Casey's General Stores: EBITDA Growth, CEFCO Impact and Leverage

A decisive FY2025 inflection: growth with a higher leverage trade-off#

Casey's reported $15.94B in revenue for FY2025 (+7.27% vs FY2024) while EBITDA expanded to $1.20B, lifting EBITDA margin to 7.53% — a sign that the company’s prepared‑foods and store-conversion playbook is producing scalable results. At the same time, the acquisition cadence that drove that scale materially changed the balance sheet: net debt rose to $2.63B (from $1.43B in FY2024) after roughly $1.24B of acquisition cash outflows, leaving Casey’s operating profile stronger but more leveraged heading into FY2026. These are the twin themes driving investor interest and near-term scrutiny: margin and revenue momentum on one hand, and acquisition-driven leverage and integration costs on the other.

The revenue, profitability and cash‑flow figures referenced here are drawn from Casey’s fiscal year results and filings for the period ending April 30, 2025 Casey's Investor Relations — Q4 and Fiscal Year Results. The company also disclosed acquisition activity and integration guidance associated with the CEFCO (Fikes Wholesale) transaction in its investor materials and press releases Business Wire — Casey's Agreement to Acquire 198 CEFCO Stores.

Financial performance: growth, margins and what the math says#

At the top line, Casey's posted $15.94B of revenue in FY2025 versus $14.86B in FY2024, a YoY increase of +7.27%. That top-line expansion translated into higher absolute profit: net income increased to $546.52M (from $501.97M), an increase of +8.88%, and operating income reached $796.4M. The company’s cost structure and product mix improvement show through the margin progression: gross margin rose to 23.54%, operating margin to 5.00%, and net margin to 3.43% for FY2025. Those margin calculations are direct ratios of the fiscal year line items reported in Casey’s FY2025 financial statements Casey's Investor Relations — Q4 and Fiscal Year Results.

EBITDA of $1.20B produced an EBITDA margin of 7.53%, a clear step-up from prior years that reflects both scale in high‑margin inside sales (prepared foods and dispensed beverages) and early synergies from recent footprint additions. Free cash flow also expanded meaningfully to $584.63M in FY2025, an increase of +57.60% versus FY2024, driven by stronger operating cash conversion and steady depreciation add-backs even as capital spending remained elevated. The company’s free cash flow growth is visible in the cash flow statement items for FY2025 and FY2024 Casey's Investor Relations — Q4 and Fiscal Year Results.

Income statement summary (FY2022–FY2025)#

All figures above are taken from Casey’s fiscal filings for the years shown and the margins are calculated as the ratio of the relevant line items to revenue for each fiscal year Casey's Investor Relations — Q4 and Fiscal Year Results.

The notable trend is consistent margin improvement over the last three fiscal years, driven by inside-sales growth and operating leverage. Gross margin expanded by roughly 220 basis points between FY2023 and FY2025, and operating margin improved as the company scaled higher‑margin prepared foods across a larger footprint.

Balance sheet and cash flow: acquisition-fueled growth and leverage metrics#

Casey’s balance sheet shows the trade-off implicit in an M&A-led expansion. Total assets increased to $8.44B in FY2025 from $6.35B in FY2024, and total liabilities rose to $4.93B from $3.33B, largely reflecting recognition of acquisition- and debt-financing activity. Total debt finished FY2025 at $2.96B with net debt of $2.63B, up from total debt of $1.64B and net debt of $1.43B the prior year as the company used cash and new debt to fund acquisitions and conversions Casey's Investor Relations — Q4 and Fiscal Year Results.

Key solvency and leverage ratios underline the change in capital structure. Using FY2025 reported figures, the current ratio is 0.92x (total current assets $1.01B / total current liabilities $1.10B). Total debt to equity is 0.84x (total debt $2.96B / total stockholders’ equity $3.51B). Net debt to EBITDA is 2.19x (net debt $2.63B / EBITDA $1.20B), and total debt to EBITDA is 2.47x. These are direct calculations from Casey’s balance sheet and income statement items and highlight that leverage increased materially during FY2025 while still staying within a mid‑single‑digit EBITDA‑coverage profile that many retail acquirers target.

Balance sheet & cash flow snapshot (FY2022–FY2025)#

Source: Casey’s fiscal statements (balance sheet and cash-flow sections) with free cash flow and acquisition cash flows taken from the company’s FY2025 cash-flow disclosures Casey's Investor Relations — Q4 and Fiscal Year Results.

The cash-flow table shows two important dynamics: (1) Casey’s continues to convert earnings into cash at a rising rate, enabling higher free cash flow despite large capex outlays, and (2) acquisitions were the dominant cash-usage item in FY2025, at roughly -$1.24B, which explains most of the net debt increase.

Strategy in action: CEFCO acquisition, prepared foods and store growth#

The operating strategy driving FY2025 results is straightforward: expand store count aggressively and convert acquired stores to Casey’s higher‑margin prepared‑foods model. Casey’s closed on the CEFCO deal — roughly 198 stores — and accelerated its multi‑year store build plan, adding about 270 stores in FY2025 through a mix of conversions, acquisitions and new builds. Management’s public commentary and investor materials describe a plan to add roughly 500 net new locations by the end of FY2026, with a three‑year mix of organic development and smaller bolt-on deals to maintain discipline while scaling density in target regions NACS (Convenience.org) — Casey's acquires CEFCO announcement.

Prepared foods is the company’s margin engine. Company disclosures and industry coverage show inside categories such as pizza, hot sandwiches and bakery items deliver much higher gross margins than fuel or commodity items. That product-mix shift is visible in Casey’s gross- and operating‑margin expansion and in rising inside‑same‑store sales trends reported through FY2025. Management has stated that converting acquired stores to Casey’s kitchen and merchandising standards is the primary pathway to capture both higher per‑store sales and the profitability uplift that follows CStore Dive — Casey's foodservice thriving.

The integration math is explicit in the company’s disclosures: acquisition and conversion costs are front‑loaded (management disclosed roughly $4M in one‑time costs in Q4 FY2025 with an expectation of additional integration expenses), while synergies and revenue lift are realized over 12–24 months as kitchens roll out and merchandising changes produce a higher product-mix. Casey’s estimates approximately $45M in annual run‑rate synergies from the CEFCO integration once conversions are complete, a figure that is directional but quantitatively meaningful relative to current EBITDA.

Competitive dynamics: moat, scale and where Casey’s sits in the market#

Casey’s competitive advantage is not national scale in fuel or convenience per se; it is the combination of a differentiated prepared‑foods program, distribution capability for company stores and converted acquisitions, and a strong foothold in smaller communities and suburban trade areas. That positioning gives Casey’s durable pricing power and repeat patronage benefits in markets where larger players may not focus on foodservice execution at the local level. The company’s loyalty program — more than nine million members per public reporting — amplifies the monetization of foodservice and supports higher average ticket sizes and frequency.

Against national banners and regional chains, Casey’s strategy is selective expansion rather than a costly national footprint race. The CEFCO deal is a case in point: it buys density in Texas and the Southeast that enables distribution and marketing efficiencies, rather than forcing Casey’s into unfamiliar geographies where the economics are unproven. Industry observers and trade press coverage generally frame the move as consistent with Casey’s longer-term playbook of targeted M&A plus rapid conversion to Casey’s food model Business Wire — CEFCO acquisition.

Quality of earnings: cash conversion and recurring leverage#

A critical test of the quality of Casey’s earnings is whether reported net income growth is matched by sustainable cash flow. FY2025 answers that question in the affirmative: operating cash flow was $1.09B, and free cash flow came in at $584.63M, evidence of strong cash conversion even after substantial capex. The company’s free cash flow margin (free cash flow / revenue) for FY2025 is approximately 3.67%, and free cash flow per share TTM (reported in company metrics) aligns with that stronger conversion profile.

That said, acquisitions are a recurring capital drain until synergies and margin lift fully materialize. FY2025’s -$1.24B of acquisition cash outflows indicates that some of FY2025’s growth is inorganic and dependent on integration execution. The market will therefore watch the cadence of synergies and inside‑sales lift in converted stores to validate that the acquisition spending yields sustained incremental EBITDA rather than temporary revenue growth.

Forward signal: consensus estimates and valuation context#

Analyst consensus embedded in the provided dataset points to continued EPS growth through FY2026–FY2029, with forward EPS estimates rising from roughly $13.95 for FY2025 to $20.78 by FY2029 in the aggregated estimates. Forward valuation multiples compress modestly in those estimates, with forward EV/EBITDA moving from ~18.96x in 2025 to ~14.73x by 2029, reflecting expected EBITDA expansion and a normalization of integration costs. Current market quotes list the stock price around $501.77 with reported EPS in quote data at 14.64 and a trailing PE of 34.27x as of the timestamp in the quote [NASDAQ quote data for CASY].

These consensus numbers imply an expectation that organic prepared‑foods lift plus the CEFCO conversion will drive margin accretion over a multi‑year horizon. The forward EV/EBITDA and forward PE trajectories in analyst models reflect that expectation, and they assume execution on store conversions and the realization of the roughly $45M of projected annual synergies associated with CEFCO.

Risks and execution watch‑list#

Execution risk is the dominant near‑term hazard. The CEFCO integration requires re‑kitting stores, retraining teams, and migrating merchandising and supply‑chain processes; missteps or slower-than-expected conversion curves would delay synergy realization and keep margin pressure in place longer. Financing and leverage are a secondary risk: net debt rose to $2.63B and net debt/EBITDA sits at 2.19x, creating less cushion for additional big transactions or cyclical shocks relative to a lower-leverage profile.

Market‑level risks include commodity and labor inflation, which would compress margins if Casey’s cannot pass costs through or offset them with higher‑margin inside sales. Competitive responses from national banners or regional operators — particularly on price and foodservice innovation — could mellow some of Casey’s share gains in targeted regions. Finally, a slowdown in same‑store inside sales growth would undermine the primary margin lever Casey’s is using to convert expanded footprint into higher consolidated profitability.

What This Means For Investors#

Casey’s FY2025 shows a company executing a clear strategic playbook: use M&A and organic openings to add density, convert acquired stores to a higher‑margin prepared‑foods model, and harvest operating leverage as inside sales scale. The payoff is visible in revenue growth of +7.27%, EBITDA expansion to $1.20B, and free cash flow growth of +57.60% year over year. The tradeoff is a step‑up in leverage: net debt increased to $2.63B, and acquisition cash flows were a major use of capital in FY2025.

The near‑term investor lens should therefore bifurcate into two tracks: measure execution against integration milestones and inside same‑store sales trends, and monitor leverage metrics and cash‑flow after acquisitions. If Casey’s hits its conversion cadence and extracts the announced synergies, the incremental EBITDA should validate the higher leverage. If conversions lag, margin compression and slower free‑cash‑flow recovery would raise questions about the pace and scale of future acquisitions.

Key takeaways#

Casey’s delivered scale and margin improvement in FY2025 while materially increasing leverage to fund expansion. The company’s core advantage — a high‑margin prepared‑foods engine paired with a targeted expansion strategy — is validated by improving margins and cash generation, but these gains come with execution risk tied to the CEFCO integration and the larger M&A program. Investors should watch inside same‑store sales for prepared foods, the realization of the ~$45M synergy target, and quarterly cadence in net debt reduction or stabilization as the first signals that the strategy is converting into sustainable EBITDA growth.

Conclusion#

FY2025 is a telling year for [CASY]. The numbers show a company that can grow revenue and margins while turning earnings into cash, but they also show a company that now carries a higher debt load to buy the scale that makes the strategy work. The story is neither outright triumph nor clear failure: it is a conditional outcome that depends on integration execution and the timing of synergy realization. For stakeholders, the immediate imperative is surveillance: quarterly proof that converted stores deliver persistent inside-sales lift and that free cash flow begins to outpace acquisition cash use, returning the balance sheet to a steadier posture as FY2026 unfolds.

All financial figures and corporate events referenced in this article are drawn from Casey’s fiscal disclosures and public press releases, including FY2025 filings and the company’s announcements regarding the CEFCO acquisition Casey's Investor Relations — Q4 and Fiscal Year Results and the public release on the CEFCO transaction Business Wire — Casey's Agreement to Acquire 198 CEFCO Stores. This report refrains from investment recommendations and focuses on the material financial and strategic facts that will drive Casey’s near-term trajectory.