Casey's General Stores shares fell as much as 15% after inside same-store sales growth of 3.2% missed expectations, despite a fiscal first-quarter beat on revenue, earnings and EBITDA. Management kept its full-year guidance unchanged, leaving investors to weigh whether the deceleration signals a persistent slowdown or an overreaction at a premium valuation.
A deceleration in Casey's General Stores Inc.'s core in-store business erased the benefit of a fiscal first-quarter earnings beat, sending shares down as much as 15%. The convenience-store operator posted adjusted earnings per share of $7.37 for the quarter ended July 31, topping the $6.68 consensus by $0.69, while revenue of $5.68 billion beat the $5.57 billion estimate.
"The operations team delivered an exceptional guest experience during our busiest quarter of the year," Darren Rebelez, chairman, president and chief executive officer, said. "We accomplished all of this while running ahead of schedule on our integration of the Fikes acquisition."
Revenue rose 24.3% from $4.57 billion a year earlier, with net income up 27.1% to $273.7 million and EBITDA up 17.1% to $485.1 million. Inside same-store sales growth of 3.2% decelerated from 4.3% in the prior-year quarter and 5.5% in the immediately preceding quarter, with prepared food and dispensed beverage comps easing to 4.8% from 5.6% and grocery and general merchandise comps to 2.7% from 3.8%. Total inside sales climbed 5.6% to $1.78 billion.
Fuel delivered the countervailing strength. Same-store gallons sold slipped 0.3%, reversing 1.7% growth a year earlier, but fuel margin expanded to 47.8 cents per gallon from 41.0 cents, lifting total fuel gross profit 19.6% to $446.9 million. Inside gross margin improved 30 basis points to 42.2%, and the prepared-food margin widened to 59.3% from 58.0%. Operating expenses rose 8.0% to $754.1 million on higher store count, credit-card fees and labor, with same-store operating expenses excluding card fees up 5.0% versus 3.0% a year ago.
Management kept its fiscal 2027 outlook unchanged, projecting inside same-store sales growth of 2% to 5%, inside margin above 42%, same-store fuel gallons between a 1% decline and a 1% increase, and EBITDA growth of 8% to 10%. The company plans to open at least 120 stores and spend about $800 million on property and equipment, ending the quarter with roughly $1.4 billion of available liquidity and $973 million remaining under its share-repurchase authorization after buying back $45.6 million of stock.
The selloff reflects a valuation reset rather than an accounting miss. At the $733.49 regular-session close, the stock traded at about 35 times trailing earnings, a premium that left little room for decelerating in-store growth; an after-hours price near $660 would cut the multiple to roughly 32 times. The unchanged guidance suggests management sees the 3.2% inside comp as consistent with its full-year range, but if fuel margins normalize while same-store operating costs keep rising faster than inside sales, EBITDA growth could drift toward the low end of the 8% to 10% target. Investors will watch the Sept. 9 conference call for whether the deceleration reflects deliberate value pricing, tougher comparisons or a more persistent slowdown, and how quickly the Fikes stores contribute.
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