Casey's CEO Darren Rebelez: Don't see elevated consumer packaged good prices subsiding

JUST YESTERDAY ANNOUNCING A NEW STRATEGIC PLAN FOR THE NEXT THREE YEARS AT THE COMPANY'S INVESTOR DAY HERE IN NEW YORK CITY JOINING US HERE AT POST NINE, CASEY'S GENERAL STORES' CEO, DARREN REBELLIS. SO YOUR THREE-YEAR STRATEGIC PLAN, YOUR GROWING STORE COUNT, 350 STORES BY THE END OF FISCAL YEAR 2026, ACCELERATE FOOD OFFERINGS, AND PREPARED LABEL OFFERINGS. HOW DO YOU PLAN TO GET THERE AS THIS ORGANIC

GROWTH, IS THIS M&A? BIG CAPEX? WHAT DO YOU THINK? >> WELL, WE'RE GOING TO DO IT THROUGH A COMBINATION OF THINGS. OUR GROWTH ALGORITHM IS ABOUT HALF OF ORGANIC GROWTH WITH THE EXISTING STORE BASE. SO DRIVING SAME-STORE SALES, OUR MERCHANDISING MIX, OUR PREPARED FOODS THAT YOU TALKED ABOUT. WE'RE THE FIFTH LARGEST PIZZA CHAIN IN THE U.S., SO THAT'S THE CROWNED JEWELS OF THE CASEY'S BRAND, SO

IN. IT REALLY OPENS UP A WIDE OPPORTUNITY FOR STORES -- CHAINS LIKE US TO ACQUIRE AND REALLY ADD VALUE TO THOSE STORES. SO -- >> AND BENEFIT FROM SCALE, POTENTIALLY. AND IF I'M KIND OF READING BETWEEN THE LINES HERE, YOU'RE REFERRING TO THE INFLATION PRESSURES, WHICH I WAS LOOKING AT THE TRANSCRIPT FROM YOUR MOST RECENT EARNINGS CALL EARLIER THIS MONTH YOU SAY THAT INFLATION PRESSURES HAVE

SUBSIDED SOME, OF COURSE, DEPENDING ON THE CATEGORY. HOW MUCH OF THOSE PRESSURES HAVE YOU BEEN PRESSING ON TO YOUR CUSTOMERS. AND NOW THAT THEY ARE SUBSIDING, DOES THAT CHANGE THE PRICING AT ALL FOR THE ITEMS IN YOUR STORE? >> THERE'S BEEN A MIX OF THAT? ON THE CONSUMER PACKAGED GOODS SIDES, A LOT OF THOSE COST INCREASES, THAT THE MANUFACTURERS EXPERIENCED GOT PASSED ON TO US AND

WE'VE PASSED THOSE ON WE'VE BEEN ABLE TO KEEP UP WITH THAT I DON'T SEE THOSE PRICE SUBSIDING. ON THE PREPARED FOODS SIDE, IT'S MORE COMMODITY DRIVEN. THINK OF PROTEINS, CHEESE IN PARTICULAR FOR US, WE USE ABOUT 30 MILLION POUNDS OF CHEESE A YEAR IT'S A BIG INPUT COST. AND WE TRY TO PRICE THROUGH THE CYCLE. WE DON'T NECESSARILY RAISE PRICES ALL THE WAY TO COVER THAT

COST, BECAUSE THAT'S -- THAT COMMODITY IS A LITTLE MORE VOLATILE WE KNOW THOSE COSTS WILL COME DOWN AT SOME POINT, SO WE TRY TO MAINTAIN THAT VALUE PROPOSITION FOR OUR GUESTS. AND WE'RE SEEING THAT HAPPEN NOW. WE'VE BEEN ABLE TO KEEP OUR UNIT VELOCITY ON THE PIZZA BUSINESS REALLY STEADY AND NOW ACCELERATING BECAUSE WE'VE BEEN ABLE TO MAINTAIN THAT VALUE PROPOSITION. >> IT'S INTERESTING. GENERAL MILLS,

FOR EXAMPLE, HAD AN EARNINGS PRINT TODAY, AND THEY DID TAKE SOME PRICE, BUT VOLUMES ARE BEGINNING TO SUFFER, AND I JUST WONDER IF NOW IS THE TIME TO PLAY A LITTLE MORE HARDBALL WHEN IT COMES TO AT LEAST PANCKAGED GOODS YOU'RE NOT SENSING THAT? >> NOT AT THIS POINT I THINK THE PRICES HAVE SUBSIDED A LITTLE BIT I MEAN, I SHOULDN'T SAY SUBSIDE. THE COST INCREASES

HAVE SLOWED THEY'RE STILL GOING UP, BUT THEY'RE MODERATING FROM WHERE THEY WERE 6, 9, 12 MONTHS AGO. >> WHAT ARE YOU SEEING WITH REGARD TO THE STATE OF THE CONSUMER YOU FIT IN A CERTAIN AREA WHERE IF WE DID SEE A RECESSION, POTENTIALLY, YOU COULD SEE AN UPTICK IN SALES. ARE YOU SEEING ANY EVIDENCE OF THAT RIGHT NOW I KNOW YOU'RE LARGELY BASED IN THE MIDWEST,

IS THAT CORRECT >> YEAH, THAT'S CORRECT. WE'RE IN 16 STATES IN THE MIDWEST, INTERESTINGLY ENOUGH, ABOUT HALF OF OUR STORE BASE IS IN TOWNS OF 5,000 PEOPLE OR LESS SO VERY MUCH A RURAL PLAY. AND SMALLER TOWNS, SMALLER CITIES, THINK 20,000, 50,000 POPULATION AND SO THOSE CONSUMERS, YOU KNOW, ABOUT THREE QUARTERS OF OUR CONSUMER BASE EARNS $50,000 OR MORE A YEAR AND SO, THAT DOESN'T SOUND

LIKE A LOT, WHEN WE'RE IN NEW YORK CITY, BUT OUR MARKETS, THE STATES THAT WE OPERATE IN, THE MOST EXPENSIVE STATE TO LIVE IN, IN OUR FOOTPRINT, IS RANKED 22nd IN THE COUNTRY IN TERMS OF -- >> WHICH ONE IS THAT ILLINOIS >> SOUTH DAKOTA, ACTUALLY. >> I WOULD HAVE GUESSED ILLINOIS TOO UNTIL I SAW IT SO SEVEN OF THE BOTTOM