Casey’s General Stores, Inc. (NASDAQ: CASY) announced a $150 million conversion program for the 198 convenience stores it acquired from Fikes Wholesale in 2024. The conversion will begin in earnest on January 1, 2026 and will remodel kitchens and upgrade equipment so that each location can offer Casey’s full prepared‑food menu.
The program is designed to lift prepared‑food and fuel margins by addressing the roughly 110‑160 basis‑point headwind that the lower‑margin CEFCO stores impose on Casey’s overall profitability. Casey’s prepared‑food margin is 58.6 percent, while the CEFCO stores’ margin is about half that figure, roughly 46 percent. Converting the stores to the Casey’s menu is expected to close the gap and improve overall inside‑store profitability.
The conversion will also help Casey’s reduce the dilution from the Fikes acquisition and accelerate the return on the $1.145 billion purchase. By bringing the CEFCO stores onto the higher‑margin Casey’s operating model, the company expects to improve its inside‑store margin and fuel margin, which have been key drivers of recent earnings growth.
Phase 1 of the program will target high‑traffic sites in Texas and Florida. Texas accounts for 148 of the 198 stores, while Florida holds the remaining 50. These markets were chosen because they offer the greatest opportunity to capture market share and improve inside sales, and because the majority of the CEFCO stores in these states already have kitchen infrastructure that can be upgraded rather than installed from scratch.
The conversion is projected to take three to four years to complete. The first phase will focus on the largest stores with existing kitchen equipment, allowing for a quicker rollout and faster margin improvement. Subsequent phases will address smaller locations and those requiring more extensive kitchen installations.
The program comes on the heels of Casey’s Q2 2026 earnings, in which the company beat earnings expectations by $0.24 per share, driven by strong prepared‑food sales and disciplined cost control. Management raised its full‑year EBITDA guidance for fiscal 2026 to a 15‑17 percent increase, reflecting confidence in the margin expansion from the conversion and the continued growth of its convenience‑store footprint.
Darren Rebelez, Casey’s Chairman, President and CEO, said the conversion “will begin in earnest at the beginning of next calendar year and will focus on the larger CEFCO stores that already have kitchens, which will be easier to convert to the Casey’s brand.” He added that the lower‑margin CEFCO stores “are carrying a lower margin than the Casey’s stores… we expect that margin to accrete over time.”
The conversion program is a strategic move that aligns with Casey’s broader goal of expanding its high‑margin prepared‑food offering and strengthening its competitive position in the convenience‑store sector. By investing $150 million in the 198 stores, Casey’s is positioning itself to capture higher‑margin sales, improve operational efficiency, and accelerate the return on its recent acquisition, all of which are expected to support long‑term shareholder value.
The announcement underscores Casey’s commitment to margin expansion and operational excellence, and signals that the company is actively working to integrate its newly acquired assets and unlock their full potential.
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