Casey's General Stores Earnings: Robust Fuel Profits and In-Store Margins Propel Solid Results

Narrow-moat Casey’s General Stores delivered strong fiscal 2025 first-quarter results, as earnings per share of $4.83 outpaced our $4.30 estimate amid strong in-store margins and impressive expense control. The company continues to enjoy robust fuel profits, as margin per gallon came in at $0.41, consistent with our forecast. As independent convenience stores struggle with elevated operating costs and flattening fuel demand, we expect the industry’s breakeven fuel margin to remain higher than its prepandemic levels, allowing larger and more experienced operators like Casey’s to reap the benefits. As such, we still think the firm is poised to earn a long-term fuel margin of around $0.40 per gallon, up from its $0.19 average of 2015-19. Our long-term outlook is unchanged, but we plan to modestly raise our fair value estimate from $280 to account for better-than-expected near-term results and the time value of money.