Key Takeaways
- In its latest quarter, Casey’s delivered standout results, including 19% EPS growth and robust same-store sales, by quietly deploying AI to optimize operations across food, fuel, and labor.
- While traditional QSRs chase flashy tech, Casey’s leverages behind-the-scenes algorithms to drive personalized promotions, efficient staffing, and dynamic fuel pricing, creating a hard-to-replicate hybrid model.
- For investors, Casey’s exemplifies how AI is transforming ordinary businesses into data-driven outperformers and offers exposure to AI’s economic impact well beyond the tech sector.
A Slice of the Ordinary
When discussions about artificial intelligence (AI) arise, they often center around tech hubs like Silicon Valley or Shenzhen, focusing on geopolitical competition between the U.S. and China. The dialogue typically revolves around GPUs, model architectures, or the latest innovations from AI labs. For instance, Oracle recently reported over $330 billion in future performance obligations in a single quarter. Yet, the story of Casey’s—a Midwestern convenience store chain and the fifth-largest pizza chain in the U.S.—offers a different perspective.
Headquartered in Ankeny, Iowa, Casey’s appears to be a traditional operator, combining gas stations, convenience retail, and a surprisingly large pizza business. For decades, its bright red signs have been a staple in small towns across the Midwest. Most customers view Casey’s as a place to refuel, grab a snack, or order a pizza. However, what remains unseen is the invisible layer of algorithms and AI-driven systems that are increasingly central to its operations.
This unique aspect of Casey’s illustrates that AI doesn’t have to be synonymous with high-tech firms; it can also transform ordinary businesses in everyday settings.
A Quarter That Demands Attention³
The company’s recent earnings report highlighted the strength of its model. Earnings per share (EPS) surged 19% year-over-year to $5.77. Net income reached $215 million, while EBITDA⁴ climbed to $414 million, both up around 20%. Inside the store, same-store sales grew 4.3%, driven by a 5.6% increase in prepared foods and beverages. Even in the competitive fuel category, volumes rose 1.7%, despite a regional market decline of roughly 3%.
Financial discipline complemented operational execution, with free cash flow of $262 million significantly exceeding the previous year’s $181 million. The balance sheet remains strong, boasting $1.4 billion in liquidity and a debt-to-EBITDA ratio of just 1.8 times. This combination of growth and financial flexibility is unexpected from a company primarily known for selling pizza in rural areas.
Algorithms in the Background
Interestingly, during the earnings call, management never mentioned “artificial intelligence.” Instead, they discussed efficiencies in labor hours, improved promotional targeting, and smarter fuel pricing. For those paying attention, these are clear indicators of AI’s influence.
Consider food preparation. Delivering pizzas on time involves logistics and forecasting, requiring coordination of kitchen activities and real-time demand adjustments. Algorithms facilitate this process, allowing Casey’s to produce fresher pizzas with minimal waste. Customers may not realize that AI is at work, but their satisfaction is a direct result.
The rewards program exemplifies this as well. With nearly 9.5 million members, Casey’s has a dataset comparable to some national restaurant chains. Understanding customer preferences enables personalized promotions, thanks to machine learning models that analyze transaction histories.
Labor optimization is another subtle yet impactful example. Management noted a decline in same-store labor hours even as traffic increased, a feat made possible by AI-enabled scheduling tools that balance staffing levels and reduce overtime. For a chain with thousands of locations, saving just a few hours per store weekly translates into significant annual savings.
A Hybrid Model
Casey’s is not merely a convenience store; it represents a hybrid business model that spans multiple verticals. It is a fuel retailer gaining market share in a declining industry, a grocer improving margins by focusing on higher-margin items, and a quick-service restaurant (QSR) competing with national chains. Increasingly, it is also a data-driven company with millions of loyalty members whose behaviors inform pricing, promotions, and inventory.
This blend fosters resilience. When cigarette sales decline, prepared foods can compensate. Fluctuating cheese prices are managed through hedging strategies and cost discipline, keeping margins steady. The diversification across categories, all supported by data-driven decision-making, allows Casey’s to thrive where single-category competitors struggle.
Competing with the Big Names
Management has made it clear that they benchmark against quick-service restaurants. With same-store growth exceeding 5% in prepared foods, Casey’s is in the same conversation as Domino’s and Pizza Hut. Sales of whole pies, the highest-margin subcategory, are accelerating, and limited-time offerings like barbecue brisket pizza have resonated with customers.
This ambition shows that Casey’s is not just a convenience store selling pizza; it is positioning itself as a serious QSR competitor. AI plays a crucial role in anticipating demand, stocking the right ingredients, and intelligently pricing promotions. The integration of acquisitions like CEFCO will further expand its footprint, with remodeled stores eventually showcasing the full Casey’s food proposition.
The Broader Lesson about AI
Casey’s serves as a case study in AI’s broader impact on the economy. The most compelling examples are often not the flashy announcements from tech companies but rather the subtle ways AI enhances everyday operations, such as staffing and fuel pricing.
The benefits of AI extend beyond chipmakers and cloud providers; they significantly impact companies that utilize AI to improve execution in less glamorous industries. This makes Casey’s a valuable example, as it illustrates how AI shapes experiences that many take for granted.
Risks and Realities
Of course, challenges exist. Integrating new acquisitions takes time, and remodeling stores involves permits, construction, and capital. Consumer spending patterns are under pressure, particularly in the cigarette category, and fuel remains a fiercely competitive commodity.
However, these challenges are precisely where AI proves most beneficial. It enhances demand forecasting, reduces waste, optimizes pricing, and ensures effective labor deployment. While AI cannot eliminate risk, it can tilt the odds in favor of companies like Casey’s, leading to meaningful performance differences over time.
The Pizza Parable
Ultimately, Casey’s exemplifies AI’s real-world impact. It shows that AI is not limited to high-tech industries; it thrives in everyday settings. It ensures timely pizza deliveries, well-stocked shelves, and fair fuel prices.
For investors, Casey’s serves as a reminder that the next wave of AI value creation may not be immediately obvious. It will emerge in unexpected places, often hidden in plain sight, within the chains that keep America fed and fueled.
So, the next time AI is mentioned, think beyond silicon chips and data centers. Consider Ankeny, Iowa, and the gas station that sells pizza. Sometimes, the clearest window into the future comes with a side of pepperoni.
As of September 10, 2025, Casey’s General Stores, Inc. was a 1.57% weight in the WisdomTree GeoAlpha Opportunities Fund (GEOA). Holdings subject to change.
By Christopher Gannatti, CFA and Samuel Rines
This article originally appeared on WisdomTree’s website and is reprinted on VettaFi | ETF Trends with permission from the author. For more information, please visit WisdomTree.com.
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¹ Source: K. Weiss & J. Reynolds, “Oracle Corporation: 1Q26 Results – Tectonic Shift in Business Model,” Morgan Stanley Research, 9/10/25.
² Source: Casey’s General Stores, Inc., “About Us — History of Casey’s,” caseys.com.
³ Source for financial and other Casey’s-specific data points in this piece unless otherwise noted: Casey’s General Stores, Inc. “Q1 2026 Earnings Call Transcript,” Bloomberg, 9/9/25.
⁴ EBITDA refers to earnings before interest, taxes, depreciation, and amortization.
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