CASY Convenience Retail · Convenience stores · Fuel retail · Prepared food · Thesis updated July 12, 2026

Great operator, less room for error

Casey's ended fiscal 2026 with 2,944 stores across 19 states.
Fuel brings in most revenue, but prepared food and grocery carry much higher margins.
Diluted EPS reached $19.16 in fiscal 2026, up 30.9% from the prior year.
Management beat its three-year store growth goal, adding 504 stores versus a goal of 350.
The stock quality story is clear, but the valuation leaves less margin for mistakes.

01 Running thesis

Execution is the story

Casey's closed fiscal 2026 with audited results that support the bull case. Diluted EPS was $19.16, up 30.9% from the prior year. EBITDA was nearly $1.5 billion in the Q4 transcript, and the 10-K showed 23.6% EBITDA growth for the full year.

The company also finished its three-year plan ahead of target. It built or bought 504 stores versus a goal of 350. Same-store sales, meaning sales at stores open long enough to compare year to year, rose 5.2% in prepared food and dispensed beverages and 3.9% in grocery and general merchandise for fiscal 2026.

The bull case rests on repeatable execution. Casey's sells fuel, snacks, and groceries, but the better profit story is inside the store. Pizza, hot sandwiches, bakery, drinks, and now wings give the company more ways to grow ticket size and visit frequency. Casey's Rewards passed 10 million members, giving the company more data to target deals and bring people back.

The bear case is mostly about expectations and outside pressure. Fuel margins were historically high in fiscal 2026, and that may not last. Credit card fees reached $279 million. The business is performing well, but the stock already gives Casey's credit for a lot of that strength.

Jun 2026▲The fiscal 2026 10-K confirmed a record year. Diluted EPS rose 30.9% to $19.16, and Casey's finished its three-year plan with 504 added stores versus a 350-store goal.

Jun 2026▲Q4 results showed record annual earnings and fiscal 2027 EBITDA guidance for 8% to 10% growth. Management also said wings were adding purchases without hurting pizza sales.

Mar 2026▲Q3 strengthened the food-led thesis. Wings expanded to more than 550 stores, and Casey's Rewards passed 10 million members.

Mar 2026▲The Q3 10-Q confirmed same-store growth in prepared food, grocery, and fuel gallons. No new material risk factors were disclosed.

Dec 2025▲Management raised fiscal 2026 EBITDA growth guidance to 15% to 17%. It also explained that higher operating expense was planned support for sales growth.

Dec 2025→The Q2 10-Q showed continued prepared food and grocery growth, with expected margin drag from CEFCO stores. The core thesis held steady.

Sep 2025▲Q1 commentary showed inside sales growth was helped by higher guest traffic. Management also said the CEFCO margin drag was improving faster than expected.

Sep 2025▲The Q1 10-Q showed faster same-store sales growth across prepared food, grocery, and fuel gallons. Diluted EPS rose 19.5% from the prior-year quarter.

02 Business model

Fuel gets traffic, food gets margin

Casey's operates convenience stores mostly in the Midwest and South. As of April 30, 2026, it had 2,944 stores, and about 71% were in towns with fewer than 20,000 people. That small-town focus matters because many stores serve as a local fuel stop, grocery run, and quick meal option at the same time.

Fuel is the biggest revenue line. In fiscal 2026, fuel revenue was $10.6 billion out of $17.6 billion total revenue. But fuel is lower margin than food. Fuel revenue less cost of goods sold was 14.1% of fuel revenue, while prepared food and dispensed beverage was 58.6%.

That mix explains why Casey's cares so much about pizza, hot sandwiches, bakery, drinks, and wings. Inside sales can turn a fuel stop into a meal purchase. The rewards program adds another layer by letting Casey's send targeted offers to more than 10 million members.

Growth comes from new stores and acquisitions. The Fikes acquisition added CEFCO stores and a wholesale fuel network. That adds scale, but it also brings conversion work, lower starting margins at some acquired stores, and more operating costs to manage.

03 Product portfolio

What Casey's sells

Cash cow

Retail fuel

Fuel is the traffic driver and the largest revenue category. The key risk is that fuel margin per gallon can swing with market conditions.

Growth engine

Prepared food and dispensed beverages

This includes pizza, hot sandwiches, bakery, drinks, and other made food. It is smaller than fuel by revenue, but it carries much higher margin.

Option

Chicken wings

Sauced bone-in and boneless wings were in about 850 stores by the end of fiscal 2026. Management says wings are adding visits without hurting pizza sales so far.

Steady

Grocery and general merchandise

This includes snacks, packaged drinks, tobacco and nicotine products, private-label goods, and daily convenience items. Grocery same-store sales rose 3.9% in fiscal 2026.

Option

Wholesale fuel network

This network came with the Fikes acquisition and supplies fuel to dealer and wholesale locations. Casey's said wholesale fuel was about 3% of total fiscal 2026 revenue.

Steady

Car washes and other revenue

As of April 30, 2026, 241 stores offered car washes. Other revenue also includes items such as lottery, with different cost and margin profiles.

04 Business segments

Revenue mix is fuel-heavy

Fuel60%modest

Grocery and general merchandise26%modest

Prepared food and dispensed beverage10%growing fast

Other3%growing fast

The mix below uses fiscal 2026 revenue by category from the 10-K. Fuel is the largest revenue category, but inside-store categories drive a much larger share of gross profit than their sales share suggests.

05 Risk factors

What could go wrong

Fuel margin gives back gains

High impact · Medium odds

Fuel margin was strong in fiscal 2026. The 10-K says fuel revenue less cost of goods sold rose to 42.6 cents per gallon from 38.7 cents in fiscal 2025. If that level falls back, earnings can slow even if store traffic stays healthy.

We watchFuel revenue less cost of goods sold per gallon versus the 42.6 cents reported for fiscal 2026.

Inside-store spending slows

Medium impact · Medium odds

Prepared food, drinks, and grocery items are a big part of the profit story. A weaker consumer could buy less pizza, fewer drinks, or cheaper items. That would matter because prepared food and dispensed beverage had a 58.6% revenue less cost of goods sold margin in fiscal 2026.

We watchPrepared food same-store sales and inside margin in quarterly reports.

CEFCO conversion takes longer

Medium impact · Medium odds

Casey's bought Fikes, owner of CEFCO Convenience Stores, and added 198 total stores in the prior fiscal year. Those stores create a growth path, but they need integration work. If conversions lag, the acquired stores may stay below Casey's normal margin profile for longer.

We watchManagement updates on CEFCO remodel cadence and acquired-store margin drag.

Credit card fees keep rising

Medium impact · High odds

Credit card fees are now a named cost pressure. Casey's reported $279 million of credit card fees in fiscal 2026. Higher retail prices, more card use, or higher transaction volume can push this cost up.

We watchAnnual credit card fee dollars and same-store operating expense growth.

Food input costs spike

Medium impact · Medium odds

Pizza, wings, bakery, and sandwiches depend on food ingredients, labor, and waste control. Casey's improved prepared food margin in fiscal 2026 partly through better waste. If cheese, chicken, dough, or labor costs rise faster than menu prices, margins can narrow.

We watchPrepared food revenue less cost of goods sold margin, especially versus 58.6% in fiscal 2026.

06 Quick answers

In one breath

How does Casey's make money?

Casey's sells fuel, groceries, drinks, snacks, and prepared food through convenience stores. Fuel brings in the most sales, while prepared food and grocery tend to carry higher margins.

Why is Casey's known for pizza?

Pizza is a core prepared food item and a key part of Casey's brand. Management has said whole pizza strength helps prepared food margins because it is one of the highest-margin subcategories.

What is Casey's Rewards?

Casey's Rewards is the company's loyalty program. It had more than 10 million members at the end of fiscal 2026, giving Casey's a way to target offers and drive repeat visits.

What is the main investor concern for CASY?

The main concern is not poor execution right now. It is whether high fuel margins, strong inside-store sales, and acquisition gains can continue enough to support the current valuation.