $127 million or 11.4% from the prior year, and up 29.7% on a two-year stacked basis. This was driven by both higher inside gross profit of $44.3 million or 6.3%, as well as higher fuel gross profit of $73.4 million or 19.6%.

Inside gross profit margin was 42.2%, and that's up 30 basis points from a year ago. The increase is primarily due to mix shift and solid cost of goods management.

Also, during the first quarter, we made a modest change in accounting for inside cost of goods sold related to internal distribution costs that had no net impact on inside margin in the aggregate, but it did create a slight tailwind to the PF&DB margin and a slight headwind to the grocery and GM margin. We believe this change better reflects the true cost of goods sold between the two categories.

Prepared food and dispensed beverage gross profit margin was 59.3%. That's up 130 basis points from prior year.

Cheese was $1.93 per pound for the quarter compared to $2.11 per pound last year. It's a decrease of 9% or an approximate 45-basis-point benefit to the margin.

Along with the aforementioned distribution cost reclass, these two items accounted for all of the margin change in the quarter. The grocery and general merchandise gross profit margin was 35.6%, a decrease of 30 basis points from the prior year, and that change is completely attributable to the distribution cost reclass.

Fuel margin for the quarter was 47.8 cents per gallon, up 6.8 cents per gallon from the prior year, and sequentially about 1 penny stronger than the fourth quarter of fiscal 2026, which reflected the beginning of the Middle East conflict and the related volatility in global petroleum markets. Total operating expenses were up 8% or $55.9 million in the quarter.

Approximately 2% of the total operating expense increase was due to unit growth as we operated 64 more stores than the prior year. Same-store credit card fees added approximately 1.5% to the increase, primarily due to the previously mentioned higher retail prices per gallon.

Same-store employee expenses accounted for approximately 1% of the increase, due primarily to increases in labor rates as same-store labor hours were roughly flat. Insurance, primarily same-store healthcare insurance, was responsible for approximately 1% of the increase.

In addition, same-store repairs and maintenance and same-store utilities collectively made up approximately 1% of the increase. Net interest expense was $22.1 million in the quarter.

That's down $4.8 million versus the prior year, which is primarily due to deleveraging associated with the Fikes transaction. Depreciation in the quarter was $116 million.

That's up $7 million versus the prior year, primarily due to operating more stores. The effective tax rate for the quarter was 21.1% compared to the prior year of 22.7%.

That decrease was driven by an increase in tax benefits that were recognized on share-based awards. Our financial flexibility remains excellent.

On July 31st, we had total available liquidity of $1.4 billion. Also, our credit facility debt-to-EBITDA ratio was 1.5 times.

For the quarter, net cash generated by operating activities of $384 million less purchases of property and equipment of $194 million resulted in the company generating $190 million in free cash flow, compared to generating $262 million in the prior year. The decrease in free cash flow is due, in large part, to the planned increase in capital expenditures from the CEFCO store remodels.

At the September meeting, the Board of Directors voted to maintain the quarterly dividend at 65 cents per share. During the first quarter, we repurchased approximately $46 million in shares.

While we're off to a great start to the year, consistent with our past practice, we plan to update annual guidance on our second-quarter earnings call when we are through the seasonally largest time of the year. Our results for August were as follows: same-store volumes, both inside and outside the store, were consistent with our first-quarter results and within our annual guidance ranges.

Fuel CPG is in the low-40 cents per gallon. Current cheese costs are slightly favorable versus the prior year.

We expect the second-quarter operating expense increase to be similar to the first quarter, and that's partially driven by the increase in retail fuel prices as compared to the second quarter of fiscal 2026. I will now turn the call back over to Darren.

Thanks, Steve. As we just wrapped up our first quarter into the new plan, I'm as excited as ever about our progress.

Our food team is doing a tremendous job. Whole pies have continued their strong momentum in the quarter.

Guests are flocking to the Casey's Rewards platform as we're now over 11 million members. We believe our abundant and value-oriented food offering is not only a differentiator driving inside traffic, but is also driving traffic to the pump.

This, coupled with our fuel team doing an excellent job balancing fuel margin and gallons during an uncertain environment, has yielded great results. This is our three-legged business model in action.

During fiscal year 2026, we remodeled approximately 50 CEFCO stores to Casey's. In the first quarter of fiscal year '27, we've remodeled 24 more stores.

We're extremely excited about the results we're seeing, as the average PF&DB lift at the stores that were remodeled to Casey's has been approximately 30% versus the results in the same period prior to remodel. While we're busy with CEFCO conversions, that has not stopped us from continuing to grow the store base as we are on track to meet our 120-store-unit goal for this fiscal year.

Operational efficiency is another key pillar of the strategic plan. As we discussed in Investor Day, we expanded our continuous improvement efforts to include both the store and the enterprise as a whole.

We're off to a great start as the team has completed a number of initiatives, with many more on track for completion during the fiscal year, both at the store and throughout the organization. Overall, I'm very proud of the team's execution of the plan.

We look forward to building on the momentum we have going throughout the fiscal year and beyond. We will now take your questions.

Yeah. Hi.

Good morning, everyone. I wanted to start, maybe on fuel margins.

Was hoping that we can maybe talk about the trend in fuel margin during Q1. I think you said you had a very strong start last quarter, which I think a lot of us kind of assumed that maybe that was in the 50s.

Just curious what the rest of the quarter looked like. Then the underlying dynamics that drove that really robust Q4 performance and strong start, just curious as to the sustainability of those dynamics through the quarter.

Then just lastly, related to all of this, as you think about your mid-40s sort of margin guide, is anything you're seeing out there currently that sort of raises question about that at all? Maybe talk about breakevens as part of that.

Thank you.

Hi. Good morning, Ed.

This is Steve. I'll address the first one on fuel margin during the course of the quarter.

We did enter the beginning of this fiscal year in a good position certainly, given the experience that we had in the fourth quarter. I would say, honestly, the quarter was volatile is the word I would describe with fuel margins.

There were days when it was in the 60s. There were days when it was in the 30s.

Most days, it was in the 40s. To some extent, depending on the headlines that you read about in the paper and social media, that there would be a corresponding move in fuel margin over the next day or two.

I don't think it's possible to really describe a solid trend during the course of the quarter. The floor, for sure, was higher, which is what we saw in the fourth quarter of last year because of the conflict.

That was unchanged, but it really moved around quite a bit based on headlines as we went through the quarter.

Hi. Thanks, guys.

I'd love to follow up on sort of the trends you saw through the quarter, particularly with how much of the comp decel in grocery and prepared food might have been people getting squeezed in terms of cash they had, filling up the gas tank at the same time, anything about that and the trends since the quarter as well. Thanks.

Greg, this is Darren. I'll go ahead and take that one.

I would say that the trends that we saw in first quarter were similar to what we've seen over the last several quarters. A couple of points.

One is that the lower-income consumers are being slightly more impacted than the other income cohorts. If you look at our business, all three income cohorts that we measure had positive growth on the quarter.

I'll caveat it with that. I would say that more of the impact we saw on the grocery and general merchandise side is really driven by category trends versus demographic trends.

What I mean by that is, if you look at the three areas where we had some softness is beer, snacks, and cigarettes. Those categories have all been challenged for different reasons.

That's an industry-wide phenomenon. We're not immune to that.

On the beer side, we were able to make up for a good part of that with our liquor business. Ready-to-drink cocktails, in particular, were up over 30% in the quarter.

We saw some good strength there, not enough to overcome the drag in beer. Snacks, I think we talked about this before.

We've seen a lot of price action taken from the national brands, which has put some pressure on there. Cigs has been a multi-decade trend.

On the other side, on grocery and general merchandise, real strength in nic alternatives, up 47% in the quarter. Energy continues to perform well at 12%, and non-alcoholic beverages overall were a strong contributor.

Overall, I'd say the trends are what they are. Then lastly, when I look at a two-year stacked basis, grocery and general merchandise up 6.5%.

In an environment like this, I think is pretty solid performance.

Good morning, and thanks for the question. I wanted to maybe just follow up on the CEFCO commentary in terms of the remodels.

You noted 25-basis-point inside same-store sales headwind and 50 on fuel gallons. How did this compare to kind of what you had seen on past remodels?

Then as we look out here over the next couple of quarters, should we be thinking about a similar kind of headwind? Or does the lift from the remodeled stores start to more than offset, let's say, any headwind from the disruption during the remodels?

This is Darren. On on the remodels, this is this is to be expected when we do heavy lifting.

Where why you didn't see this in the first quarter or fourth quarter of last year was there's a a cohort of stores that already had kitchens in them that we were able to convert in just a matter of days. There's really very minimal impact to to the performance of the business while those were being remodeled.

This this next tranche of stores that we we've started this quarter, this past quarter, are impacted anywhere from four to six weeks. That puts a a pretty significant drag.

They're not closed the entire time, but they're closed for a good part of it, and then partially under construction for part of it. There's a lot of disruption that puts a drag.

It is not anything different than what we would normally see in a remodel of other acquisitions. Probably the biggest difference is the CEFCO stores tend to be higher-volume stores versus others that we've acquired in the past, and so it has a more of a disproportionate impact, and and there's just more of them that we're remodeling.

That's all that said, we've been very happy with the results coming out of the remodels. At some point, to your point, Tom, this these numbers will inflect, but that's probably later in the fiscal year.

I wouldn't expect to see that in second quarter, probably not anything meaningfully in third quarter. Probably be more fourth quarter where you start to see that inflection point.

I would probably just add to that all of this was penciled into our annual guidance. We knew all this was going to happen, and so none of this is a surprise, and I think it's exactly kind of the impact and the timing that we would have expected.

All right. Thank you.

Good morning, everyone. I had a question on OpEx, which has remained elevated over the last several years.

Could you provide a little more color on the FQ1 drivers and how you expect the cadence for OpEx to trend from here? Then curious if you could touch on how much of the increase in the quarter was tied to the new stores or CEFCO, maybe labor, credit card fees, or other inflationary pressures, and really just trying to think about how we should think about normalized OpEx growth from here over the long term.

Thank you.

All right. Bonnie, hey, good morning.

This is Steve. In terms of the waterfall that I think will end up on the web page as we've done in the past, but to get to the total OpEx change of the 8% in the quarter, about a 0.5% of that was same-store employee expense.

Think of kind of 3% wage rate offset by flat hours gets you kind of 0.5%. About 2% would have been what we would kind of broadly bucket as same-store operations.

That would be repairs and maintenance, utilities, insurance. We're self-insured for healthcare.

That would go into that 2% bucket. New units, to your point, is about 2% all by itself, just the wrap of new units.

Credit card fees, same-store credit card fees, would be another 1.5%, almost 2 points, and then you get kind of everything else in the 1% bucket, which would be technology and supplies and some miscellaneous things. We continue to believe the best way to think about OpEx in a long-term basis is consistent with the algorithm, right?

We firmly believe we can grow operating expense at a slower rate than we're going to grow EBITDA over the medium and long term. I think that's eminently achievable for us.

For this year, we obviously haven't updated the guide for the year, but the squeeze math for the rest of the year, if you go back to what we experienced in the fourth quarter of last year, you'll get less OpEx growth on a year-over-year basis this year to land the plane within that range. Especially if you take the fact second quarter is going to look similar to first because of the credit card fee dynamic, you should be able to land second half of the year pretty close.

Hi. This is Matthew Rothway on for Mark.

Thank you for taking our question. Was wondering if you could touch on the competitive landscape and promotional landscape a little bit.

Are you seeing any impact from price investments from some of the mass merchants on your inside sales or grocery and gen merch, and any shift from kind of your convenience store peers in competition and pricing?

Hey, Matthew, this is Darren. Really we haven't seen any unusual or different activity from the c-store competitors, and I think that's a reflection of the more challenged environment that they find themselves in relative to us with a big prepared foods business.

We really haven't seen much of that there. On the pizza side of the business, it's been a mixed bag.

I think there's been some more promotional activity, but again, I'd remind you of how we approach the business. We have our own degree of promotional activity, but our starting point is far lower in price versus the national brands.

We're close to on average, about $3 for a single-topping pizza below what a national brand would be priced at, just line pricing. Then, also as a reminder, about half of our stores don't even have a national-brand pizza competitor.

We're really in a very good competitive spot. What we did see over the quarter was that, similar to the dynamic that we described in Investor Day, where we've taken minimal price while the pizza QSR set has taken more price.

We saw that dynamic in first quarter continue, and that gap that we had from our pricing in prepared foods to theirs actually widened even further. We think we saw that in the numbers with the unit growth and the dollar growth as well in PF&DB.

Good morning, everyone. Great quarter.

I'd like to return to the nicotine category. It's shrinking on the cigarette side.

Could you talk a little bit about the artificial cigarettes, and then what it means for the inside merchandising as you change space allocation or need to use other products to get that traffic back?

Chuck, this is Darren. They're called nicotine alternatives.

What we've seen over the course of the last couple of years is as that secular decline in combustible cigarettes continues, nicotine alternatives is starting to replace that lost volume. Now it's not a one-for-one yet.

It hasn't quite grown that fast. If you think about how the categories are trending, with cigarettes down a percent or two on sales basis and down, call it 5% or 6% on unit basis, and nicotine alternatives up 47% in the quarter, you can see where that change is going to come here soon.

From a space allocation standpoint, I think that's where our merchandising team has done a really good job is getting ahead of this. We talked about this on previous calls.

We reset those nicotine back bars to reduce the combustible cigarette space to make more room for nicotine alternatives. That move a couple of years ago was I think we were one of the first in the industry to do that, and it's really accrued to our benefit.

I think that's one of the reasons that you see the strength in that category today in our stores. We just did another adjustment this past fiscal year to give even more space to nicotine alternatives.

The category overall is definitely shifting in favor of those alternatives, and we expect to be a leader in that space.

Good morning, and thanks for the questions here. Just a quick one from me.

I think you mentioned your cheese cost at about $1.93 per pound. Was just wondering if you could give us how much you're covered, as you're looking out here, how much you're covered and how many quarters you are covered out.

Pooran, hey, good morning. This is Steve.

I'll address that. We are about 80%, 8-0% covered through really into the first quarter of next fiscal year.

Generally, certainly for the remainder of this fiscal year, the three out-quarters, we would be covered in a modest tailwind to margin each of those three quarters.

Great. Thanks, and good morning.

Hey,

good morning.

Thanks. I had a two-parter.

The first, I would love an update on chicken wings. Then second is on M&A.

I think you've placed recently a little bit more emphasis on Texas. Could you maybe talk a little bit about the strategy within that market, please?

Thank you very much.

Hey, Corey, this is Darren. With respect to wings, wings are performing well.

We've been really happy with the results so far. We're still in 850 stores, and we'll start rolling out the next tranche of stores here later this month.

We didn't do any rollouts over the 100 Days of Summer just to give our stores a chance during their biggest, peak period to execute at a high level. We'll start those now and we'll start getting those open probably in early third quarter.

Wings, like I said, have performed well. One of the encouraging things is about 38% of guests that have purchased wings have had a wings-only order.

If you recall, when we talked about this strategically, we were looking to achieve another night of the week or another occasion in addition to pizza. Those wing-only orders really represent that incremental occasion.

The folks that have had a wing-only order have increased their frequency of prepared food purchases overall by about 30%. It's a really good fact pattern for us.

We're still early stages and still growing. As an example, in the Des Moines DMA, which we've had the wings in the longest, we were up 46% in the quarter over prior year.

There's still a long runway for growth there, and very bullish on that category.

Hi. Good morning.

Thanks for taking our question. Steve and Darren, wanted to just go back to the beer, snacks, and cigarette commentary and the impact on the grocery comps.

Just curious a little bit more color there, when that kind of weaker trend started, and are you seeing just more of a unit slowdown or is there a trade-down to lower price points or smaller pack sizes? Do you or some of the vendors have some plans to promote these categories through the rest of the year?

Kelly, I'll go ahead and take that. You've got something different going on in each of those.

I'd say I'll just start with cigarettes because that's easy. If that's been for 30, 40 years, that trend.

Nothing new to report in cigarettes, other than it's just continuing to be under pressure. Like I said, I feel better about that category, the total nicotine category, now than I have in a long time because of nic alternatives and the growth rate we're seeing there and the margin profile.

As a reminder, the margin in nic alternatives is double what it is in combustible cigarettes. That math ends up working out pretty favorably on a gross profit dollar standpoint over the long term.

Snacks is something that we've probably experienced for the last couple of years, where the national brand manufacturers have just taken a lot of price, primarily in chips. You see a lot of pressure in that category.

While there's been some price action that they're taking on take-home packages, they're not taking that on immediate-consumption packages, which is the bulk of what we sell. They've just priced themselves out of the market, frankly.

Now what we're doing about that is we've leaned heavier into our private label offering. We're seeing really good growth in those same categories in our private label products.

We think we're not losing traffic necessarily, but the retails are lower and so doesn't have quite the impact on the sales line as it might otherwise have. Beer has been a category that's really struggled for the last couple of years.

I think it started off with Budweiser and their social media snafu and then it's just kind of hung in there like that. The one bright spot is super-premium beer with Michelob Ultra, but outside of that, it's been soft.

What we've really done is we have made sure that we're priced appropriately. We are looking at space allocation in the category to make sure we're appropriately spaced, and then leaning a little bit heavier on the liquor category.

Like I've mentioned earlier on the call, ready-to-drink cocktails up 30-plus percent, so that's been a good offset and that's a little bit more on-trend with where the consumers are going.

Good morning. Thanks for taking the question.

I wanted to ask about the same-store gallons. I know it's tracking within your annual guidance.

This was the first quarter of being negative after about six quarters of being positive. Just curious what you were seeing in the quarter, how much is the decline is the being a tougher comparison that you're up against, and then to what extent is fewer gas sales trickling through to the inside comp?

Not sure if you've been able to look at that yet. Thanks.

Brad, I'll go ahead and take that. Just on the same-store gallons, on the trend, a few things I'd point out.

One is down 30 basis points, our annual guide was down a percent to plus a percent, we're talking about pretty nuanced numbers there, point number one. Point number two, as Steve described with the CEFCO remodels, that's about a 50-basis-point drag on overall gallons.

If you net that out, you're probably up 20 basis points, so that again, nuanced, but probably right in the middle of the annual guide range. On the two-year stacked basis, we were cycling a 1.7% same-store gallon number.

To put that in perspective, we're on a two-year stack, we're up 1.4%. The OPIS Mid-Continent region, which is where we operate primarily, over that same two-year period is down 10%.

We've taken significant share in fuel, and 20 basis points here, 30 basis points there doesn't concern me when the overall trend is where it is. I would just add with a consumer behavior standpoint on fuel with the higher fuel prices, we're seeing exactly the type of behavior that we would expect to see: fewer gallons per trip, but more trips made, which ultimately accrues to our benefit if we have more people coming to the store.

People are trading out of premium and mid-grade and opting for regular or higher ethanol blends of fuel. The higher ethanol blends of fuel carry a higher margin for us than clear gasoline.

While these trends kind of ebb and flow, it's very consistent with prior periods of higher gas prices and ultimately works out to our benefit.

Hi. Good morning, and thanks for taking the question.

I had a follow-up to grocery. Darren, you've highlighted strong growth in energy, non-alcoholic beverages, and nicotine alternatives, but obviously snacks remain challenged.

Do you think the weakness in snacks is entirely a function of pricing and value perception, and are you starting to see evidence maybe of a more durable shift in consumer behavior? Obviously there's a shift towards healthier consumption patterns or also any GLP-1 usage that you might be seeing, and if that is warranting any kind of a revision of how you're thinking about maybe what the inside of the box needs to look like maybe two to three years from now?

Thank you.

Thanks, Krisztina, and certainly we keep an eye on that. When I look at what's happening in the category, and as I mentioned before on snacks in particular, national brand chips down around 8%, Casey's chips up 16% in units.

If it was a GLP-1 impact, I don't think we'd see the strength in our own private brand. We'd see overall negative trend in the category.

I can't put my finger on the idea that it's a GLP-1-type issue. That being said, there is certainly a trend of people leaning more towards protein-heavy snacks and foods in general, and we are seeing that.

Our merchandising team's done a nice job of bringing in more protein-dense snacks and other foods to satisfy that need, and we are seeing good growth in those. They're just smaller categories, they really don't move the needle as much on the overall G&GM category, but they are growing well, and we are staying attuned to that trend.

I just don't see enough of it yet to make any more dramatic shifts at this point.

Hey, guys. Good morning.

Thanks for taking the question. Darren, I wanted to touch on just the Texas opportunity further.

I think you called out on the remodeled stores for Fikes, they're performing well. Can you dive into a little bit more about what those stores are kind of showing versus maybe corporate average once they get your Casey's pizza in there?

I think Fikes were higher-performing stores, is that translating into just a larger pizza business and is that indicative of what maybe the opportunity could be as you open up new-to-industry or you do tuck-ins? You guys completed a small tuck-in in Texas after the quarter end.

Bobby. Like we said, the performance of the CEFCO stores has been fantastic so far coming out of the remodels.

What I'd say is most encouraging is that these stores were high volume. They were generally higher volume than our average.

Now not in prepared foods, but their prepared foods business was probably the best that we've ever acquired. I don't think there's been anything that's even close to how CEFCO is performing in prepared foods prior to acquisition.

When we can come in and take a store already doing well in prepared foods and layer our program on top of it, and see the types of lifts that we're seeing, 30-plus percent year-over-year, it's really encouraging. Even in the proof-of-concept stores that have had the full Casey's assortment for over a year, they're still comping positively.

We feel really good about what we see. We've also had some new-to-industry stores that we built down in Texas over the last year since we've been down there, and those are performing very well.

We really like Texas overall. As this has been a goal of ours to get into that state for a while now.

The two acquisitions we've done and now a third coming have been very good to us, and the new industries are doing well also. As I have looked at Texas, outside of the big four cities of Dallas, Austin, San Antonio, and Houston, the rest of that's entire state is Casey's country.

From our perspective, it's got a long, long runway for growth.

Hi, everyone. Thank you for taking my question.

Kind of a follow-up on kind of state strength. You all have stores in 19 different states.

If you think about customers at the state level, are there certain states or areas of the country where you're seeing a stronger consumer or weaker ones?

Daniel, I'd probably have to look a little closer to try to answer that question. Nothing jumps out at me.

Probably one example that we have seen is between Illinois and Indiana, on the border, where Indiana has suspended gas tax in that state, and Illinois hasn't done anything similar. We're seeing a little bit of weakness along the border in Illinois from a fuel perspective, but we're also seeing a corresponding strength on the other side of the border in our Indiana store.

I'd say it's kind of a wash, just guests kind of playing an arbitrage game. Outside of that, I couldn't specifically point to any one state doing better or worse than the others.

They always perform a little bit differently, but nothing that really jumps out and concerns me.

I think it's worth reinforcing that if you just think about part of the strategic moat that Casey's has and that we tried to highlight at the Investor Day, right, the geographic footprint we have remains in some of the lowest cost of living parts of the country. Broadly speaking, the money that our consumers earn goes further than it would certainly for consumers who are similarly situated on the coasts.

We feel like that accrues to our benefit, for sure. I think that is a very fair statement for the vast majority of the communities that we serve and continue to serve.

Good morning. Thanks so much for taking our question.

This is Sam Barnard on for Jacob. I was just wondering if we could zoom out a little and touch on M&A as a whole.

Have you seen the industry change at all in the last several quarters? Then also, just wondering if you could remind us on philosophically just how you see M&A contributing to your 120 new-unit growth target by the end of the fiscal year.

Thank you.

Sam, I'd say the M&A environment is still really good, and that's a reflection of the challenging environment that the industry finds itself in, particularly the small operators. I wouldn't say it's changed.

I'd say it's still consistent, maybe even gotten a little better from a buyer's perspective. Multiples have stayed relatively flat, but the EBITDA that's multiplied by has not.

The EBITDA, even with higher fuel margins, tends to go backwards for these smaller operators. We find ourselves paying a lower absolute price for some of these assets, even though the multiples are about the same.

Consistent with our guidance, every year we go into that, giving a number of stores we'll add in the fiscal year. This year, it's 120.

We go into that assuming half of that will come from new-to-industry builds, half of that will come from the small-deal M&A. That's exactly how we see it playing out this year, give or take a couple.

All right. Thank you for taking time today to join us on the call.

Before we go, I want to thank our team members once again for all their hard work this quarter. Have a great day.

Thank you.