Casey’s General Stores, Inc. (NASDAQ:CASY) Q2 2023 Earnings Call Transcript

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Darren Rebelez: Yes, Krisztina, and the breakfast daypart, we’ve really tried to balance a couple of things we’ve leaned both on value and on innovation. And so, if you look at this past quarter, we had the Busch Light Beer Cheese Breakfast Pizza, which was a great innovation we saw tremendous momentum in our breakfast pizza sales as a result of that. We also leaned into our Ultimate Breakfast Burrito, which has been a real popular along with our guests and so pushing that on the innovation side, we’re also had a $4 value offer for the more price-conscious consumers. So, I think we were able to balance those between value and innovation. On the value side, a $4 meal deal is a really good value relative to QSR in this space. And so we had a really strong results in breakfast.

About 10% growth in the breakfast daypart versus prior year and that was cycling over a 10% from the prior year, so, with the breakfast launch last year. So really strong value proposition, we’re seeing that momentum in the breakfast daypart.

Krisztina Katai: That’s great. And then I just wanted to follow up on the private label discussion. All national brands starting to notice some of the unit losses as you gain some brand and volume share and is that perhaps you driving a different conversation where they’re starting to offer some concessions to bring down their prices. Well, it’s not really happening yet.

Darren Rebelez: Well, you know, that’s an ongoing discussion we have with our supplier partners. And that’s one of the things that we engage in during our joint business planning is talking about the breadth and depth of assortment. And the cost of goods and how we balance all of those things. And so there is a discussion about space, there is a discussion about cost of goods, there is a discussion about promotional activity. And we pull all of those things together. So, certainly having alternative products, that can offer an incremental value to the guest is important to us. And so, there are national branded suppliers want to stay in a relevant range. So yes, we definitely engaged in those discussions and we’re in the process for that right now.

Operator: Thank you. Our next question comes from the line of John Lawrence with Benchmark. Your line is now open.

John Lawrence: Yes, thanks. Good morning, guys.

Steve Bramlage: Good morning.

John Lawrence: Could you – just a second, you mentioned construction being delayed. Does this have any real impact on trying to get the remodel stores, adding the kitchens to the acquisitions, does that push that out a little bit?

Darren Rebelez: You know, John, that – the construction delays haven’t been so much on the remodel activity from a construction or supply chain standpoint. That’s been more driven by permitting. It just takes time depending on the municipality to get through the permitting process on those remodels.

John Lawrence: Great, thanks. And second one from me, just – can you talk about anything innovation-wise, that’s – I know you don’t want to say too much competitively, but things have been worked down in prepared food innovation-wise?

Darren Rebelez: You’re right, John. I don’t want to talk too much detail about that. I’ll tell you that, our culinary team is hard at work, and we’ve got some nice innovation lined up for the first half of the calendar year, but that’s about all I’m going to say about that one.

Operator: Thank you. And I’m currently showing no further questions at this time. I’d like to hand the call back over to Darren Rebelez for closing remarks.

Darren Rebelez: All right. Thank you for taking the time today to join us on the call. We’ve had a great first half to the fiscal year and are excited to continue that momentum into the second half. And with the holiday season approaching, we wish everyone a warm and safe holiday season, especially our team members who continue to serve our guests and our communities every day.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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