Foodservice Leads Casey's Through Its Latest Quarter
ANKENY, Iowa — Casey's General Stores Inc.'s focus on accelerating its foodservice business is paying off.
In the company's latest earnings call detailing the results from the third quarter of the retailer's fiscal year 2025, President and CEO Darren Rebelez pointed to Casey's prepared food and dispensed beverage offerings as a key driver of the chain's results.
In June 2023, Ankeny-based Casey's unveiled the next three-year leg of its strategic plan. The three primary strategies in this chapter of the retailer's growth are accelerating its food business, growing units and enhancing operational efficiencies, as Convenience Store News previously reported.
"Our prepared food and dispensed beverage team continues to do an excellent job innovating and finding the right quality products to serve to our guests," Rebelez said on March 12. "The hot sandwiches launched last year have continued to perform very well. We also had a limited release of new chicken wings and fries in our Des Moines [Iowa] market with encouraging results so far."
[Read more: Casey's Adds New Sandwich Lineup to Menu]
Notably, Casey's reported that its same-store prepared food and dispensed beverage business saw sales increase 4.7% for the third quarter, or 12.6% on a two-year stack basis, with an average margin of 57.8%. Hot sandwiches continued to perform well and were up more than 50%. Bakery was up nearly 10%, Rebelez said.
Category Closeups for Q3 FY25
- Inside same-store sales were up 3.7%
- Same-store prepared food and dispensed beverages were up 4.7%
- Same-store grocery and general merchandise sales were up 3.3%
- Same-store fuel gallons sold were up 1.8%
Executing on Strategic Pillars
Casey's is also making headway on the other two pillars of growth: unit growth and enhanced operational efficiencies.
Committed to growing its portfolio, the retailer moved forward with a major acquisition to date this past fall. In November, Casey's officially added 198 convenience stores to its network with acquisition of Fikes Wholesale, owner of CEFCO convenience stores.
The deal marked Casey's most significant deal yet, bringing its total store count to approximately 2,900 locations across 17 states. The transaction included 148 c-stores in Texas, a highly strategic market for Casey's, along with 50 other stores in Alabama, Florida and Mississippi, expanding the retailer's reach in the South.
"Our store growth pillar was on full display this quarter, integrating the Fikes transaction. Our dedicated integration team has done an excellent job getting our newest team members comfortable operating in the Casey system. We're able to do this while maintaining a strong balance sheet," Rebelez said. "Given our track record of executing and integrating meaningful acquisitions, we are well-positioned to continue this strategy and enhance shareholder value."
As for enhancing operational efficiency, the company achieved its 11th consecutive quarter of reduced same-store labor hours as a result of the "strong work from our continuous improvement in operations teams," the chief executive said. "This work has been done without compromising the Casey's experience, and we continue to see guests and team member satisfaction scores rise.
Overall, this quarter was another great example of how our differentiated business model, coupled with a great team, leads to outstanding results," Rebelez concluded. "With a high level of execution on our strategic plan, we are able to guide to EBITDA growth of approximately 11%, outpacing our standard growth algorithm."
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