Caseys General Stores, Inc.

Good day, and thank you for standing by. Welcome to Casey's General Storage Second Quarter Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After this week's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Brian Johnson, Senior Vice President of Investor Relations and Business Development. Please go ahead.

Good morning, and thank you for joining us to discuss the results from our second quarter-ended October 31, 2023. I am Brian Johnson, Senior Vice President of Investor Relations and Business Development. With me today are Dan Rebellis, Board Chair, President and Chief Executive Officer, and Steve Bramlage, Chief Financial Officer. Before we begin, I'll 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 expectations for 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 future results expressed or implied by those forward-looking statements, including but not limited to the integration of the recent acquisitions, our ability to execute on our strategic plan or to realize benefits from the strategic plan, the impact and duration of the conflict in Ukraine and related governmental actions, an annual report on Form 10-K and quarterly reports on Form 10-Q as filed 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 CASES 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 the operating expense increase for the second quarter, can be found on our website at www.caseys.com under the Investor Relations link. With that said, I'd now like to turn the call over to Darren to discuss our second quarter results. Darren?

Thanks, Brian, and good morning, everyone. We'll discuss the excellent second quarter results in a moment. First, I want to thank our teams. including the new team members in our 17th state of Texas, for their dedication and hard work. We're excited to welcome the great state of Texas to the Casey's community. I know I speak for our entire team when I say we're extremely humbled by the response from our caring guests and dedicated team members to our annual Veterans Giving Campaign in November. This year's campaign resulted in over $1.2 million, just an outstanding outcome and for two great causes. Hope for the Warriors and Children of Fallen Patriots. We are so grateful to our communities and guests for their generous act of rounding up their purchase. As a veteran myself, I know the great sacrifices these families have made and the challenges they face. Thank you to our partners at PepsiCo who contribute to this campaign, our CASES team members, and especially to our guests who truly do good when they shop at CASES. Now let's discuss the results from the quarter. Diluted earnings per share finished at $4.24 per share, a 16% increase from the prior year. Inside sales remained strong, driving inside gross profit dollars up 10% to $553 million. The company generated $159 million in net income, an increase of 15%, and $306 million in EBITDA, an increase of 13% from the prior year. Inside the store, same-store sales were up despite lapping a very strong second quarter last year, while margins improved both sequentially and year-over-year as ingredient costs improved. On the fuel side of the business, we continue to strike the right balance between volume and margin. Similar to the first quarter, there are no significant macro events that impacted wholesale fuel costs. With each passing quarter, it becomes more evident that higher industry fuel margins are here to stay. With another strong quarter, which led to our highest EBITDA in the first six months in the company's history, the strength of our unique business model was again on full display. The team continues to do an excellent job operating the business efficiently and effectively, both inside and outside the store, as evidenced by same-store labor hours being down 2%, while our overall guest satisfaction score was up over 400 basis points over the prior year. I would now like to go over our results and share some of the details in each of the categories. Inside same-store sales were up 2.9% from second quarter, or 11% on the two-year stack basis, with an average margin of 41.1%. We saw notably strong performance in whole pizza pies, bakery, and dispensed beverage. We're also very pleased with the continued inside margin expansion this quarter. Same-store prepared food and dispensed beverage sales were up 6.1% or 17.2% on a two-year stack basis, with an average margin of 59%, up approximately 230 basis points from the prior year. Whole pies performed well in the quarter, and we also saw strong performance with appetizers and sides. Margin was favorably impacted by softening in commodities, notably cheese, during the quarter. Same-store grocery and general merchandise sales were up 1.7% or 8.7% on a two-year SAC basis with an average margin of 34%, an increase of approximately 70 basis points from the prior year. We saw positive momentum in the category, notably in alcoholic beverages, and our private label program continues to be a great value option with bottled water and cases chips performing well in the quarter. For fuel, same-store gallons sold were flat, with a fuel margin of 42.3 cents per gallon. Our fuel team is striking the right balance between volume growth and margin, and the results continue to show it. This quarter marks the 10th quarter in a row, with fuel margins above 34.5 cents per gallon, and five of the last six quarters have been over 40 cents per gallon. Our volume continues to outperform our geographic market as well, as Opus Fuel Gallon sold data shows the mid-continent region down approximately 5% in the quarter. I'd now like to turn the call over to Steve to discuss the financial results from the second quarter. Steve?