Casey's General Stores (CASY) 7 Jun 232023 Q4 Earnings call transcript

Good morning and thank you for standing by. Welcome to the Fourth Quarter Full-Year 2023 Casey’s General Stores Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

to Johnson, conference Relations Senior Development. like speaker to and now Brian today, Vice would hand over the your Business I President, Investor go Please ahead.

Financial results joining Good are April year-ended Darren me Chief Relations I Officer. Senior and to you and and Johnson, XXXX. fourth Executive for Rebelez, Brian Steve President, morning discuss and President thank XX, Bramlage, the Officer; today Vice from am fiscal Business our quarter With Chief us and Investor Development.

financial I'll statements begin, certain Private supply made and the and meaning conditions, we relating XXXX. or needs, expectations growth business that and stores. Before remind call statements chain, sources statements any liquidity assumed Act the by you investor to possible periods, These operations, for related company's future integration this may of at include forward-looking our opportunities, Securities or synergies, strategies, Reform and us within during Litigation performance constitute plans of statements forward-looking the future results

our and filed reports other uncertainties and the and There Ukraine and differ not recent XX-K number Form may the of in results risks, statements, conflict related on by most Report but which other forward-looking actual and the the from cause on to of our in on as future our unknown our factors impact plan, Form to XX-Q and are those risks, plan strategic well actions duration the on benefits of or from expressed as or recent available strategic that any SEC Annual are including quarterly results implied to a our integration as acquisitions, ability limited materially website. uncertainties, and the known execute to realize governmental with described factors

call as as result revise and to information, found otherwise. current statements the of for at this intention at financial breakdown of be future whether link. events the Relations with to GAAP today of call, as respect disclaims our well Investor non-GAAP this increase as in Any A a Casey's detailed forward-looking obligation the reconciliation expense update quarter future reflect during to or events, our website or views the fourth of under www.caseys.com made any forward-looking statements can or measures new referenced operating

With the I'd fourth that our over results. Darren and Darren? discuss said, to fiscal year now like turn call to to

a Thanks, and in everyone. We're forward our Brian, looking morning, moment. to good sharing results

to by their our So fiscal record I year. members would team a to Casey's like XX,XXX and efforts thanking start contribution for tireless

three-year of the set strategic to extremely that plan in accomplish. of communities the on reflect is we we've serve. out of I the January able proud we at As what Casey's heart XXXX, been I'm

all, food and their we impact our positive have make, and on communities. shows guest we this the we give teams feedback in Our delicious receive, the the

‘XX, committed partners, fiscal over all guests, recovery our donations. our new In thank enabled playgrounds supplies, I'd year services and meals, provided along partners to needs, Casey's our that $X equipment, disaster like and and supplier offer team make with to a and and generous school members, veterans These our possible. huge helping guests families. non-profit their you of this supplier and dollars million

We many are good do so to much proud across so communities.

by launched enhanced refreshed we to they our X.X their Casey's loyal a May, includes Rewards program good bringing early Rewards. for design for ever them in that's The it to easier rewards much more that redeem good, of Speaking shopping and an see money track members save how million than Casey's Casey's upgrade with makes experience to app our rewards Rewards members. points,

filling to most anniversary receive program cash choose help their and rewards. it's when what guests to forward family three-year The and off what participation. about or the program the Whether continuing membership We works to them. members night, look loyalty love grow to extra have recently best to Casey's waiting our vehicle, is pay cents decide for and flexibility pizza its for celebrated the

past prepared year $XX.XX year. X.X%, XX% two-year were sales a of XX.X% respectively. stack Inside With ’XX of a $XXX year. an for $XXX basis same-store fiscal merchandise. was in Fiscal increase dispense year. with finishing Now as income XX% on the and results a net general at well beverage, same-store The EBITDA, record also EPS let's generated discuss X.X% diluted up as X.X% from share, both or and from in the in food results up increase and company strong million grocery million prior sales a the record the prior up and

Margins accomplishment alcoholic beverages our were merchandise very we as still partners our slices our increases manage guests. were saw with across Pizza flat tremendous value while virtually commodities, results the proposition and cost year-over-year, We and for board. a holding tremendous strong.

Breakfast We a a Pizza that also made Light, Cheese, of products sales. on positive with had Busch lot impact Beer like fun innovative

gross total averaging up was Fuel gallons over margin course the (ph) gallon and of fuel year. X% profit a with sold, the fuel up per XX% [$X.XXX]

cost team Our fuel during margins margin. volume two the dollars for job macro and favorable do declines excellent continues balancing The to with an environment was fuel by fuel profit year. maximizing wholesale significant especially gross fuel

managing terms great a of year had also We costs. in

better Guest members freeing simplification is reduction were by of store a operating been excluding our of labor They've up which our still at effective labor card guests. testament scores X.X%, unproductive and more a and expenses, X.X%. store leadership only hours fees, to teams. improved, impacted satisfaction up our hours, Same-store favorably serve expensive same-store to credit team which enables

During growth. annual both and met our job grow to well XX as permitting, challenges in more, stores fiscal to as ability We with acquired tremendous construction materials organically the growth and equipment did which new delays with targets we unit M&A. via three-year supply-chain disruptions. business XX demonstrates and We a our despite built and due also year, our

synergy new units new XXX our integrating successfully fiscal targets those meeting are from the XXXX stores. and are from We

to development, units. be wouldn't financing store will costs We're buy base. to build in and integration believe our this continue potential real of consolidation grow We the number working in store of teams industry, reducing are rising estate, our and without the occur while new continue buyers. possible to to confident seamlessly our ability extremely All

products, guests. with offer both continues private-label our and ended are has we and provide be we to unique a value program general SKUs We profit. year currently and the and of to over in value in that results Our tremendous of grocery a proposition popular business all guests is cycle and to for the in gross ability believe quality guests. penetration the Casey's model parts X% merchandise record-breaking fiscal is category XXX private-label resilient These our our reminder that our financial which strong above units economic

now I'd to ‘XX. Steve? over to fiscal -- discuss the call Steve to fourth the turn for outlook like quarter our call and

morning. Darren, you, and Thank good

like members. plan, jump I'd been of would the also for acknowledge Casey's to work financials, hard significant our I the the entire Before of and the into team year, the entire financial three-year the excellent and to all possible have team not dedication the organization, the it our accomplishments without strategic for quarter, results and

of year to average sales quarter for margin XX.X%. the over $X.X from the inside with billion X.X% Total prior rose an

dispensed increase and by to by is prepared an merchandise quarter, of food to and million and sales X.X%. sales increase total $XXX $XX total beverage million, general For grocery X.X%, million of increased $XX the rose an million, $XXX which

were private-label was as categories we and also Energy strong year this same outperformed. experienced the in grocery category. in a sales Same-store up Ongoing drinks of beverages, grab-and-go and margin XX% beverages period X.X% merchandise a the particularly mix the and assisted general basis Sales these ago. in exceptionally increase were driving XX average non-alcoholic an single-serve up quarter. XX%, alcoholic our well and shift sold points favorable over non-alcoholic growth items from

down The sales prepared for roughly and points. points year per year the this well margin affected XX as XX.X%, the up point were hot Margin ago. while was to as from basis Same-store basis had quarter XX margin. charge by than pressure LIFO we And year, were had did impact the in in and prior basis prior quarter. some down quarter. experience dispensed $X.XX, performed costs was higher benefit $X.XX food XX a for which well approximately average an an adversely cost from cheese X.X% bakery proteins, food a pound beverage Bakery, of the

year. During the per with cents fourth were flat widely Fuel sold down gallon, per last same-store gallon, fuel quarter, cents of margin the gallons varied in quarter. margins period a same XX.X X.X compared to approximately the fuel

in For cents low-XXs a April, example, to a cents February were gallon. March, both experienced per XX closer in we gallon CPGs but and

the in gallon. XX% was XXX offset the fuel $XXX relevant X.X% fourth in flat OPIS to Our price sold total last primarily sales Retail were due to retail sales This basis $XXX year points. decrease geographic a over from down a million increase by $X.XX same-store million. gallons our by quarter, to $X.XX in average partially outperformed an data

expenses increase a of related to than operating X% the more year operations. was is X.X% same-store due XX to X.X% million in Approximately were quarter, Total approximately of to the fourth up the stores $XX operating ago. increase

the the strong to related performance. increase an for financial accrued to variable of in change is due Finally, incentive approximately compensation X% costs

due million company to the Same-store in a balances. in a rising rate reduction This employee up also reduction aided cash of X.X% employee on was stores Depreciation a reduction that's The in $XX.X large interest increase was million in as same-store prior late our we Net hours. and expense lower the the retail credit by the year. quarter, modestly versus service expense from prices flat card fuel. the offset in was in $X fees, $X.X quarter wage as number interest was labor of million rates down put in quarter. was benefited by

for the decrease and that our The year. rate $XX.X was income the of benefit as XX% that's The quarter to quarter compared in a year prior adjusting enacted drop by driven a for year. prior corporate the prior one-time Net of debt floating-rate. primarily tax essentially deferred the down effective flat is And with was tax XX.X% of and a X%, the for to versus State prior $XXX the year our in from the by only EBITDA slightly was was million was reminder, Nebraska. XX.X%, a liabilities rate increase million,

million outcome $XXX unsecured revolving includes and the what of as five-year quarter, quarter, to of $XXX that and During our maturity. term line speaks challenging during a a It's credit, facility $X.X which of strength banking a have and was for facility, an Casey's credit we loan million the balance an the of each our that billion risk sheet. with refinanced credit the quality an to environment in excellent us a

capacity on the and $XXX coming have At equivalents $X.X XXXX. and due in have cash in now ample billion. maturities lines on-hand April significant until million borrowing we cash credit, existing an XXth, we our had $XXX million Furthermore, of we refinancing, with fiscal liquidity of undrawn additional us giving recent no

in with good and Our to capacity EBITDA, they leverage as is to X.X as investments times our calculated Senior have Notes ratio make themselves. we ample present accordance continue strategic

purchases of free the activities operating net company and cash resulted $XXX million the million $XX by cash million, flow. of quarter, in For in $XXX generated less property equipment generating of

construction We and to our capital see vehicles into fiscal continue to some planned of deferring elongated delays spend of remain thus delivery ‘XX. in the time

$X.XX meeting, that's June the consecutive Board been XXth XX% dividend per a to has voted increased. of the increase dividend that the the and marking share quarter of per increase, year the At Directors

EBITDA allocation our driving going We of opportunities with will us. forward ROIC growth focusing accretive remain continue capital on to front investment in in balanced

following The increase the X% to ‘XX. inside expects providing company XXXX expect fiscal outlook. X%. fiscal sales same-store performance following the currently during to Casey's is We

XX%. to company We expect margin approximately gallons XX% negative between X% sold same-store fuel X%. to to inside The expects be improvement to positive

to operating increase inclusive XXX expenses ’XX. stores adding to are and X% in X% Total expected of fiscal that's approximately

operating this FY reminder, non-recurring a benefits interest from a be As million. approximately ‘XX $XX regarding Net of legal expense is expected settlement. to expense is inclusive

expected XX% and is to to of $XXX to to The year. $XXX is be be million the tax million. for expected and million Depreciation amortization expected property approximately equipment purchase approximately is approximately $XXX to and the be XX% rate

in we're fiscal past would CPG along a margin Consistent fuel, prices guiding fuel practice, not mid-XXs, year-over-year. compared providing for in flat retail result the a with calibration EPS or of nor to flat EBITDA EBITDA. our figures are ‘XX to with But we modeling purposes,

in guidance; of margin is as low-end of quarter consistent near in sales same-store fiscal achieving our with ‘XX experience CPG was ‘XX the the first to-date sold currently are fiscal follows: are XXs. for midpoint XXs, Our we're gallons the low May Inside low outlook: our same-store however, fuel the

the turn back to over call I now to would like Darren.

of results Thanks, hard congratulations another record and The Steve. delivering team plan. say we be their a capacity reflection work speak the for again I'd and while experience, entire XXXX, like thank investing in are for the dedication year. January themselves plan team strategic the to and you to our of guest all of Casey’s the a In to executing reinvent our where three-year laid through to guest create out efficiencies, talent. is the

As like our to renewal, this I'd plan accomplishments. now for some is ready of share

million it Our experience through navigate but global therein, the and in labor situation an team a did and made with through commitment to helped drive can pandemic high-end same-store you X.X of that We effects program. rewards were guidance. the our restricted shined our several inflationary with to as of results, at results. see this and the over May our environment. in as really inside traffic, sales And adapted had shortages XXXX. we a engagement guest thrived in and enhance to We members including our with We we the reinvented brand digital drive just our ways, Casey's

that members stores same-store work X% efficiencies ‘XX we while wanted grew. engaged to to over The for to team in us, reducing guests invest make the we We capacity satisfied. exceptionally keeping in and fiscal worked harder by create hard culminating business make by the while capturing team in labor hours sure

CAGR As CAGR our than operating in lower results shown XX% financial too XX%. EBITDA is was the expense of our of

high guest plan to an We unit we ‘XX new more the period with We units two-pronged our were three-year from expectation the as new accelerate also acquisition. than approach ‘XX we we be own made with with accelerated of in or fiscal over our XXX growth. that the the remain through standard exceeded M&A a our into we build commitment to came but to bought, to would We environment where a changed, units XX% and is new XXX our growth made bold via flexible of able stores. commitment ending

As being performed shown Casey's Casey's. to talent through deliver our environment. enhanced well by well you which challenging making especially future strategic our exceptionally value tremendous investments in can to positioned plan, macroeconomic has made commitment This with see, technology. we're business possible at our is a in resiliency and to was all shareholders has the our

supply three-years our lower record countless to at in procurement company. a us helped the fuel help M&A margin volume growth, chain organization, operations make of standalone drove centralized challenges, the most investment Our balance history of fuel allowed centralized stocked successful other the team in and these keep shelves some costs, despite last and teams within the

was all higher did billion, from capital this flow $X.X and our expenditures of of of generated operations $X.X approximately We which considerably cash approximately billion. than

plan in to our plans excited share beyond, we reflect in business three-year ’XX and June value as New to grow deliver lay and our and we our We're Casey's to to strategic strategic Day host continue to shareholders. the Investor York. our As out our on plan We'll succeed our on ability last macro-economic I'm condition. next in fiscal XXth thrilled any

amazing came advisor, Lynn of for the been me Finally, on the Directors, Their all thank I I'd from the helped decade tenures. to their as to resource success Lynn in great XXXX. and wish over Diane, their to guidance also the Casey's into September. a I mentor Diane like and being Board contributions Board fuel and Board the retirement since Chair in has invaluable Horak summer Lynn best Casey's Bridgewater during and last growth an company plus. their

We questions. now will take your

Credit comes question Karen first Short The Instructions] Suisse. with from [Operator

open. is Your line

grocery your parse prepared and, wanted on guidance with very I prepared just continues a margins. food out versus could Obviously seeing on you you year. and also to respect little to to know, out pressured? wanted I -- forward parse a good in-store June. to in thanks to the look bit just you Maybe congratulations on food Hi, the more side. side much, be

kind then branded And quick through on thinking know, then actual the And of, about little what grocery? components, food have both commodity price you I one those pass-through and/or I prepared talk cost And pressures? bit a of more on within then you're, the guess increases -- question.

experienced for Yes, we is some fill you. recovery of Yes, think the and Darren, go thank ahead Karen, in see Yes, Steve in of bit see margin and and a let expect foods I'll in a overall inside this would you detail. start we example, favorability to that's we an big some that primarily costs and and to prepared over last inflationary couple pressure We're as year a the beverage which and half experiencing cheese settle currently our prepared food a a we've of margin. know as that reasons. on to expecting down input the dispensed bit. and is We're

that to So we expect the improve throughout year. to continue

of some we and There On experiencing of side, candy, merch some subside. started there inflation. the moderation categories to and that chips has outside there. see general grocery some some still inflation been is that, But where we're like

remain diligent cautious And value And whipsaw a in we side, relative because guest commodity don't so appropriate. proposition. be we we'll to side, the we're we'll want passing little a want that pricing the still maintain make food on terms of that's -- on sure prepared we on more to effort and on the

Steve, any to that? color

Yes.

and XX% year-over-year for for or both that's current modeling requirements. about on at at of get our down come there. ‘XX I so first for preponderance the inside the we'll XX% about looking would year-over-year, and reasons prices, prepared margin and from for so side the Just I some And we're we're of least cheese purposes, Darren's grocery tailwind now those kind fiscal hedged cheese flattish quarter right Karen the GM the advise point probably will all think food you that improvement to -- wise

increases first donuts had year, lapping price fiscal we've year and ‘XX. category that XX% of was lap We'll some significant for this inflation also the be we'll the this in part example, during bakery

mechanically the to of going foods. improvement most is So be prepared

is, my Okay. question you're And obviously managing then OpEx extremely second well. growth

your being comparisons wondering stores, in to the you're the guess, significant theme just that One meet that need hours at rural not to say I'd perspective. of labor you of of rural to where needs terms about a had the that actually I for guests’ I'm number of how think operators. whether of a more labor terms from you in And or able to be more add because and even stores, more seems to

Karen. Yes,

think store or unproductive we anymore. or we We need the and stores depends upstream I move where efficiently, to the for you we always we our stores needs in occur can add more identify it us, that believe labor to hours the whether starting. doing guests' And stores were what it is activities of on pull out activity we it labor like had do some that able meet that had take-away largely stores and just could and in we the labor we continue you're in staffing that. But were were didn't felt rather we the some appropriately where to to

and but while guest and freed they given to some hours the not up so, number to unproductive to improved, And over fact, those satisfaction some more overall so the to a as hours And focus them only back we've able exactly as through we've on done would a scores it store, take actually reduce that effort we in those that, of can the year taken the also that. experience. bank, last We've on of we've do we've measure we concerted been those hours because our third-party have out. call the been of

have in continue again So our year, we're continuous to at And still very stores efficiently. we who more pursue with comfortable this improvement fiscal our finding team for to to place going we more opportunities feel where are next operate now.

Instructions] Fargo. next with question [Operator The Wells Anthony comes from Bonadio

Your line is open.

Yes, guys. morning, hey. Good

got despite a you're lapping about flattish wanted optically guiding and would guidance, to your assume just why same-store demand you're gallon easy a loyalty assumptions some on program. looks there Can plus just maybe compare gallon the So what what of growth, gas constructive? you ask you've talk and not you're like pretty higher about year prices, to a I elasticity the last more

I bit -- year Yes, right on of prices and Anthony. there's quarter bit gallon, at over with got $X gas a lot bit destruction are you're look things normalized, going but we mean, off there, spiked in fell if a a you and more little a the guidance, Well, been choppy. world, the just it's was there then right, the when last gallon little now demand first a

headwinds softness. think go an into relevant our outperformed a in do obviously, to we're we could on conservative. early gallons and ourselves we tell. to the little we the that benchmarks some well, year, that the same economy about we've that too given be grow also some At could guidance are the time, It's on and macroeconomic trying have we appropriately we that go room going a because into changes impact to think of there's to some so this fact gallons recession lot to We've see in pragmatic geography, As bit gallons have just negative. somewhat grow if as potential being we our the

the So we on landed did. we that that's how guidance

a and sales as more and growth unit see disinflation you guidance on categories, the to on in continue underlying inside that from forecast? some thinking how same-store about And growth can price just contributions X% now to components it. dig we within X% Got specifically and of that the then in you're little deflation

little for expecting see the and a to what softer merchandise on and probably the grocery simply food prepared the on dispensed general we're store, the growth bit beverage, because cycling. Yes, inside of good we're of side, still

a comp. on XX% over up two-year been we've So

this aggressive prepared from took the We're lot cycling a really costs. we're in that a in particularly year last the price pricing we of inflation, not expecting costs. year foods, third row a commodity side cover on So be would lot to

to economy guests, tighten. especially maintain to a value proposition more the trying we're starts for so as our of And relevant

course. impact look moderate. that summer we're this when like And some going from and in and price with of from the a expecting inflation that but we're side, little to seeing to particular, categories, price-competitive some inflationary alcohol kind also category at in some reductions said, On temporary And beer some see still normal and the that's be I the are tobacco grocery we more we merch just in seeing manufacturers. general we're fact,

So that could be actually a deflationary. little bit

Instructions] [Operator Bienvenu Ben comes question next The with from Stephens.

line is open. Your now

thanks Hey, very Good everybody. morning, much.

morning. Good

I wanted the assumption? agents for to growth, of XXX a little the And units ask the talk then about all on Is growth augmenting you're there? you that phasing pipeline unit that lines, first year. and I citing the that you have along the that unit inorganic those kind the organic within -- could guess bit the visibility of to

Yes. in a we this can world. for M&A at that, model of and Ben think now, said unit M&A. beginning as of that's organic of the year, happen the out units year, the And lot growth we even XXX kind months XX it having split the with between in an

leave little feel potential bit confident the we myself So that transactions on that. based could regardless we But of very that of do in could occur, I'll units, a change. XXX mix how wiggle room

more that this say equation get is feeling supply starting better a a our year, year. component about now. them We're were of chain, it's little matter than organic very just last feel bit and we good right cadence we've permitting of on pipeline We're ratable. would from the sites and to building I got standpoint, we And about identified the the better an a

side. a the throughout little So better -- about but organic cadence we of the the year on feel growth

having sellers. timing be as all On feel the side, know. to of our you lot and good those about M&A potential of tends with good we really The a lumpy we're discussions pipeline

it's we to confident able those organic get we'll be quarterly both pigeonhole and So good any to on XXX cadence. that But pipeline we're number. inorganic, to type about and of hard easily into feel definitely the

great. Okay,

that years the better guys of think Let X% last are -- over normalized growth. understanding range either about this to been guidance that revisiting agents to a getting the you the to X%, swing range? me back delivered have number expense the of that several than to there variables are what kind is the operating have external that growth, factors X% challenges contribute you or more X% When the the in much

Yes, Ben, being expenses disciplined commitment organization-wide I'd I we to is, that. operating very guess, tell thing you about have the first controlling made an and

that's And results that an effort year. of and this the I think is saw I effort as so organization-wide said, that fiscal you in past

can you terms when forward. our effort at for Having us I think So components, kind G&A essentially that, the keeping from we're expect we G&A, of, flat the moving said look of in that, year.

that's so And a in big step the direction. right

from is a store work. I've of team we lot continuous standpoint, And like have improvement that great our a mentioned before doing

equation, business. we year. to to to labor continue in the of And the to our as expect rest expect to a in previous the we be more pursue scale and to drive able our so reduction the see And same-store opportunities hours power continue year leverage this in to on efficiencies we purchasing did

you else anything want Steve, to add?

beyond wage people market. we're employee rates, obviously going and Just the other piece will around competitively to pay to continue we --

our We hour. a we're certainly so excluding it's control broadly feel source to stores And that the right And a that's we'll very now store in like around our across we're side. so competitive that's going going an Darren's point, necessarily space. in remain of our over little wage to or more efficiency rate -- managers is footprint on our market that average $XX not to rate,

turnover and saw training was in overtime success on other concerted mentioned had different reducing just we've We've I a quarter year also really reduction thing and over that good XX% made no turnover we've calls. a This hours, in and before Yes, in it effort hours. and one quarter, XX% the add Ben. past reduction our previous our around end. we the controlling in

as expect And training And hours turnover continue as we'll lower to that of overtime a some result down. of that, so we work well. to those costs and

from [Operator next Sachs. question Bonnie Herzog Our with Instructions] Goldman comes

open. Your line is

you, good thank Hi, morning.

morning. Good

that called follow-up gallons, quick fuel question negative guys in a trended you out. had which I on May,

seeing et traffic, are just instance? little drivers color And share, hoping guess key terms have cetera? pressured the you volume the for broader So consumer growth the how compare Midwest, on of you're guess I of and for the what I in industry taking been? more And I fill-outs, a guess recent from what to does the that really

On I I the with quarter. Bonnie. Yes, gallons, would fourth start guess,

the gallons flat that gallons about saw in data three-month Our by period. were down X.X% quarter were that same we the OPIS for mid-continent

flat, in would geography. that So were we're perspective, though our we even from some taking others say versus I that probably share

that gallon the of we've seen sales, really slowing of a that's volume softness with over down. diesel that's months economy softening the what is seeing kind last the fuel result happen retail few in dynamics of, the starts, construction we're and One impacting volume in

And on you're the seeing less road. so just trucks

So of diesel its XX% we down in And have low-single-digits. fuel an volume now, reduction that's impact. a our our it mix. when does saw only But

bit an Now on the increase. seeing of a side, we gasoline are

now when of seeing. quarter, So you right some the that out, but we're mix that's really out softness all it that in flat what's came the driving

helpful business. ask that's color. bit little a And Okay, to on wanted then I private-label your

in is over you is units gross that highlighted which private-label, of great. have profits what now your X% You

So congratulations.

in context average? opportunity how how hoping you us year? And that your then you're real ultimately about what be? for private-label Just -- or guidance frame there industry could your the thinking of And the position relative and to is this maybe the maybe could

any down is category on callouts key trading then maybe the where more. touch And consumer

stores? that hear beverages, context I then And and I'm your just think SNAP changes from but business on in that, your or had of your consumer in any others? the the highlighted may benefit about perspective Thanks. have impact the what curious to you

growth has bullish brand and been on phenomenal private still The very we're Yes. really, that.

saw XX%. quarter, the of is in actually our course XX% in as the dollars growth you about year, last the we private-label and just Over year. our just is over unit over growth And share profit XX% under gross XX% share mentioned,

that So has the points last really, good really feel mix had basis the from year. contribution we're grown that's about XXX period and same about

on label. So everything's in direction working right the kind of private

about that took in chip also on is have over saw really growth of the water. you a XXX But in over our past is between taken us in categories private tell frankly, and seeing quarter really success delta widened and has proposition lot the the the that The bottle increases we've national share recent the that, been value for what put points think we're probably price category good two. basis in from most fact, best, our I in chips, brands, the XX% spotlight of the brands year we chips I price would

consumers look brands. as for little get pinched, so to they're penny starting those And a private more

increase. And so saw you mix that's the why

items will add to of assortment expect year over continue the and business. into the next we the calendar course to another We that XX grow

I contributions. don't any you Steve, private-label break know have down if of

multiples label see obviously, Yes. mean, consistently standpoint. many from we of listen contribution margin private I a improvement of

for general accretive push. private items is category is in closer of if running running overall to category a in those XX% we're by certainly But category to a think I contribution nationally it to label the our varies be low-XX% us will quite profitability. lot continue on

Bobby [Operator Instructions] The Griffin Raymond comes James. with question next from

line open. Your is

should two of and EBITDA business there a or years of? fiscal is normal so period look, when benchmark we morning, the et had team my the what of I next a of you be high-level in could year Thanks wholesale, a guess guys taking to guys, industry, changes rising or you there's were you cetera. that you've wholesale guess, or of Good close the off couple prices, a in this that's question, of EBITDA big over where last a the four it's period happened three I operations clearly feel of but questions. everybody. CAGRs a of more period is falls first of been for a years, or lot kind benchmark of COVID,

Bobby, over we've at fall cycles. and Well, a context economic of a tricky certain an and different I time, done that's normal a say back don't know. pretty XX% anymore, through of long sure question. the if consistently X% lot just period on I'm four last like been of what extent, I you To what CAGR grown years. historically would a that's the in we've put to EBITDA it not looks

record think how stay been we've of So is performing. if would performance track Really anchor range. anything, where type on regardless able in I the say, a to of that's I long going that to were economy of I

I period a But of to Now quarter-to-quarter time, longer a over place or fluctuate year-to-year, on. a yourself that's that safe think may anchor pretty bit.

future that best that don't guess with I I continuing so from come I kind And Bobby, Day, no, the very that's you're And I for? that. prevent see what horizon we'll talk of us on think our good feel so. Investor will anything answer to looking we the and more about do about this up can the on is but

fair. It's kind kind look that's and historical has big there when at the mean agree, I very business. fuel the that normal. the predict I such because there, have mean, of to three on it's in performance it of we tough side -- I best rolling of maybe years Yes. Yes, been just you swings

So no, that's fair.

second is private to label. my question I guess back

where the of a pretty been to there point business. a it’s has it's now the Just part performance impressive, getting meaningful

here, some as you inflation given your of had success with offerings just modest seen back compelling table are promo them Are national are how more label Just brands curious, basis? place Or kind you breaks come and the the from we've responding? guys taking come now have seeing shift and a they to price the business? that's accepting in back or inside grocery private the maybe a

moderate passing to they on Well, on that increases I think they're price I first, the to think us. started

inflation think And overall reflection is starting so of of to just I a some that subside.

conversations reflection really our great good a we the that we continuously. it major and suppliers, about And is fact this have with private Some relationships brand have has subject. with of of our mix them grown

private of label to pie. to probably we each it, ways challenge other In continue it. we the I have other some yes, they have as grow for think cases, with find the us. to didn't cases, they But In entire some success wish make continue to we

brands. label Our of isn't private national goal to reduce sales with

consumers meet Our to more for are the is needs that private in of looking goal label affordable high-quality options.

to to needs same to do of the of that And offer brand well. so sure as guests work lot we great time, at those And suppliers our those satisfying we're we make guests. with national the seek a

And That's And been for implementing business discussions. of we've our all our good numbers, as inside successful. you so joint with years. see part -- yes, been it's planning few process we have pretty the can sales that last

[Operator Instructions] The next question comes from Kelly Bania with BMO Capital Markets.

line open. is Your

Good our morning. Thanks questions. taking for

if I units in-store comps? traffic just within any versus wondering could I two color And comment mix the in-store within just inflation you on and missed if sorry the versus ticket categories? And but this, was on

that Kelly, price composition Yes, if same-store look you the from our of X.X% X.X% about were that was up at and you we if -- about in traffic. sales at of X% look of from was same-store, quarter, last inside

generating also about play the but And albeit well quarter that so dynamic little positive seeing we're traffic. in we just it bit, feel positive the good And is as out fact a that really first traffic, positive. with we're

benefit So of moderates our we're some traffic, as over pressure, and of driving towards see more that. the we the kind inflationary we cycle starting pricing as of shifted that focus to

be into your magnitude comment But this to hour for specific was was a I And reduction wondering terms outlook in year? X% about to same-store hours. labor you I more of an labor growth continue could the of reductions coming embedded if seeing that Okay. further That's a think helpful. fiscal there are OpEx X% expectation in

morning. Kelly. Good is Sure, This Steve.

same-store X% the to moment X% Our X% year-over-year reduction labor or in another for plans hours. at

that wage reduction And realized on OpEx is it, be have labor year. X% guidance. hour that offsetting to X% of is same-store baked but top then So into obviously, this that that, something a we it we'd X%

with next The Instructions] Markets. from RBC [Operator Capital Irene question Nattel comes

is line Your open.

morning, gentlemen. Thanks and good

morning. Good

morning. Good

spending are outlook. trends more the more on sort bullish marginally Just of listening cautious M&A on as it commentary, marginally your and sounds to though of you sort consumer and

wondering little if seeing you that side, a stores, in on categories initiatives your value. could the bit little the then a underway what So and trade both guess, those terms what expectations on other M&A, and, just about the down seeing And in pipeline? label I you around bit private volume behavior more you're other talk I'm in the in have for the of just valuation you're providing than

the talk consumer. ahead start I'll with to go Irene, I'll M&A. Steve let and Sure. Yes.

started things. you just couple With the we that remind of see seconds consumer that's that so three-quarters are And to soften geography. more we bit significant we living. perspective. is look of fact most behavior I'll about macro in to consumer, I cost earn bottom expensive base, some terms consumers consumer our the everybody One, think from of that a a and the at of all in the recognize economy started of ranked seven in in the our When geography our operate year. operate we of states in And over the XX -- that state is $XX,XXX a XX a

country. So our $XX,XXX than the in in further geography goes many lot others around

three-quarters the So with or backdrop, behavior. consistent for we're earning the any seeing are that consumer from shifts in that that is more, real buying pretty not in group that as group, a significant what of $XX,XXX our stores behavior

other more some affordable and label. think they're sort some of call thing. shifting also towards seeing ice year, are Reducing XX%, that that's shifts With those the that's to lottery private that of group certainly over cream candy. it, some purchases discretionary shifting like than a purchases, we earning less $XX,XXX indulgence more But novelty,

buying some may occasion where to more going a starting a they're well. also lieu see that as little meals We're our QSR in leaning freezer and into individual be to of behavior section of

of store. our seeing are that been we So positive. has a shifting traffic But around the bit again,

model. sell basic seen people. that beauties one So is the sort we the haven't of consumers not business our of suggest this We for any would And of needs behavior that shopping.

to that have things And so are have. these people

made to come. continue at this it's going been a impacted. behave And low-income that's differently. they're most really But so the been little bit They're just to consumer point,

financing that for higher in think, the with things for today M&A mixing Listen, side, remains that associated generally and that's feel I cost sure, a a at, think of bowl. a of are couple sit in good deal, quite we're thing that things us. about anybody there's I who does of that. as good we a here And just Irene, terms pipeline, And we the the on robust looking

for a, to been just financing any to sidelined the are have a potential buyers longer there's marginal bring then at bear. potentially buyers of, have don't synergies Certainly, quicker. kind of non-strategic think cost of many we're I advantage they looking where largely that processes sidelined and no

remains think the in And so a buyers lot rising sledding cetera, and business the labor it's operating of I environment for a reinvest smaller dynamics, these sellers of I potential small and no start et margins costs the and doubt general, There's historical and still that sellers. the all-time It's need us and for smaller tough which operators, remains financing potential want to is and tough. industry want pool that's in -- multiples, X% with not through working we're think generally high that the in. potential driven fuel numbers world LTM sellers to tailwind definitely for expectations. a They is still valuation that

least And so standoff at little of bit with initially a have you that.

of the think that's processes valuation at disconnects but bit, starting of little there's some a we're the with. to break there's lot a I no doubt still beginning involved

And pricing. you. please, cheese other Thank one then question, That's really around helpful. just

of year? of sort on what your locking of also XX% in You that said is you pricing? sort And pricing terms have are And at across of in. where us or you in us time-based today price? versus an we can Can three year's whether plans that this ago were where are XX% given you prorated the we tell idea months give what needs of locked

day. Well, the we watch prices every

deal this a is us, to obviously. So big

as if point first do down we higher and goes bit kind a of or I'm or then it whole us quarter. general can from to is progressively deflation two-thirds be we for fiscal in across in third in locked feel in sorry, so like quarter, XX%, year. little lock quarter it to The pretty entry a year-over-year that's so first the And the a matter, able that. It's We're there. the the attractive

first be is settles XX% the on trip XX% but in seen. still into to And be again, the where about to too, deflationary locked quarter based said I this the it as that remains quarters and think, ultimately we've would I consistent amount go probably later we're you low-double-digits,

spot change. But coming we of out entering that a the fiscal better so number than we're in were cheese much And can ‘XX. on certainly gate

with Northcoast [Operator Instructions] The Chuck comes Research. question next Cerankosky from

open. is line Your

morning, shrink can Steve, Good whether in in quarter the operating component that's and address of and concern Darren a the the year and you everyone. stores?

our a in shrink yet just so in shift business. that have is and we've point. Chuck. real not this out in where lot versus strength, our not Yes, a that I industry have say would we but know far, I talk there's in any Shrink of always stores And concern been we experienced seen our historically. the stores about at

we effect Okay. XXXX, out to as is that the -- what that continues on In is tobacco fiscal That's What profit for great. shrink margin? look category, the having gross that in volume.

kind Well, in essentially, Chuck, what volume. is experienced kind erosion perspective from of, unit we've of flat sales a mid-single-digit dollar and

to we've the pack. a maybe the pass essentially $X.XX so been covered increases $X.XX that or able And plus cost on has pricing

it's put I steady, don't bit on pressure margin but standpoint, we it grocery merch a dollar what that know actually. of does if don't the perspective, a category. from exactly I and general it from is, little Steve, does So know holding a impact rate

the and category merch in margin some We overall that. Chuck, what general on grocery is also But the expansion. seen have math we've

from our we've working I that tobacco to private overcome -- been supplier closer offset just our by tobacco. activities drag accelerating with from so that's partners label on think And able that and any pressure more margin-accretive

comes question Royall [Operator with Instructions] The from JPMorgan. John next

Your line is open.

morning. my good taking question. Thanks Hi, for

in about the low-XXs. to said like volatility. price has talk of of on the back and it from Can the been quite mid-XXs then the fuel drivers you about jumped margin low-XXs I that since volatility the going snap side April. May you XQ. talk It can end in the So think that the to And feel recent doesn't volatile Steve

Thanks. any helpful. would there So color be

course, some there's had has competitive wholesale just John, of it in decreases, cost this, Yes. set. It's that not and alone we And been just volatile. and a we're then increases

market. competitive And so the with to others in we have stay

margin to less and margin competitive sometimes And between overall pricing and cost allows that more in posture some increases situations make dynamic us than others.

historically. those the that not low-XXs, months spread little competitive there's -- then the four months I were last more is fiscal of would been extreme than low-XXs so in continued wholesale a see say would last you month-to-month three that's months, just quarter our And months unusual to in fluctuations. but May. typically, the the that, probably Two and and so we've nothing activity had we cost point I'd world those two driving it's of just in much, the are bit and

of reversible in Any capital pretty might year? Darren. Okay. I That's around or helpful. later that that XQ. color in working a then sizable in noticed any that portion you XQ Thanks, on the and And had draw be

is John, Yes. Steve. this

were from think to working I year. in we relative the prior a capital perspective where

fuel. working So just is driven capital lot the of of a to change price our be going by

So going show then a to in of the an value right, going to show inventories particular goes for payables, us wholesale that's to fuel up an go as and and direction. opposite going increase period as up up, as the right, it's increase in and it's

card timing business. our in on with it this the procure both credit of to a year, prior single impact fuel other happening nothing XX-month was have our so the was and generally, And add in the cost year in substantially units, we for period We the happened which the pay positive, There going receive the just capital be big different biggest in to the direction. same on capital change, wholesale it and working payments. working and based fuel, is we as fuel just change

units adding of pace this if working in the a on capital different year end And a have we of impact as we'll at differentiating the well. the at bunch so year very a units period prior add

next with The Krisztina Instructions] Bank. [Operator question Deutsche Katai from comes

open. is line Your

is joint and units the actions? any for and your drive seeing competitors and are to more to more like pricing? thoughts perspective, and to if price vendor then This on And within I you're taking vendors vendors your planning, your pricing that from any your -- negotiations looking indication Taylor go just accordingly? more Jessica seeing get pricing doing just for competitively wanted what morning. your you're back Are Good -- Krisztina. to looking

competitive From the price don't a we offset lever the try a particularly some they among that I the is do take have so where different to pulling board. continuing price. competitors And standpoint, would lot pull, still fuel, of levers say across not costs higher dynamic Jessica. all smaller to to see to Yes, operators they're that than

we of So seeing that. some are

From supplier on the type a depends that the the categories in perspective, in. they're and of industry supplier really it

mix the I pass they believe to seeing interesting think that we're an have ability still some of on suppliers more price.

We the of so little in year, are -- them share. looking mentioned expect year That beer aggressive over And others, this we to we from the be where I are a battling to see who more before, seeing category a certainly bit it a ago. moderated that. was like and little has be

on expecting some And so we're that off price category.

bag of a a little perspective. mixed that bit So from

or softness any a about -- I'm seeing And then is in promotions competitors? last we as your of bit wondering you a little there on lot there. you're slices pies think the and environment call, a of promotional seeing follow-up, still Are if I talked a bit from pizza how whole little just the

In well. Pizza, we've done pretty

a taken units we've category. Our have just flat perspective, in category. little slices, little have growing. to a soft significant in that bit that from pies overall, negative actually kind -- of are a Whole bit maybe but unit been But the pricing we're pretty been

to in set. -- pretty that compares our and we what pizza see competitive favorably So

they get are fairly approach a major as unit to from conservative competitors pizza see all promotional back velocity activity to taking starting We some the some try more we're on that.

we base line but priced doing like we're promotional case. in activity, competitively We the some are feel pretty

have don't to we too aggressively. So discount

low-price approach, us. seems pretty We have more an work of and to well that everyday for

turn this no for now the questions to I would call back time. show like I at Darren closing remarks. further to

members thanks Investor to and team us the on I'd taking XX. we call. you, forward delivering their Thank Day also right. And record to the All contributions to our June seeing year. join for on everybody once like time for today and again another on thank look

participating. for you call. concludes conference This today's Thank

You disconnect. may now