Casey’s General Stores (NASDAQ:CASY) reported higher earnings and profitability for its third quarter ended Jan. 31, 2026, driven by continued momentum in prepared foods and inside margins, as well as stronger fuel profitability. Management also raised its fiscal 2026 EBITDA growth outlook and reiterated progress on unit growth, loyalty, and acquisition integration efforts discussed on the company’s earnings call.
Quarterly results show earnings and EBITDA growth
Chairman, President and CEO Darren Rebelez said diluted earnings per share were $3.49, up 50% from the prior year, while net income increased 49% to $130 million. EBITDA totaled $309 million, up 27.5% year over year.
Casey’s gross profit was $1.01 billion, up 10.3%, reflecting gains in both inside and fuel gross profit. Bramlage said inside gross profit margin was 42.2%, up 130 basis points, while fuel margin was $0.41 per gallon, up 4.6 cents from the prior year.
Inside sales driven by prepared food and margin expansion in grocery
Rebelez said inside same-store sales rose 4% in the quarter (7.9% on a two-year stack) with an average margin of 42.2%. Same-store prepared food and dispensed beverage sales increased 4.3% (9.2% on a two-year stack) with an average margin of 58.3%.
Management pointed to continued strength in core prepared food offerings, including whole pies, hot sandwiches, and all-day breakfast items. Rebelez also highlighted product innovation, including two specialty pizzas—Twisted Pepperoni and Ultimate Meat.
Same-store grocery and general merchandise sales increased 4% (7.4% on a two-year stack) with an average margin of 35.7%. Bramlage said grocery and general merchandise margin rose 150 basis points year over year, citing “strong cost of goods management” and a favorable mix shift.
During Q&A, management said non-alcoholic beverage strength was driven primarily by energy drinks, with energy up about 14% in the quarter, and noted strong growth in flavor-enhanced waters. Rebelez said he did not believe customers were “stocking up” ahead of winter weather during the quarter.
Management also discussed changes within nicotine. Rebelez said combustible cigarette mix declined while nicotine alternatives grew 31% and vapor rose 12%, aided by improved enforcement actions against illicit vape. He said those higher-margin subcategories contributed to favorable mix and, more broadly, that the overall nicotine category has recently turned positive as combustible declines slowed and alternatives grew.
Fuel performance and volatility commentary
On the fuel side, Rebelez said same-store gallons sold increased 0.4% while fuel margin exceeded $0.40 per gallon. Bramlage added that retail fuel sales declined $57 million as a 2.3% increase in fuel gallons sold was offset by a 4.6% decrease in average retail fuel price; the average retail price was $2.72 per gallon compared with $2.85 a year earlier.
Rebelez said OPIS data indicated an approximate 4% decline in Midcontinent industry gallons during the quarter, which he said suggests Casey’s continued to take market share.
Asked about geopolitical events and fuel price volatility, Rebelez said volatility is typical for the business and described how margins can compress when wholesale costs rise faster than retail prices, then expand when costs decline and retail lags. He said that over a full cycle it has “historically…ended up being a net positive” for fuel margins. Rebelez also said the company generally does not see demand destruction until retail prices approach $5 per gallon, adding that prices in Casey’s footprint were around $3 per gallon at the time of the call.
Expenses, capital allocation, and updated fiscal 2026 outlook
Rebelez said same-store operating expense excluding credit card fees increased 4.6%, while same-store labor hours were down slightly and guest satisfaction scores were at an all-time high for the fiscal year.
Bramlage said total operating expenses increased 4.1% year over year. He noted the comparison benefited from $13 million of one-time deal and integration costs incurred in the prior year related to the closing of the Fikes acquisition. He attributed the current-year operating expense increase to several factors including unit growth, higher labor rates partially offset by lower labor hours, snow removal from unfavorable weather, and higher variable incentive compensation and charitable contributions.
Net interest expense was $23.4 million, down $6 million, which Bramlage said was primarily due to paying off debt associated with the Fikes transaction. The effective tax rate was 24.1% versus 19.2% a year ago; Bramlage said the prior year benefited from a one-time tax item tied to revaluing state deferred tax liabilities after the Fikes close.
Liquidity at quarter-end was $1.4 billion, and the credit facility debt-to-EBITDA ratio was 1.6x. The company generated $76 million in free cash flow in the quarter, compared with $91 million a year ago. The board maintained the quarterly dividend at $0.57 per share, and the company repurchased about $76 million in shares during the quarter.
Casey’s updated fiscal 2026 guidance. Bramlage said the company now expects:
- EBITDA to increase 18% to 20%
- Inside same-store sales to increase 3.5% to 4.5%
- Inside margin of 41.5% to 42.5%
- Total operating expenses to increase about 10%
- Tax rate of 23.5% to 24.5%
He said February results showed strong same-store volumes inside and outside the store, fuel margin in the low $0.40s per gallon, and cheese costs slightly favorable versus the prior year. He added that fourth-quarter operating expense is expected to rise by a mid-single-digit percentage, partially due to higher variable incentive compensation.
Growth initiatives: wings rollout, loyalty milestone, and integration progress
Rebelez highlighted the expansion of Casey’s chicken wings test, which began in the Des Moines market at 225 stores and grew to more than 550 stores by the end of the third quarter. He said the platform has been “largely incremental,” and noted that pizza units in wing-selling stores were up high single digits during the quarter, although management did not provide specific financial metrics for wings.
Management said the wings rollout will be paced by distribution center to ensure supply chain efficiency and will require equipment installation and training. Rebelez said the rollout to the rest of the chain would occur over roughly the next two years. He added that the company has also rolled out fries as a commonly requested side item.
Bramlage and Rebelez described the wing equipment investment as a “pretty light lift,” primarily adding a commercial fryer, and said labor hours are allocated based on demand and time-and-motion studies rather than automatically adding a full-time position.
Rebelez also said Casey’s Rewards surpassed 10 million members. He emphasized the company’s focus on fuel capabilities, including business-to-business relationships, growing self-supply, and increasing capacity to haul fuel on Casey’s trucks.
On acquisition integration, Bramlage said the company is where it expected to be on the integration of Fikes/CEFCO and noted progress in G&A and fuel-related synergies, including converging supply agreements during the quarter. He said prepared food synergies represent about 40% of the expected total and will build with store conversions; management said it is converting an additional 50 stores with kitchens and expects those conversions to be completed by the end of the fiscal year, with a broader ramp in prepared food synergies in the first half of the next fiscal year.
Rebelez said the company remains on track to open 80 stores this year through a mix of new-store development and M&A and expects to reach 500 stores over the company’s three-year planning horizon. He described a long-term framework of roughly 4% growth from organic operations and about 4% from unit growth, noting the company pulled back on unit growth this year to focus on integration work.
Looking ahead, Rebelez said Casey’s will host its next Investor Day on June 24 in New York City, where it plans to release its next three-year strategic plan.
About Casey’s General Stores (NASDAQ:CASY)
Casey’s General Stores, Inc (NASDAQ: CASY) is a U.S.-based convenience store chain that operates retail fuel stations and food-focused convenience outlets. Founded in 1959 in Boone, Iowa, the company has grown from a single neighborhood store into a regional operator known for combining traditional convenience retailing—fuel, packaged goods and tobacco—with a larger emphasis on fresh and prepared foods.
The company’s stores typically offer gasoline and diesel alongside a range of grocery essentials, grab-and-go items and made-to-order foodservice.
