Casey's targets 8-10% EBITDA growth through store expansion, prepared foods, and efficiency. The consumer is holding up, with lower-income customers seeking value. AI is used for demand planning and operational efficiency.
Asks about the 8-10% EBITDA growth target and the deceleration from the previous plan.
Romaine Bostick
Darren Rebelez
The 8-10% EBITDA growth places Casey's in the top quintile of S&P 500 retail. Growth comes from prepared foods (5th largest pizza chain), 400 new stores over 3 years, and efficiency. The previous plan included a large acquisition that was opportunistic.
Asks about the expansion into Texas and the competitive landscape.
Romaine Bostick
Darren Rebelez
Texas is a fast-growing market with a strong economy. Casey's operates in towns of 20,000 or less, which is 'Casey's country'. There is a long runway: 550 stores in Iowa (3M people) vs. 170 in Texas (30M people).
Asks about consumer spending trends given inflation.
Romaine Bostick
Darren Rebelez
Consumers are hanging in there. Upper two income cohorts (75% of guest base) are spending as before. The lower 25% are more discerning and seeking value, which benefits Casey's prepared foods vs. restaurants.
Asks about AI deployment for forecasting and inventory.
Romaine Bostick
Darren Rebelez
Casey's uses AI for demand planning, resulting in higher fill rates and 33% reduction in working capital. AI also helps district managers prioritize store visits.
We don't have an AI strategy, we have a business strategy.
