Chuck Cerankosky

Darren said nicotine alternatives, up 47%, are replacing declining combustible cigarettes; Casey's reset backbars early to add space and expects to lead the category, with double the margin of cigarettes.

Steve said the 41 are permanently divested (including Mississippi Fikes stores), with about $42 million of monetization.

Darren said low fuel prices help but guests are being discerning. Seeing trade-up to specialty pizzas and bakery multipacks, showing guests choosing where quality-value intersects best rather than just cheapest option.

Darren broke down 4.3% SSS: ~1.5% traffic + ~3% ticket. Ticket driven primarily by tobacco manufacturer pass-throughs and modest candy increases. More units purchased per basket in both prepared food and grocery.

Darren said no kitchen conversions assumed in FY26 due to permitting timelines. Bulk of remodeling in FY27-28. Currently assessing how existing CEFCO food program combines with Casey's pizza before developing scopes.

Darren initially said end of 2027, then corrected to end of 2026. Working with incumbent supplier on the transition. Self-distribution conversion will follow contract expiration.

No final decision yet. Test covers the broader Des Moines DMA (approximately 225 stores) including urban and rural environments. More to come.

Meisenzahl described additional identified synergies and customer growth but quantified the EPS effect only as an immaterial tailwind.

Jim noted rates, affordability, and incomes all need to work in sync. Household formation still healthy though slowing. Cited structural housing deficit and pent-up demand including multifamily.

Jim characterized spray equipment as flattish reflecting new residential pressure; Heidi called AP (applied products) a leading indicator, also flat.

Heidi noted rehab/remodel activity is more favorable than new res but not enough to offset core weakness; Al confirmed it falls under the res repaint segment.

Al said price is 4th or 5th on contractor priority list after quality, service, and knowledge; differentiated solutions help contractors make more money.

Heidi reaffirmed 80-100 stores full year; described density-based site selection algorithm; cited record low 7-9% turnover as talent strength.

Al cited 36+ months of backwards existing-home turnover creating pent-up demand from household formations; said 6-6.5% mortgage rates could unlock movement without needing 5%. Heidi emphasized partnering with builders around affordability as a differentiator.

Ron confirmed middle-income consumers now pulling back more aggressively. Consumer sentiment dropped significantly over four months. Fred Meyer performing well under Todd Kanmai despite higher GM mix exposure. David noted experimenting with store formats including 123K and 99K sq ft.

Ron said closures spread across country in 1s and 2s by division with minimal financial impact. New openings will accelerate beyond 30 in 2026+, favoring faster-growing geographies. Marketplace format highlighted as terrific.

Todd explained that capital previously allocated to digital infrastructure buildout is now redirecting to store expansion. Physical footprint and digital work hand-in-hand since most loyal customers engage in both channels. Expect acceleration beyond 2025.

Chuck asked about restaurants as meal competition and Kroger's prepared food offerings. Rodney acknowledged the huge opportunity but said they are still scratching the surface with various initiatives.

Hal said Q1 ended with anomalous split: cooler north, warming south. Into April, north weather improved and kicking in while south holding. Seasonal ramp underway with strength in garden, ag fencing, sprayers, live goods, and riding lawnmowers. Business running solidly in comp guidance range ~3.5 weeks into Q2.

Seth noted private brand apparel already fully out of China pre-tariffs. Task force assessing every program for resourcing opportunities. Significant movement expected in back half of year.

Ron gave a general response emphasizing Costco's 40-year track record with the Teamsters and commitment to fair treatment, without disclosing specific negotiation details.