Jim Cramer Notes Oil Is Behind Pressure on Casey’s (CASY) and Texas Roadhouse (TXRH)

On September 17, Mad Money host Jim Cramer praised the decision to repurchase Casey's General Stores, Inc. (CASY) after learning about it on the conference call. He suggested that the move was wise, as both CASY and Texas Roadhouse (TXRH) faced oil-related challenges. Oil directly impacts CASY's fuel business, with fuel same-store gallons falling 0.3% in fiscal first-quarter 2027, while fuel margin improved to 47.8 cents per gallon, and fuel gross profit grew 19.6% to $446.9 million.

CEO Darren Rebelez highlighted their team's ability to navigate a volatile fuel market, resulting in strong results. With fuel gallons expected to fluctuate slightly, normalization of margins could limit fuel's support for earnings growth. Despite decreased fuel margins, CASY's latest quarter showcased positive operating indicators, including a 27.7% increase in diluted EPS to $7.37, a 17.1% rise in EBITDA to $485.1 million, and a 3.2% increase in same-store sales.

On the other hand, Texas Roadhouse's results reveal margin pressure, primarily due to broader cost inflation and higher labor expenses, rather than oil-related issues. The restaurant chain experienced a 6.2% increase in comparable restaurant sales, but its margin declined by 66 basis points to 16.4% due to commodity inflation and wage inflation.

Despite the challenges, management anticipates continued growth in 2026, with sales momentum, rising weekly sales, and increased operating cash flow. Both companies have seen an uptick in hedge fund interest, with 48 hedge funds holding a stake in CASY and 49 in TXRH during the second quarter.