Casey's General Stores, Inc. (CASY) Earnings

Management highlights

- **Community Impact & ESG** * Contributed over $8 million in total giving this fiscal year to strategic priorities: education, hunger relief, and support for first responders, military veterans and their families * Distributed $1.3 million in 100 grants through the Task for Classrooms program, provided over 10 million meals to local food banks via Feeding America, and supported more than 2,000 veterans and their families - **Completed 2023-2026 Three-Year Strategic Plan** * Exceeded all key goals: added over 500 new net units across the three-year period, beating the original 350-unit target * Accelerated food business growth: launched thin crust pizza, multiple regional and limited-time pizza offerings, expanded specialty pizza menus, revamped hot sandwich lines, rolled out a new fryer platform for wings and fries, and launched two new beverage platforms (darn good coffee and frozen carbonated beverage Frostbite) * Achieved meaningful operational efficiency gains: reduced same-store labor hours by 5% over three years while improving turnover by more than 70 percentage points, and maintained near all-time highs for guest satisfaction and team member engagement * In fiscal 2026, opened 80 net new stores (40 acquisitions, 40 new builds) and converted 50 SEFCO stores to the Casey's brand after acquiring the chain - **Key Product Innovation Updates** * Completed wing testing and began national scaling; nearly 850 stores offered sauced wings by the end of Q4 2026 * Launched an exclusive Monster RAS red, white, and blue flavor for the U.S. 250th anniversary, which was a top energy category seller and raised hundreds of thousands of dollars for military veteran charities - **Capital Return Strategy** * Increased quarterly dividend by 14% to 65 cents per share, marking the 27th consecutive year of dividend increases * Repurchased ~$63 million of shares in Q4, expanded the existing share repurchase program to a total of $1 billion, and expects ~$200 million in share repurchases in fiscal 2027 - **Balance Sheet & Financial Health** * Maintained a strong balance sheet with $1.4 billion in total available liquidity as of April 30, 2026, and a debt-to-EBITDA ratio of 1.5x * Generated full fiscal 2026 free cash flow of $722 million, and return on invested capital reached 12.7% (+120 bps YoY), the highest level since 2018

Guidance

- Inside same-store sales are expected to increase 2% to 5% in fiscal 2027, with inside margin maintained above 42% - Same-store fuel gallons sold are projected to range between -1% to +1% in fiscal 2027; the FY27 EBITDA guidance assumes a mid-40s cents per gallon fuel margin for modeling purposes - Total operating expenses are expected to increase 5% to 7% for full fiscal 2027; Q1 2027 operating expense is projected to increase in the high single digits, driven partially by higher credit card fees from elevated retail fuel prices, with growth expected to taper later in the year as non-recurring items from fiscal 2026 lapped - EBITDA is expected to increase 8% to 10% year-over-year, representing a 35% two-year stacked increase at the midpoint of the range - At least 120 new stores are planned to open in fiscal 2027, split evenly between new construction and M&A, consistent with the company's long-term 4% annual unit growth algorithm after pulling back growth in fiscal 2026 to integrate the SEFCO acquisition - Key expense guidance: net interest expense is expected to be ~$95 million, depreciation is expected to be ~$490 million, capital expenditures are projected to be ~$800 million (inclusive of majority SEFCO store conversion costs), and the effective tax rate is expected to be 24% to 26% - Early May 2027 results for inside same-store sales, same-store fuel gallons, and fuel margin are all consistent with achieving full-year fiscal 2027 guidance, and current cheese costs are modestly favorable versus prior year

Segment performance

### Full Fiscal 2026 1. Inside store sales: Total grew 10.2% year-over-year, with same-store sales up 4.2% (7% on a two-year stack). Total inside gross margin expanded 70 basis points to 42.2%. - Prepared Food & Dispensed Beverage: Total sales grew 10.2%, same-store sales up 5.2% (8.8% two-year stack). Revenue contribution for full year: ~30% of total inside sales. - Grocery & General Merchandise: Total sales grew 10.1%, same-store sales up 3.9% (6.2% two-year stack). Revenue contribution for full year: ~70% of total inside sales. 2. Fuel: Gross profit up 21% year-over-year, total gallons sold up 10%, average annual margin of 42.6 cents per gallon. ### Fourth Quarter Fiscal 2026 1. Inside store sales: Total reached $1.5 billion (+7.4% YoY), average margin 42.4%, total inside gross profit up $61 million (+10.5% YoY). - Prepared Food & Dispensed Beverage: Total sales $428 million (+9.2% YoY), same-store sales up 6.6% YoY, average margin 59.5% (+170 bps YoY). Revenue contribution: ~28.5% of Q4 total inside sales. - Grocery & General Merchandise: Total sales $1.09 billion (+6.7% YoY), same-store sales up 5.1% YoY, average margin 35.7% (+90 bps YoY). Revenue contribution: ~71.5% of Q4 total inside sales. 2. Fuel: Same-store gallons sold up 1.5% YoY, total gallons sold increased 3.6% to 848 million gallons, average margin 46.9 cents per gallon (+9.3 cents per gallon YoY). Total retail fuel sales up $446 million YoY, driven by a 14.1% increase in average retail price.

Risks & headwinds

- Volatility in global oil prices and geopolitical conflicts in oil-producing regions can create unexpected fuel margin compression and fuel demand destruction, particularly if retail fuel prices approach $5 per gallon - Integration of recent acquisitions (including SEFCO) may take longer or yield lower synergies than expected, especially for stores requiring full kitchen remodels to convert to the Casey's brand - Prepared food margins remain exposed to commodity price volatility, most notably for cheese, which can offset self-help waste reduction gains - Smaller independent competitors may face ongoing operational and margin pressure, but there is uncertainty around how industry margin dynamics will evolve long-term - Execution risk for the new three-year strategic plan, including full national scaling of the wing platform and continued expansion into new geographies like Texas and Florida - Actual results may differ materially from forward-looking statements due to unforeseen changes in consumer behavior, competitive activity, or macroeconomic conditions

Analyst Q&A

• Q: Has the historical relationship between rising crude oil prices and fuel margin compression fundamentally changed for the industry, given Casey's record fuel margin in a quarter of sharp crude increases?

  A: The relationship has not fundamentally changed for the broader industry. This quarter's higher margin resulted from unusual volatility: crude prices rose unevenly with significant choppiness rather than a smooth steady increase. Because Casey's avoids frequent retail price changes, this choppy path created temporary margin expansion that would not be expected in a typical rising price environment.

• Q: What is driving recent inside margin expansion, how durable is this strength, and how much opportunity remains for further improvement?

  A: Structural mix shifts are creating durable margin tailwinds for grocery/general merchandise: growth in higher-margin nicotine alternatives (replacing lower-margin combustible cigarettes), higher-margin energy drinks within non-alcoholic beverages, and expanded liquor assortments across the over 1,500 stores with liquor licenses all drive ongoing accretion. For prepared food, waste reduction is self-help that has further room to run, but margins will remain sensitive to commodity cycles, like changes in cheese prices.

• Q: How much long-term upsides does the wing platform have, and what incremental demand have you seen so far?

  A: Early results are very strong: at nearly 850 rolled out stores, wings are driving incrementality rather than cannibalizing pizza sales — whole pizza volume is still up high single digits in wing markets, and guests ordering wings alone increase their prepared food purchase frequency by 30%. Management believes wings could eventually reach the size of Casey's current pizza business long-term, though it will take multiple years of scaling to reach this potential.

• Q: What gives Casey's confidence to guide 8-10% EBITDA growth against tough year-over-year comps, and what are the key drivers of this growth?

  A: Roughly half of the projected EBITDA growth will come from new unit expansion, and management is highly confident in the acquisition pipeline: the industry has a long tail of small independent operators facing significant operational and generational pressure, with more outreach and receptivity to deals than ever before. The other half will come from same-store (mothership) growth, driven by ongoing inside margin accretion from mix shifts and continued velocity gains from new prepared food offerings like wings, leaving the growth path largely within Casey's control.