Caseys General Stores, Inc.

Good day and thank you for standing by. Welcome to the Q3 fiscal year 2025 Casey's General Stores earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, 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 third quarter-ended January 31, 2025. I am Brian Johnson, Senior Vice President, Investor Relations and Business Development. With me today are Dan Rebellas, Chairman, President, and Chief Executive Officer, as well as Steve Bramlich, 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 and Litigation Reform Act of 1995. These forward-looking statements include any statements relating to the potential impact of a FIX transaction, 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, as well as other risks, uncertainties, and factors which are described in our most recent 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 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 detailed breakdown of the operating expense increase for the third quarter, can be found at our website at www.caseys.com under the Investor Relations link. With that said, I would now like to turn the call over to Darren to discuss our third quarter results. Darren?

Thanks, Brian, and good morning, everyone. We're excited to discuss the excellent third quarter results in a moment. Before I do, I want to thank the entire CACES team for delivering another outstanding quarter. I'd also like to highlight our Feeding America campaign that kicked off in late February in partnership with Celsius. Through April 1st, we're excited to be able to help communities in need, including rural areas in CACES country, combat hunger and food insecurity. Now let's get into the results from the quarter. finished at $2.33 per share, and net income was $87 million, both flat with the prior year. EBITDA was $242 million, up 11% from the prior year. Inside sales were up over 15%, and fuel gallons sold were up over 20%, while our store count growth was up 10% versus the prior year, an encouraging sign that the economic impact of the stores we were building and buying is greater than the company average. Inside the store, prepared food innovation was also a key driver of strong performance. With regards to fuel, the team managed to outperform the geographic market and grow same-store gallons with fuel margins over $0.36 per gallon. The business continues to execute on our three-year strategic plan as we are growing the food business, accelerating unit growth, all while operating the stores more efficiently. I'd now like to go over our results and share some of the details in each of the categories. Inside, same-store sales were up 3.7% for the quarter, or 8% on a two-year stack basis, with an average margin of 40.9%. Same-store prepared food and dispensed beverage led the way, as sales were up 4.7%, or 12.6% on a two-year stack basis, with an average margin of 57.8%. Hot sandwiches continued their strong performance up over 50%, and bakery also performed well, up nearly 10%. Margin was down approximately 180 basis points from the prior year, due primarily to the addition of the Sefco stores that have a lower margin profile, as well as the coffee promotion that featured our new flavor profiles. Same-store grocery and general merchandise sales were up 3.3%, or 6.2% on a two-year stack basis. with an average margin of 34.2%. Non-alcoholic beverages performed well in the quarter, with energy drinks continuing a strong momentum up approximately 18%. Margin increased approximately 40 basis points for the prior year, primarily due to a favorable product mix shift. For fuel, same-store gallons sold were up 1.8%, with a fuel margin of 36.4 cents per gallon. Opus Fuel Gallon sold data shows the mid-continent region down approximately 4% in the quarter, indicating that we're taking market share. We believe our high-quality in-store experience drives traffic to our sites and is a significant competitive advantage. Operating expense management remains top of mind, and the third quarter saw an increase of just 3.2% on a same-store, excluding credit card fee basis. Our continuous improvement team has identified processes that can be simplified while still serving the guests at a high level. The results are there, as same-store labor hours were down 2%. I'd now like to turn the call back over to Steve to discuss the financial results from the third quarter.