Casey's General Stores delivers 14% net income growth and raises full-year EBITDA guidance amid robust inside sales and strategic execution.

Ladies and Gentlemen, thank you for standing by. Welcome to Casey's General Stores second quarter fiscal year 2026 earnings conference call at this time all participants are in a listen only mode. After the Speaker's presentation there will be a question and answer session and instructions will be given at that time. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Brian Johnson, Senior Vice President, Investor Relations and Business Development. Please go ahead.

Good morning and thank you for joining us to discuss the results from our second quarter ended October 31, 2025. I am Brian Johnson, Senior Vice President of Investor Relations and Business Development. With me today are Darren Rebelos, Chairman, President and Chief Executive Officer and Steve Bramledge, Chief Financial Officer. Before we begin, I'll remind you that certain statements made by us during this investor call may constitute forward looking statements within the meaning of the Private Securities Litigation Reform act of 1995. These forward looking statements include any statements relating to the potential impact of the Fikes transaction expectations for future periods, possible or assumed future results of operations, financial conditions, liquidity and related sources or needs the company's supply chain, business and integration strategies, plans and synergies, growth opportunities and performance at our stores. There are a number of known and unknown risks and uncertainties and other factors that may cause our actual results to differ materially from any future results expressed or implied by those forward looking statements including but not limited to the integration of the recent acquisitions, our ability to execute on our Strategic plan or to realize benefits from the strategic plan, the impact and duration of conflicts in oil producing regions and related governmental actions as well as other risks, uncertainties and factors which are described in our most recent Annual report on Form 10K and quarterly reports on Form 10Q as filed with the SEC and available on our website. Any forward looking statements made during this call reflect our current views as of today with respect to future events and Casey's General Stores disclaims. Any intention or obligation to update or revise forward looking statements whether as a result of new information, future events or otherwise. A reconciliation of non GAAP to GAAP financial measures referenced in this call as well as a detailed breakdown of the operating expense increase the second quarter can be found at our website at Casey's General Stores.com under the Investor Relations link. With that said, I'd like to turn the call over to Darren to discuss our second quarter results.

Darren thanks Brian and good morning everyone. Before we dive into our excellent second quarter performance, I'd like to congratulate the entire Casey's team for their hard work throughout the quarter to serve our guests and our communities. In addition, I want to highlight the positive impact Casey's is making with veterans and their families. For more than a decade, Casey's has partnered with two veteran focused nonprofits for our annual roundup campaign, Children of Fallen Patriots and Hope for the Warriors. Each year it's humbling to see the support from our guests, team members and partners at PepsiCo, and I'm proud to share that this November we raised $1.2 million for these two outstanding organizations. As a veteran myself, I'm grateful to those who stand with our military community and support them when shopping at Casey's. Now let's discuss the results from the quarter. Diluted eps finished at $5.53 per share and net income was $206 million, both of which earned increase of 14% from the prior year. The company generated $410 million in EBITDA, a 17.5% increase from the prior year. Inside the store, the prepared food and dispensed beverage category saw guests responding well to our innovation and promotional activity. Within the category we also saw margin expansion which was primarily driven by the grocery and general merchandise category. This was underpinned by increased guest traffic as effective merchandising along with solid store level execution is leading to more guests shopping our stores. Strong execution of our fuel strategy by the fuel team coupled with our robust store offer resulted in our fourth consecutive quarter of fuel gallon growth. This was accomplished while also growing cents per gallon margin. I would now like to go over our results and share some of the details in each of the categories. Inside Same store sales were up 3.3% for the second quarter or 7.5% on a two year stack basis with an average margin of 42.4%. The two year stack was an acceleration from the first quarter. Same store prepared food and dispensed beverage was quite strong as sales were up 4.8% or 10.3% on a two year stack basis with an average margin of 58.6%. Whole Pies and hot sandwiches in all day parts performed well in the quarter. Breakfast performed exceptionally well with our maple waffle breakfast sandwich highlighting the innovation our culinary team is bringing to the category. Margin was down approximately 10 basis points from the prior year as a lower margin from the SEFCO stores was nearly offset by improvement in waste and cost of goods management. Same store grocery and general merchandise sales were up 2.7% on or 6.4% on a two year stack basis with an average margin of 36%, an increase of approximately 40 basis points from the prior year, primarily due to a favorable mix shift to higher margin items such as energy drinks and nicotine alternatives within their categories. On the fuel side, same store gallons sold were up 0.8% with a fuel margin of 41.6 cents per gallon. According to OPE's fuel gallon sold data. The mid continent region saw an approximate 2% decline this quarter, so we believe we are continuing to grow market share. Fuel performance remained robust, supported by strong premium and mid grade demand, stable diesel sales, consistent pricing discipline and solid gains in fleet volumes. The organization remains mindful of effectively managing operating expenses while maintaining or improving team member engagement and guest satisfaction. In the second quarter, same store operating expense excluding credit card fees increased 4.5%, lapping a 2.3% increase in the prior year. Same store labor hours were flat even as we invested more labor hours to the kitchens appropriately to meet the strong pizza demand during the quarter. I would now like to turn the call over to Steve to discuss the financial results from the second quarter.

Steve thanks Darren and good morning. Before I begin, I also want to. Acknowledge the hard work and the great results. Results from our team members. Total revenue for the quarter was $4.51 billion, an increase of $559 million or 14.2% from the prior year due primarily to higher inside sales as well as higher fuel gallons sold part partially offset by a lower retail fuel price. Results were also favorably impacted by operating approximately 9% more stores on a year over year basis. Total inside sales for the quarter were $1.66 billion, an increase of $190 million or 13% from the prior year. For the quarter, prepared food and dispensed beverage sales rose by $50 million to $468 million, an increase of 12%, and grocery and general merchandise sales increased by $141 million to 1.19 billion, an increase of 13.4%. Retail fuel sales were up $273 million in the quarter as a 16.8% increase in fuel gallons sold was partially offset by a 4.8% decline in the average retail price. The average retail price of fuel during the period was $2.96 a gallon and that compares to $3.11 a year ago. We define gross profit as revenue less cost of goods sold, but excluding depreciation and amortization. Casey's had gross profit of 1.12 billion in the quarter, an increase of $163 million or 17% from the prior year. This is driven by both higher inside gross profit of $83.8 million or 13.5% as well as higher fuel gross profit of $65.1 million or 20.9%. Inside gross profit margin was 42.4% and that's up 20 basis points from a year ago. Prepared food and dispensed beverage margin was 58.6%, down 10 basis points from prior year. Cheese was $2.11 per pound for the quarter. That compares to $2.25 a pound last year, a decrease of 6% or an approximately 35 basis point benefit to margin. There was an approximate 100 and 30 basis point headwind from the CEFCO stores that were partially offset by improved waste accretive mix and the favorable cheese cost comparison. The grocery and general merchandise margin was 36%, an increase of 40 basis points from the prior year. The change was impacted by a favorable mix shift within the category as well as cost of goods management and that includes manufacturer funded promotional activity associated with alternative nicotine products. Fuel margin for the quarter was 41.6 cents per gallon. That's up 1.4 cents per gallon from prior year. This is inclusive of an approximately one and a half cent per gallon drag from the CEFCO stores. Other income was $40.9 million. That's an increase of 14.2 million or 53. The increase primarily was due to wholesale fuel gross profit from the Fikes acquisition, but it did also include a one time $8 million benefit which is the result of a prospective change in the way that we will administer our gift card program. Total operating expenses were up 16.7% or $101.9 million in the quarter. Approximately 10.5% of the increase is due to unit growth,. Same store employee expense accounted for approximately 2% of the increase due to increases in labor rates which were offset by flat same store labor hours. Higher variable incentive compensation contributed to approximately 1% of the increase. Net interest expense was 24.7 million in the quarter. That's up 12.1 million versus the prior year which is primarily from financing the Fikes transaction. Depreciation in the quarter was $109 million. That's up 14.6 million versus prior year primarily due to more stores. The effective tax rate for the quarter was 24.7%, nearly comparable to the prior year. Net income was up versus prior year to $206.3 million, an increase of 14%. EBITDA for the quarter was 410.1 million compared to 348.9 million a year ago and that's an increase of 17.5%. Our financial flexibility remains excellent. On October 31st we had total available liquidity of $1.4 billion. Also, our credit facility debt to EBITDA ratio was 1.7 times. For the quarter, net cash generated by operating activities of $347 million less purchases of PP&E of $171 million resulted in the company generating $176 million in free cash flow compared to $160 million in the prior year. In December, the Board of Directors voted to maintain the quarterly dividend at $0.57 per share. During the second quarter we repurchased approximately $31 million in shares and we now expect to repurchase approximately 200 million. In the fiscal year in total, up from our previous expectation of approximately 125 million. That's due to stronger earnings and higher cash flows. Consistent with our normal second quarter call practice, we are updating certain full year financial metrics. Fiscal 2026 EBITDA is now expected to increase 5015 to 17%. The company now expects inside same store sales to increase between 3 to 4% and we expect an inside margin of 41 to 42%. The tax rate is now expected to be 24 to 25%. The remainder of our annual guidance provided at the beginning of fiscal 26 remains unchanged. Our results for November were as follows. Same store volumes both inside and outside the store were consistent with our revised annual guidance expectations. Fuel CPG was in the low 40s and current cheese costs are slightly favorable versus the prior year. As a reminder, we will now have lapsed the closing of the Fikes acquisition and therefore the third quarter will have Fikes results in both periods. As such, we expect third quarter operating expense to be up mid single digits. I'd now like to turn the call back over to Darren. Thanks Steve.

Throughout the quarter we built on the momentum from the summer months and our inside comps accelerated on a two year stack basis. Whole pies are performing exceptionally well as we saw a very strong response to our thin crust Thursdays and our college football Saturday's promotions. Whole pies grew faster than the prepared foods category while the category also printed a strong margin which shows we can be creative with our promotional activity and balance margin performance. We also saw positive traffic to the stores as guests continue to believe Casey's has a strong value proposition in the forecourt. We continue to gain market share as our same store gallons growth outpaced opus data in our region. Again, our ability to drive guests to the pump with our strong inside offering remains a strategic advantage for the company. I would again like to express my gratitude to the entire Casey's team for an excellent quarter as we look to close out our three year strategic plan. I cannot ask for a better team to execute the plan and deliver industry leading results. We will now take your questions.

To ask a question, please press star 11 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 11. Again we ask that you please limit yourself to one question and one follow up. And our first question will come from Ed Kelly with Wells Fargo. Your line is now open.

Yeah, hi, good morning everyone and thank you for taking. I wanted to just start on fuel. I mean, obviously the backdrop has been challenging. You've been outperforming. Can you just maybe talk a bit. About the sustainability of that? And then Q3 is off to a good start. I mean, it seems like rack prices have helped. Do you expect margins to just kind. Of revert back in short order and. Then stepping back on all this? Has anything changed fundamentally either with your. Approach here or the competitive backdrop that we should be aware of?

Yeah. Hey, good morning, this is Steve. I'll maybe start on a couple of those. Certainly nothing has changed with our approach. Maybe start with that. I think some of the results that the team has had so much success delivering are directly related to how consistent we have been with our approach of trying to balance profitability and volume to the pad. They've done an excellent job of having consistent offer available to guests. And we firmly believe that contributes for sure to the, to the success that we've had. You know, our fly trap around our performance relative to the rest of the market begins with the store. And so the fact that the vast majority of our guests are coming to the store to go inside the store, you know, three out of four of our transactions don't involve a purchase, don't involve the purchase of fuel. Gives us a lot of stickiness with those guests. Our guests, we believe, are a little less elastic than the average guest because they're already coming to the pad for the inside the store offer. So that has certainly helped our outperformance relative to the market that we're in, you know, as it relates to. The seasonality of margins, I guess, is how I would address the question. Generally speaking, the winter for us, the third and fourth quarters, we're going to have seasonally lower margins than we do in the first half. Of the year. That's been the case for a while. We don't have any reason to expect that that would be significantly different. But beyond the recognition of what happens seasonally, we really don't prognosticate around what's going to happen with forward looking margins and beyond what the November experience has been.

And then maybe just a quick follow up on Opex up 4.5% on the. Same store basis, which is a little. Higher than maybe what we expected. Can you just maybe speak to that. Quickly and how we should be thinking about the back half?

Yeah, listen, our full year around expectations, full year expectations are unchanged. We did not change the 8 to 10% expectation for full year total OPEX. And so we are pretty much where we thought we would be exiting the first half of the year related to opex. The timing of lapping the Fikes transaction is going to naturally step down the year over year change that we'll experience in OPEX in the second half of the year. And we're trying to give some visibility into that. With the third quarter expectation of mid single digits. You know we've been, we've had a very long success run here quarter wise of reducing same store labor hours in the store. They were flat this year or this quarter. I'm sorry, that's very consistent with our expectations is eventually we were, we were going to come to the end of that multi year effort to literally drop hours to the bottom line with the promotions that we had in the store, especially the pizza promotions on Saturdays. We prudently added some labor back into the store. And so it's kind of how we ended up flat with the same store labor hours. But total OPEX very consistent with our expectation beyond what we enumerated in the press release. You know there were some miscellaneous things. Higher insurance costs, higher utility costs, legal was a little bit higher for us, advertising was a little bit higher. But by and large I think total OPEX performance very consistent with expectations.

Thank you. And the next question will come from Chuck Grom with Gordon Haskett. Your line is now open.

Hey guys, this is Ryan Bulger on for Chuck here. Thanks for taking the question and good to talk to you today. Morning. My question is going to be on the mix dynamic as you see these CEFCO stores roll into the base, the comp base next quarter. Obviously we've been talking about the impact on margins for a while, but I was just wondering if you could speak to anything you would expect to see in terms of how that would play out. With the mix differences there, traffic and ticket, et cetera, and any impact that could have on comps as they roll. Into the base next quarter. Thanks.

Yeah, Ron, this is Darren. You know, clearly the CEFCO stores are carrying a lower margin than the Casey stores, both in prepared foods and in grocery and general merchandise. And that's because there's still SEFCO stores. They're not Casey stores yet. Now, that effort in terms of rebranding will start to kick off in earnest at the beginning of the calendar year. We'll start converting their larger stores that have kitchens in them already. Those are a little bit easier from a conversion standpoint. And then we'll. Once we get those done, then we'll start to convert the other stores. So we would expect that that trajectory will change a bit on the prepared food size in particular once we get those kitchens in and rebranded to Casey's and they get our full assortment with private label and all the rest. So we expect that margin to accrete over time. But as it stands right now, their margin rate in prepared foods is about half of what what the mothership Casey's prepared foods margin is. So it is going to have an impact. I was really proud of the team this quarter in terms of managing the rest of the business, whether it's through cost of goods management, waste management. And overall execution. So that we mitigated that impact from the SEFCO stores onto the overall. Casey's portfolio.

Yeah, no, I was just curious if there'd be anything on the comp side as they roll into the comp base next quarter.

Well, as we roll through, I mean, we haven't done that math yet, but, I mean, there will certainly be an impact. When they blended in, they blended in. There was an impact to the margin. So as we cycle over that, we'll see that it should blend up a little bit, but we'll have to see. When we get there.

Okay, got it. Thank you.

Thank you. And the next question will come from Bonnie Herzog with Goldman Sachs. Your line is open.

All right, thank you. Good morning, everyone. I had a question on your guidance. You did update your EBITDA guidance for this fiscal year, which is great to see, especially considering, you know, the strong results in the first half. But your guidance does still imply a sequential deceleration in EBITDA growth in the second half. So just hoping to hear some of the drivers of that. And then, as you mentioned, you know, you lapped the Fikes acquisition in November, but, you know, is there anything else contributing, I guess, to the implied deceleration in growth. Thank you.

Yeah, hi Bonnie, good morning. This is Steve. I mean, I'll just start with that. It's obviously been a very strong first half of the year for us and that played a part in this. But as it relates to the second half specifically, we've tried to be pretty clear with people just mechanically the way the math is work. Right. We're not going to, we do not expect the same absolute level of year over year EBITDA growth in the second half that we had in the first half. Just because we already have Fikes sitting in the base now there's really no change in expectation for us from the mothership performance per se. And the Fike's performance is generally on plan as well. And so I don't. We're not trying to message any different expectation for kind of second half experience vis a vis first half experience other than mechanically the math is naturally going to come down just because we have a higher number in the prior year. Second half period.

Okay, and then maybe just a quick follow up. Just because Fike's acquisition, it's been a year. Can you just remind us, you know, your M and A strategy where you're at and sort of what the market's like right now? Obviously it's still very fragmented. Just any color there would be would be helpful in terms of what you're seeing and how actively you're potentially pursuing further M and A. Thanks.

Yeah, Bonnie, this is Darren. We're. We really haven't had any change in our strategy or our approach to M and A. As you know, we, we focus on a small deal, kind of tuck in acquisitions and that's sort of normal course. We have our dedicated M and A team that is on that full time and, and we're seeing good results from that group and very consistent with what we've expected. The larger type of MA is more opportunistic and those are fewer and further between typically. And for us, it's not just a matter of buying something for the sake of buying it. We need the right level of asset quality that we can. We'Re able to put our kitchens into those stores and really run our play. So while we do see a lot more out there than we are willing to buy because they're just not the right quality for us, there is some activity out there. We are. We are participating in some of those processes, but again, we set a fairly high bar for ourselves in terms of the asset quality. So we'll probably say no to more things than we Ever say yes to.

Thank you. And our next question will come from Bobby Griffin with Raymond James. Your line is open.

Morning, buddy. Thanks for taking the questions and congrats on a solid first half. Darius. I just wanted to maybe circle back. On the OPEX side and in particular the same store opex. And you guys, as you noted, have done incredible work on the hours basis, but maybe that's an the later innings. So when we look at like the year to date, same store OPEX of, call it averaging out around high threes, is that the right level for this business going forward with the store growth plans and kind of the expansion opportunities you have across Texas and whatnot, or do you still think there are opportunities to maybe push that down to closer to three or high twos on a same store basis?

Well, Bobby, we haven't guided beyond this year, so I'm not going to really try to forecast that right now. I would say that like I said the last couple of quarters, I think a lot of the hour reduction. Work has largely been completed. Now, having said that, that work is never done. To be clear, we have a team that's dedicated to looking at in store processes and always striving to become more efficient. But I would say at this stage, a lot of that will be fine tuning and tweaking as opposed to larger reductions in labor hours. You know, the other thing I'd remind everybody about in this quarter in particular, you know, our Traffic was up one and a half percent. Our whole pie sales were up 8% in units. And so as we grow the business on a same store basis. There'S a natural inflection point where some more labor needs to get added into the stores to meet the demand. At the same time, we've had the highest overall satisfaction scores from our guests that we've ever had in this most recent quarter. So I don't want to get overly fixated on the labor number or on the OPEX number per se. We certainly manage it and we keep it close. But I think the combination of driving traffic, delivering outsized growth in our highest margin categories and having really great overall satisfaction scores from our guests is a really winning combination and very hard to do in retail. And we're doing it right now. And so that's what we're really focused on. And when our gross profit dollar growth is growing at the pace it is, our EBITDA growth is growing at the pace it is, that's how we know we're doing it the right way. And so we're very comfortable with where we are at this point from an.

OPEX perspective, understand, very helpful. And then maybe just as my follow up on a different subject, alternate nicotine. There were some obvious manufacturer promotions during the quarter. But just curious, as you and the team have set out on the new calendar year, what are your expectations from promo activity in that category? Do you continue to expect it to be growing from a promotional basis or see higher promo potential going forward?

Yeah, not sure about the promotional activity going forward. We'll still have more work to do with the manufacturers to understand how they're thinking about that as well. What I would say though is that overall that category has been growing really fast over the last few years as volumes in combustible cigarettes go down. And so we would expect that trend will continue. As combustibles continue to erode and more people seek other nicotine alternatives for them. And right now that business is working well for us. I think we shared a couple quarters ago that we reset all of the back bars in our stores to reduce the space allocated to combustible cigarettes and increase the space available for those nicotine alternatives really to meet the guest need where they are. And that play is working well for us. We would expect that longer term trend to continue.

Thank you. And our next question will come from Chuck Sarankoski with North Coast Research. Your line is open.

Good morning everyone. Great quarter. Can you talk about the declining cost of a gallon of gasoline and your. Customers behavior in store? You said earlier that three out of. The four store visits don't include gasoline. But is there an interplay between declining cost of fuel and say more prepared. Food store visits and bigger prepared food purchases? And also how about the influence of. Lower gas prices on your in store promotions? Thank you.

Yeah, Chuck. Clearly anytime we have lower absolute fuel prices, that leaves guests with more discretionary income and dollars to spend. So we always like that scenario. But what I would say more broadly is that I think guests in general are just being a little more discerning about where they spend their money because there's a lot of other cost pressures outside of our stores that folks are dealing with right now. And so what we're seeing is people are appreciating the value proposition that they experience at Casey's. And you know, we see it in a couple of different areas. When you look at our whole pie business as an example, when we run promotions, we get great uptake on the promotions which would speak to the value. But we also see that people are trending more towards higher priced items. So specialty pizzas as opposed to single topping pizzas. So those are more expensive but they're getting the right value equation, the quality of the product and the price. Same with our bakery category where people are trading up to multi packs versus single items. Those cost more but on a per unit basis those are less. So we think that people are really picking and choosing where they're going to spend their money and where the best intersection of quality and value come together is where, where people are really spending their money. And so low fuel prices certainly help. And I think a more robust in store offer and getting that value equation right is probably the bigger driver of the results inside the store.

Thank you. Good luck in the second half. Thanks Chuck.

And our next question will come from Poran Sharma with Stevens. Your line is open.

Good morning and thanks for the question here. Maybe just wanted to peer more into cheese. Could you maybe update us on how much you have hedged? I think last quarter you said you were about 70% locked up for the year. Just wondering if there's any update to that.

Yeah. Hey, good morning, this is Steve. We continue to chip away at locking in favorable rates, favorable prices for ourselves, but the team is really doing a good job of staying on top of that and being advantageous for us. So as we sit here Today, we're about 80%, 8 0% locked for the next four quarters. So the second half of this fiscal year in the first half of what would be our fiscal. And you know, we only, we only lock something in if it's either favorable on a year over year cost basis or neutral. And so we're generally neutral or favorable on 80% of what we think we need to buy here for the next four consecutive quarters.

Great. I appreciate the color there. I guess on my follow up maybe just wanted to peer into guidance here and understand that seasonally second half does step down from first half. But just given your commentary earlier on how November is trending fuel margin wise, would it be fair to assume kind of more of a 3Q weighted split for the second half? So like maybe let's say like a 55, 45 split in 3Q and 4Q just given the favorability in fuel margins. You'Ve seen in November.

Listen, I think it would not be wise for me to go there. I think it's fair to assume that we were low 40s CPG for the month of November and we'll probably leave it at that. I think historically you can look at kind of a weighting between Q3 and Q4 and that's probably as good of A as good of a crystal ball as anybody would have around kind of how those quarters seasonally will behave. Yeah, I would just add that, you know, there's a lot that can happen in the fuel market from a commodity standpoint that that's 100% out of our control. So what happens in November is really no indicator of what could happen in January. So we kind of play that one month at a time.

Thank you. And the next question will come from Benjamin Wood with bmo. Your line is open.

Good morning guys. This is Ben on behalf of CMO and Kelly Banya. Thank you for taking our questions first. We just wanted to start with could you give us an update on what the last 12 month EBITDA contribution was from CEFCO and maybe how that came in relative to your internal plan? And then following up on kind of Bonnie's question, as we think about the the composition of new store growth over the next 12 months, is that more NTIs or acquisitions? And then can you just walk us through how you're thinking about the potential returns more recently on your your new to industry builds versus your potential acquisitions? Yeah, Ben, I'll go ahead and start with the store growth piece. I'll. Let's see. Talk about cefco, ebitda, the store growth we.

Expect always a balance between new to industry and M and A. And so typically when we set our new store goal for the year. We. Kind of go into it planning for a 5050 split. Now acquisitions can be a little bit lumpy, so we that number is usually wrong. But we go into it with that expectation and that plan and we have the ability to do that. If acquisitions run a little bit hot, then we usually throttle back the new to industry builds and get to our target. And then that allows us to land bank for the situations where maybe acquisitions slow down a little bit. Then we have the ability to flex the other way and accelerate new to industry build so we can maintain that consistent ratable growth. So that's kind of how we view store growth from a return standpoint. We're always looking to achieve that mid teens return after a few years when the stores start to mature. We have a long track record of achieving that and we're really format agnostic, meaning whether that's a new to industry or an acquisition, we still have the same return expectations either way.

Steve, Alison, what I would say on fikes is we're right where we thought we would be. So they're on plan for us. The plan is very consistent with kind of pro forma assumptions that we had at the time we bought them. LTM's a little misleading. I'm not going to go there just because if you think of the first two quarters that we own fikes a lot of deal costs there. It was kind of a wash from an EBITDA basis the second half of last fiscal year. But for this fiscal year. We said that would be EBITDA accretive. Healthy EBITDA accretion it is. Would not be EPS accretive because of the interest that is still the case. We continue to realize synergies, primarily from fuel and SGA as we sit here at this point in time. To Darren's earlier comment. The biggest group of the 45 million of synergies we're ultimately trying to get is going to come from inside the stores. And that's dependent on the timing with which we can remodel the stores. So we will certainly not fully realize synergies this fiscal year. And that was never the expectation, but right where we thought it would be. Well on our way to ultimately getting to 89, $90 million of kind of fully synergized EBITDA. But we won't see all of that this fiscal year because of the timing of remodels.

Great. Thank you. And then just as a follow up, could you give us an update on what the latest is thinking around your wing test? And then, you know, as you're thinking about timing a broader rollout, what are you guys looking for at this point? Are you still trying to refine the offering or the labor or are there calendar events like the super bowl or March Madness that might be a little bit more conducive to a broader launch?

Yeah, Ben, you know, with the wings like we talked about, we still had some menu refinements that we were working on, some procedural gaps we were trying to close. I think a lot of that work has been wrapped up where we've got some new flavor profiles that we just literally in the last week got back into the test stores and we've brought in that store base a little bit to. Make sure we've got that right. So we're. I'd say a lot of the development type work we think is largely done. We're. We're validating that as we speak. And then we would proceed to start rolling out. So we haven't really announced a timeline for that just yet, but I think that work is well underway. And so I think we're getting closer to the finish line there.

Thank you. And the next question will come From Brad Thomas with KeyBanc Capital Markets. Your line is open.

Good morning, and thanks for taking my question, and congrats on a strong quarter here. I want to first ask a big picture question about competition. This is something that comes up a lot in our conversations with investors about the growth of many of the private convenience stores. It seems like your results are clearly very insulated today. But I was wondering, Darren, if you could talk a little bit more about your confidence level in your insulation from some of that competition.

Yeah, you know, look, I think from a competitive standpoint, we have a little bit of a mixed bag, you know, and what I mean by that is, yeah, there's certainly some rural areas where we don't face a lot of the larger regional players that you're referring to. We do have some of those larger regional players that we compete with every single day in some of our larger markets. I'll just use our home market of Des Moines, Iowa, as an example. Is probably one of the most competitive convenience store markets in the country. And so we face three of those regional competitors as we speak in this market. And we perform exceptionally well here. We have that in a number of different markets. Texas in Missouri in Illinois. So I feel very comfortable in our ability to compete at the highest level with the regional players in the industry. And, you know, we have a differentiated offer. You know, they do well at what they do and we do well at what we do, and those things aren't always the same. But I think we can look market by market where we have that. That more intense competition and we do very well. There's.

That's helpful. And if I could ask a follow up on the state of the consumer. This has been unusual quarter with the government shutdown and an impact on snap. Curious if there was anything that you've seen in your business from a consumer perspective.

You know, I shared a little bit before about what we're seeing more broadly with the consumer with respect to snap. SNAP is a very low percentage of our business. It's a little bit less than 2% of our sales are SNAP eligible. So we really, you know, the government shutdown, while unfortunate, really didn't have much of an impact on our business at all that we could discern from from the numbers.

Thank you. As a reminder to ask a question, please press star 11 on your telephone. And our next question will come from Mike Montani with Evercore. Your line is now open.

Yes. Hey, good morning. Just wanted to ask if you could unpack a little bit further. Some color. Darren on State of The consumer and the K shaped economy. And in particular, I guess with guide it seems to imply about 50bps of decel for the back half of the year. Even though compares get a bit easier optically into the fourth quarter. And we thought you could have like 20 to 40 bps of tailwind from CEFCO stores getting into the comp. So just wanted to understand maybe if you could break out, you know, how the comp progressed over the quarter, a little more color about what you see in November and then just some high level commentary about that consumer.

Yeah, I guess as we saw the comp progress through the quarter. It was really, you know, that trajectory was more a reflection of the comps with recycling. So it kind of stepped down. August, September, October. But when you look at the two year stack, it really was the other way. It accelerated. So we had a very tough comp in October and we cycled that. And that was probably our lowest comp sales month of the quarter from an inside perspective. But like I said, on the two year stack basis we were about six and a half last quarter. We were seven and a half this quarter. So I feel really good about the strength of the business and the trajectory it's on. You know, from a consumer perspective. Again, I think, you know, and we, we've done some research on this. You know, there's, there's sentiment out there among consumers and then there's how they behave. And I think the broadly speaking, if you look at different income cohorts, the middle and upper income cohorts are feeling fairly good about the economy. There are some. That have a negative view, but the majority would have either a neutral or positive view of the economy. The majority in those cohorts would feel at least neutral or more financially secure. The lower income is under more pressure from both of those perspectives. But they also say that they intend to maintain their visit frequency to convenience stores. So that's encouraging for us. And again, the actual behavior we're seeing in the stores is that they're still coming as frequently as they were, as evidenced by our traffic increasing over the quarter. They're still buying, as evidenced by her same store sales performance relative to others in space. But they are being more discerning about where they spend the money and how they spend it. And I think for us with our prepared food proposition in particular, it represents a really strong value relative to other alternatives out there, particularly in the QSR space. And so we're finding more people gravitate to us because of that strong value proposition. And we continue to maintain that. So I feel very good about the spot we're in right now from a guest perspective.

We had just done a deep dive, actually, on your last point about the share gain potential for prepared meals, where you all stood out positively. And I was curious if there's anything you could add that helps to bridge us to the chicken wings in terms of LTOs or other innovations down the pipeline.

Well, we certainly think that the wings have the potential to create another occasion for the guests. And. I would expect that from a, from a quality and pricing perspective to really represent a great value proposition for the guests. And that's the feedback we're getting so far in the test market. So I would expect that to perform well when we go to a broader rollout. And again, our pizza proposition is always been there. People recognize us for that. And as they become more value conscious. They'Re gravitating more towards us. And so again, relative to comparable quality products out there, and we compete more with QSR from a quality perspective, our value is much stronger than most out there and it's resonating with guests.

Great. Thank you and good luck.

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

All right. Thank you for taking the time today to join us on the call. Before we go, I want to thank our team members once again for all their hard work this quarter. I wish them and everyone on the call and listening in a happy holiday season.

This concludes today's conference call. Thank you for participating and you may now disconnect.