Why was EBITDA up 11.4% while net income and EPS were flat?

EBITDA excludes interest, taxes, and depreciation and amortization. Gross profit growth from the Fikes acquisition lifted EBITDA, but net interest expense more than doubled to $29.4 million from $14.1 million because of acquisition debt, and D&A rose to $105.2 million from $89.0 million. Those items absorbed the EBITDA gain below the operating line.

Is the Fikes acquisition performing in line with Casey's existing stores?

Partly. Management attributed the decline in inside margin and fuel margin largely to Fikes stores, and about $13 million of one-time deal and integration costs were recorded in the quarter. Same-store metrics, which exclude acquired stores, showed underlying growth in inside sales (3.7%) and fuel gallons (1.8%), suggesting the legacy base remains healthy. The filing does not break out Fikes-specific profitability.

Did management change its fiscal 2025 guidance?

Only partly. The company raised its EBITDA growth outlook to approximately 11% and set capital expenditures at about $500 million. It did not update same-store inside sales (3% to 5%), same-store fuel gallons (negative 1% to positive 1%), total operating expense growth (11% to 13%), net interest expense (about $90 million), D&A (about $410 million), the tax rate (23% to 25%), or new store openings (about 270).

Is the dividend and capital return program at risk?

The filing shows no sign of risk. The Board approved a $0.50 quarterly dividend payable May 15, 2025, and the company had about $1.3 billion of liquidity at quarter-end. No shares were repurchased in the quarter, and about $295 million remains under the buyback authorization. Management's focus appears to be on deleveraging and integrating acquisitions, which could limit buybacks in the near term.

CASY 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed March 11, 2025. Cited figures are marked; the original filing is the authoritative source.

Casey's General Stores reported third-quarter fiscal 2025 results (quarter ended January 31, 2025) that were mixed for shareholders.

Diluted EPS was flat at $2.33^a and net income was flat at $87.1 million, while EBITDA rose 11.4% to $242.4 million. Growth came mainly from the Fikes acquisition, which added 254 stores over the prior year. Total inside sales rose 15.3% and total fuel gross profit rose 17.4%, but higher interest expense on acquisition debt and higher depreciation offset the operating gains.

Operating expenses rose about 18%, including roughly $13 million^b of one-time Fikes deal and integration costs. Organic trends were solid. Inside same-store sales grew 3.7% (8.0% on a two-year stack), led by prepared food and dispensed beverages, and same-store labor hours fell 2% for the eleventh consecutive quarter.

Inside margin declined 40 basis points to 40.9%, mainly from Fikes stores and a coffee promotion. Same-store fuel gallons rose 1.8%, but fuel margin fell to 36.4 cents per gallon from 37.3 cents a year earlier. For fiscal 2025, management raised its EBITDA growth outlook to approximately 11% and expects capital expenditures of about $500 million^c.

It left most other guidance unchanged, including same-store inside sales growth of 3% to 5%, same-store fuel gallons of negative 1% to positive 1%, and about 270 new stores. Liquidity stood at approximately $1.3 billion^d at quarter-end, and the Board declared a $0.50 quarterly dividend.

02—Key points

Key Highlights

Diluted EPS of $2.33 and net income of $87.1 million were both flat year over year, as higher interest expense and depreciation from the Fikes acquisition offset EBITDA growth.
EBITDA rose 11.4% to $242.4 million, driven by higher inside and fuel gross profit; total inside gross profit grew 14.3% to $573.1 million and total fuel gross profit grew 17.4% to $302.1 million.
Inside same-store sales grew 3.7%, with prepared food and dispensed beverages up 4.7%, while inside margin fell 40 basis points to 40.9%.
Same-store fuel gallons rose 1.8%, but fuel margin declined to 36.4 cents per gallon from 37.3 cents a year earlier, largely due to Fikes stores.
Store count reached 2,893 at January 31, 2025, up from 2,658 at April 30, 2024, after 228 acquired stores and 21 new builds, offset by 14 closures.
FY2025 EBITDA growth outlook was raised to approximately 11%, and capital expenditures are now expected at about $500 million; other guidance was unchanged, including $25 to $30 million of Fikes integration costs.
Liquidity of about $1.3 billion, including $395 million in cash, and a $0.50 quarterly dividend were announced; no shares were repurchased in the quarter, leaving about $295 million under the authorization.

03—Questions

Frequently Asked Questions

Why was EBITDA up 11.4% while net income and EPS were flat?
EBITDA excludes interest, taxes, and depreciation and amortization. Gross profit growth from the Fikes acquisition lifted EBITDA, but net interest expense more than doubled to $29.4 million from $14.1 million because of acquisition debt, and D&A rose to $105.2 million from $89.0 million. Those items absorbed the EBITDA gain below the operating line.
Is the Fikes acquisition performing in line with Casey's existing stores?
Partly. Management attributed the decline in inside margin and fuel margin largely to Fikes stores, and about $13 million of one-time deal and integration costs were recorded in the quarter. Same-store metrics, which exclude acquired stores, showed underlying growth in inside sales (3.7%) and fuel gallons (1.8%), suggesting the legacy base remains healthy. The filing does not break out Fikes-specific profitability.
Did management change its fiscal 2025 guidance?
Only partly. The company raised its EBITDA growth outlook to approximately 11% and set capital expenditures at about $500 million. It did not update same-store inside sales (3% to 5%), same-store fuel gallons (negative 1% to positive 1%), total operating expense growth (11% to 13%), net interest expense (about $90 million), D&A (about $410 million), the tax rate (23% to 25%), or new store openings (about 270).
Is the dividend and capital return program at risk?
The filing shows no sign of risk. The Board approved a $0.50 quarterly dividend payable May 15, 2025, and the company had about $1.3 billion of liquidity at quarter-end. No shares were repurchased in the quarter, and about $295 million remains under the buyback authorization. Management's focus appears to be on deleveraging and integrating acquisitions, which could limit buybacks in the near term.

04—Continue

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