Casey's Looks Poised to Continue Consolidating the Convenience Store Industry in the Rural Midwest

Despite operating in a highly fragmented convenience store industry where competition is omnipresent and barriers to entry are minimal, Casey’s financial performance continues to be admirable. As gasoline demand in the United States has shown signs of flattening over the past decade and store operating costs continue to rise, independent convenience store operators have raised fuel margins to compensate. As a result, Casey’s has enjoyed a significant uptick in profitability as its fuel margins expanded from about 20 cents per gallon in 2019 to about 40 cents in fiscal 2024. Due to its significant size and scale relative to smaller independent convenience stores, we think the firm is poised to continue reaping the benefits of a structurally higher fuel margin environment.