管理層發言
Good morning, and thank you for joining us to discuss the results from our third quarter ended January 31, 2026. I am Brian Johnson, Senior Vice President, Investor Relations and Business Development. With me today are Darren Rebelez, Chairman, President and Chief Executive Officer; and Steve Bramlage, 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, 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 10-K and quarterly reports on Form 10-Q 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 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 for the third quarter, can be found on our website at www.caseys.com under the Investor Relations link. With that said, I would now like to turn the call over to Darren to discuss our third quarter results. Darren?
Thanks, Brian, and good morning, everyone. Before we go into further detail on our outstanding third quarter performance, I'd like to praise the entire Casey's team for their hard work serving our guests. The team's high level of execution across the board is reflected in the numbers I'll share with you shortly. But before I do that, I want to highlight the positive impact Casey's is making throughout our geography. Supporting the community is core to who Casey's is. And right now, we're activating our Feeding America campaign in partnership with DoorDash. The campaign will benefit over 60 local food banks in our footprint. Thank you to our guests and team members who are engaging in this campaign to combat hunger and food insecurity. Now let's discuss the results from the quarter. Diluted earnings per share finished at $3.49 per share, up 50% from the prior year. Net income was $130 million, an increase of 49% from the prior year. The company generated $309 million in EBITDA, 27.5% higher than the prior year. Inside the store, prepared food and dispensed beverages remained strong, supported by a compelling value proposition and continued innovation, such as the 2 new specialty pizzas, Twisted Pepperoni and Ultimate Meat. Margin expansion was driven primarily by grocery and general merchandise. As a result of our joint business planning process, our guests have early access to Monster's Ultra Red, White and Blue Razz flavor, celebrating 250 years of American independence. This product will be sold almost exclusively at Casey's locations up until Memorial Day weekend. In the fourth quarter, our team executed well as same-store gallons grew for the fifth consecutive quarter while fuel margin exceeded $0.40 per gallon. I'd now like to go over our results and share some of the details in each of the categories. Inside same-store sales were up 4% for the third quarter or 7.9% on a 2-year stack basis with an average margin of 42.2%. Same-store prepared food and dispensed beverage led the way, as sales were up 4.3% or 9.2% on a 2-year stack basis with an average margin of 58.3%. Continuing the momentum from the prior quarter, whole pies and hot sandwiches in all dayparts performed well during the third quarter. Same-store grocery and general merchandise sales were up 4% or 7.4% on a 2-year stack basis, with an average margin of 35.7%. Energy drinks and nicotine alternatives continue to outperform the category with double-digit growth. On the fuel side, same-store gallons sold were up 0.4% with a fuel margin of $0.41 per gallon. The Mid-Continent region saw an approximate 4% decline this quarter according to Opus fuel gallons sold data, indicating that we continue to take market share. In the third quarter, same-store operating expense, excluding credit card fees, increased 4.6%. Same-store labor hours were down slightly as the organization continues to prioritize efficiency while being mindful of guest satisfaction where scores for the fiscal year are at an all-time high. I would like to now turn the call over to Steve to discuss the financial results from the third quarter. Steve?
Thank you, Darren, and good morning. Before I begin, I also want to share my appreciation for the hard work and the great results from our team members. Total revenue for the quarter was $3.91 billion. That's an increase of $12 million or 0.3% from the prior year, primarily due to higher inside sales as well as higher fuel gallons sold that was nearly offset by a lower retail fuel price. Results were also favorably impacted by operating approximately 1% more stores on a year-over-year basis. Total inside sales for the quarter were $1.48 billion, an increase of $80 million or 5.7% from the prior year. For the quarter, prepared food and dispensed beverage sales rose by $26 million to $423 million, an increase of 6.5%. And grocery and general merchandise sales increased by $54 million to $1.06 billion, an increase of 5.4%. Retail fuel sales were down $57 million in the quarter as a 2.3% increase in fuel gallons sold was offset by a 4.6% decline in the average retail price. The average retail price during the period was $2.72 a gallon, and that compares to $2.85 a year ago. We define gross profit as revenue less cost of goods sold, excluding depreciation and amortization. Casey's had gross profit of $1.01 billion in the quarter, an increase of $94 million or 10.3% from the prior year. This is driven by both higher inside gross profit of $51 million or 8.9%, as well as higher fuel gross profit of $46.2 million or 15.3%. Inside gross profit margin was 42.2%, that is up 130 basis points from a year ago. Prepared food and dispensed beverage margin was 58.3%, and that's up 50 basis points from the prior year. Cheese was $2.05 per pound for the quarter compared to $2.12 per pound last year, that's a decrease of 3% or approximately a 20 basis point benefit to margin. Margin also benefited from improved waste, which was partially offset by promotional activity. The grocery and general merchandise margin was 35.7%. That's an increase of 150 basis points from the prior year. The change was impacted by strong cost of goods management, as well as a favorable mix shift within the category. Fuel margin for the quarter was $0.41 per gallon. That's up $0.046 per gallon from prior year. Total operating expenses were up 4.1% or $27.4 million in the quarter. The total operating expense comparison benefited from $13 million in one-time deal and integration costs that we incurred in the prior year related to the closing of the acquisition of Fikes, which amounted to a roughly 2% year-over-year benefit. Approximately 1% of the total operating expense increase is due to unit growth, as we operated 31 more stores than the prior year. Same-store employee expense accounted for approximately 1.5% of the increase due to increases in labor rates, which were partially offset by reduced same-store labor hours. Snow removal due to unfavorable weather in the geography during the quarter contributed to approximately 1% of the increase. And finally, higher variable incentive compensation and charitable contributions contributed to approximately 1.5% of the increase. Net interest expense was $23.4 million in the quarter. That's down $6 million versus the prior year. That's primarily due to paying off debt associated with the Fikes transaction. Depreciation in the quarter was $114.1 million. That's up $8.9 million versus the prior year, primarily due to operating more stores. The effective tax rate for the quarter was 24.1%. That compares to the prior year of 19.2%. The increase this year was driven by a one-time benefit in the prior year from revaluing state deferred tax liabilities following the closing of the Fikes transaction. Our financial flexibility remains excellent. On January 31, we had a total available liquidity of $1.4 billion. In our credit facility debt-to-EBITDA ratio ended the quarter at 1.6x. For the quarter, net cash generated by operating activities of $260 million, less purchases of PP&E of $184 million, resulted in the company generating $76 million of free cash flow, and that compares to generating $91 million in the prior year. At the March meeting, the Board of Directors voted to maintain the quarterly dividend at $0.57 per share. Also during the third quarter, we repurchased approximately $76 million in shares. We are updating our previously communicated fiscal 2026 guidance as follows: Fiscal '26 EBITDA is now expected to increase 18% to 20%. The company now expects inside same-store sales to increase between 3.5% to 4.5% and an inside margin of between 41.5% to 42.5%. Total operating expenses are expected to increase approximately 10%. And the tax rate is now expected to be between 23.5% and 24.5% for the fiscal year. The remainder of our annual guidance remains unchanged. Now our results for the month of February were as follows. Same-store volumes, both inside and outside the store, were strong, and they are reflected in the updated annual guidance. Fuel CPG was in the low $0.40 per gallon. Current cheese costs are slightly favorable versus the prior year. And we expect fourth quarter operating expense to be up mid-single digits. That's partially attributable to higher expected variable incentive compensation.
Thanks, Steve. About a year ago, we began a test for chicken wings in our Des Moines market at 225 stores. I'm happy to announce that we've expanded to over 550 stores as of the end of the third quarter. Our culinary team has done a great job getting the flavor profile right with 5 sauces and 3 dry rubs that have resonated with our guests. Our goal with the wings has been to complement pizza and create an incremental occasion within our prepared foods business. While we do not have financial metrics to share on the wings yet, the platform has been largely incremental, as our pizza units in the stores where we sold wings were up high single-digit percentages in the quarter. Within Casey's Rewards, we crossed a major milestone as we now have over 10 million members. This is a testament to the whole team, from marketing to store operations and everyone in between, providing real value for our guests to earn and use points throughout the store and at the pump. As we continue to grow, we're excited for more guests to join the Casey's Rewards platform. On the fuel side, our fuel team continues to grow our capabilities. They prioritize business-to-business relationships, growing our self-supply capabilities and remaining focused on increasing our capacity to haul fuel in Casey's trucks. This, coupled with our strong inside offering, gives us a strategic advantage in the fourth quarter. And lastly, as we are now in the final quarter of our 3-year strategic plan, I'd like to announce that we have set a date, June 24, for our next Investor Day. We'll hold the event in New York City and plan to release our next 3-year strategic plan at that event. And I'll let you in on a little secret: We plan to serve our famous pizza at the event. We will now take your questions.
分析師問答
Our first question comes from Corey Tarlowe with Jefferies.
Darren, I was wondering if you could comment on the impact of volatility on your business? And any comments on the recent events and some of the impacts that might have had on either fuel sales or profitability?
Yes, Corey. As you know, volatility is a normal part of this business. Events like what's currently happening in Iran occur from time to time. The most relevant example is the onset of the Russia-Ukraine war a few years ago. Typically, in situations like this, gasoline costs increase primarily due to crude oil prices, which then affect the entire system. Wholesale prices rise, and retail prices increase, albeit more gradually. Consequently, margins get slightly compressed initially. When there’s a turning point and costs decrease, retail prices also fall, but at a slower pace, leading to expanded margins. Historically, this results in a net positive for fuel margins over the entire cycle. There’s initial tightening, followed by expansion later. Referring to the recent Ukraine conflict, that pattern definitely occurred. Margins were slightly compressed, but not significantly. In '22, during the first quarter after the Ukraine war began, we recorded a fuel margin of $0.36. The following three quarters each exceeded $0.40 per gallon. So, while there will be some tightening, it’s not a major concern for margins. Regarding volumes, we typically don’t notice any demand destruction until retail prices approach $5 per gallon. Currently, we're around $3 per gallon in our area, so we still have a considerable way to go before we would be worried about volumes.
That's very helpful. Steve, I just wanted to follow up. As you think about the inside same-store sales up 3.5% to 4.5%, some of your largest vendors have called out that they're investing in price. How do you think about pricing impacts within the full year guide? And what do you expect ahead from a pricing perspective? Because I do believe you also mentioned increased promotions.
Yes, Corey, thank you. We don't focus significantly on pricing as a primary aspect of our inside sales strategy. In the current quarter, we had just under a 3% increase in pricing, mainly in the nicotine category where we typically pass on manufacturer price increases. The strength of our insights, particularly in prepared food, is based on the value proposition that we've worked hard to maintain. We raised prices very little; in fact, the way commodities behaved this quarter, we experienced negative pricing in the prepared food category. As our competitors in the quick-service restaurant sector have raised prices over the last few years, this has positively influenced the sales volume in that category, and we plan to continue this approach. We aim to offer value in that area and don’t expect to rely heavily on price increases going forward in prepared food. While we could consider it as a backup option if necessary, we simply haven't had a need for that. On the grocery side, we do adjust pricing to maintain margins, as this is a contractual aspect of our business each year. We will continue to implement price changes in that category consistent with inflation from our partners. Regarding promotions in the grocery category, much of the pricing we receive is often offset by promotional support from our vendor partners.
Our next question comes from Mark Carden with UBS.
So to start, I guess this particular solid performance in grocery and gen merch. Could you provide a little more color on what drove the strength in nonalcoholic beverages? I would assume that Monster is more of a benefit next quarter, but if you saw a tailwind there, definitely let us know. And then do you think there was a stocking up benefit ahead of the severe winter weather that helped the segment?
Yes, Mark, this is Darren. The growth in non-alcoholic beverages was primarily driven by energy drinks, which increased by approximately 14% during the quarter. We also experienced significant growth in our flavor-enhanced waters. Both of these categories significantly contributed to the performance of non-alcoholic beverages. Regarding stocking up, there was no noticeable change in behavior from that perspective during the quarter, and I'm unsure what could have prompted such a change in the third quarter. Therefore, we did not observe any of that behavior during the quarter.
Our next question comes from Chuck Grom with Gordon Haskett.
Great quarter. You noted that quarter-to-date sales are strong, yet your implied fourth quarter guide has a pretty big deceleration on the stack. So I was just wondering if we could reconcile that and maybe just double-click on the overall health of your customer base across income cohorts. Any changes you've seen recently?
Yes. Maybe, Chuck, I'll talk about the health of the customer. I'll let Steve talk about the guidance and that bridge. From a consumer standpoint, the health of the customer, we're still seeing customers shop at our stores across all income cohorts. For sure, the upper income cohorts are stronger, but we're growing business across the low-income cohorts as well. And what we're seeing in terms of behavior difference, I'd say the middle and upper income cohorts are performing about the same. They're still shopping at our stores. They're shopping across all categories, very little change in their behavior. The lower income cohorts are still growing with us. I think that's an important thing to call out. They are growing at a slower rate than the other cohorts, except in Prepared Foods, where they're actually growing as strong, if not stronger, than the higher income cohorts. And I think that's really a reflection of the value proposition that our Prepared Foods category offers relative to QSRs and other of our national brand pizza competitors. They're also leaning a little bit heavier on the dispensed beverage side within Prepared Foods because that typically represents a better value than the bottle and can beverages on the Grocery and General Merchandise side. On Grocery and General Merchandise, lower-income consumers are buying at a little bit slower rate, but still growing again. And that kind of holds together logically as they may have opportunities to go to a grocery store and buy in bulk at a lower unit cost than what we would be able to provide. But that's really what we're seeing on the consumer side. I still feel very good about the overall health of consumer and their shopping habits. And Steve, do you want to talk a little bit about the guidance?
Yes, sure. Chuck, we normally don't give quarterly specific numbers for much at all because we're probably not that precise. But coming into the fourth quarter, we're trying to serve up some squeeze math for people as best we can. So I think on the inside number, I think year-to-date, we're about 3.8% or so on the inside number. The inside range, the midpoint of that range is right around where we are, maybe a touch higher. So ultimately, I think that squeeze math would indicate that fourth quarter should look pretty close to what the year-to-date inside experience has been. We're not expecting it to be significantly different.
Okay. Great. And then just on the grocery margins up really, really healthy here, right, up 150 basis points. You talked about cost of goods management and mix. Maybe dive into the cost of goods management where you are with your vendors on some of that journey versus how much of it was mix, just so we can think about the complexion in the next few quarters.
Yes. This is Darren. Yes, on the cost of goods management side, I think it's really just a reflection of our joint business planning process. Our merchants have done a really good job of partnering with our supplier partners and creating plans that allow us to manage that cost of goods a little bit more effectively and at the same time, grow the business for all of us. And so I'd say that's really what you see on the cost of goods management side. The mix is really a couple of different things. The fastest-growing subcategory within grocery and general merchandise is nonalcoholic beverages, and that's also carries the highest margin rate and had some margin expansion in the quarter. So that's favorably mixing. The other thing I would call out is the nicotine category, and that's a combination of a couple of things. The combustible cigarette mix has gone down, and that's the lowest margin part of that subcategory. The nicotine alternatives, so I think the pouch business is up 31% in the quarter. Vapor was up another 12% as enforcement actions against illicit vape have improved. And so those both carry more than double the margin rate of combustible cigarettes. So when you throw all that into the mix, that really does favorably impact the Grocery and General Merchandise category margin rate.
Our next question comes from Kelly Bania with BMO Capital Markets.
Darren, you, I think, made the comment that you typically don't see demand destruction until the retail price of fuel hits closer to $5 per gallon. And obviously, we're still far away from that. I was just curious if you have seen any impact to consumer behavior, traffic ticket, inside sales just in the past few weeks? And if you are making any contingency plans from a promotional perspective, if this fuel margin environment remains elevated or continues to increase.
Yes, Kelly, we haven't noticed any changes in guest behavior at this point in the cycle. While people dislike rising gas prices, the recent increase is relatively minor. Currently, prices have risen about $0.30 a gallon, putting us in the low $3 range, which is still $0.30 lower than when the Ukraine war began. Fuel prices have decreased significantly over the past year. Thus, we are still in a favorable position. Even with the recent uptick in prices, we remain at a historically low retail price. Therefore, we're not observing any significant shifts in consumer behavior. If prices approach the $5 a gallon mark, we will take steps to stimulate demand. However, right now, our store traffic remains positive, thanks to our merchandising, food team, and store operations teams who are doing an excellent job to attract customers. This value proposition remains strong compared to other options, and in a high fuel price environment, consumers will likely be more selective with their spending, recognizing the value we offer daily in our stores, which should ultimately benefit us.
Just wanted to also ask about the wings. It sounds like that's now at 550 stores. Can you talk a little bit more about the timing and cadence of additional rollout of that program to more stores? And also, can you tie in just how you think about the pricing of that item? I think what we're seeing is $7.99 for 8 pieces. And just curious how you think about the value proposition of that category to, say, pizza or hot sandwiches or some of your other core prepared food offerings.
Yes. So with respect to timing, we're going to have a more measured rollout over time. And we'll do that essentially by distribution center to make sure the supply chain is running efficiently. And keep in mind, this just isn't selling a new product. We have equipment that we need to install in stores to enable that process. We have to do a lot of training. So I would say over the next 2 years would be the cadence where we would roll out the rest of the chain. With respect to pricing, we intend to approach the pricing similar to how we've done with pizza in terms of keeping a gap relative to any sort of national brand competitor. So we encourage trial and adoption and continue to grow the unit velocity on that business. Our ultimate goal for this platform is really to create an incremental occasion in addition to pizza. And so it certainly can be an add-on to the pizza, but it also has the quality and value proposition to stand-alone on its own as an incremental occasion. And the early indications are that we are selling the product to wing-only customers. And we're also seeing that when people are buying our wings, they are increasing their frequency of visit as a result of that. So we feel very good about the progress so far. We still have a long way to go, but things are working well so far.
Our next question comes from Michael Montani with Evercore ISI.
Congrats on the results. Just wanted to ask, if I could, I guess, on 2 areas. One is if you could discuss a little bit, Steve, any synergies that you realized kind of in the quarter and then what a realistic full year outlook is for synergy from CEFCO? And then just to follow up on the wings. How should we think about potential CapEx investment if it's a light touch versus a heavier touch? How do you see that kind of split out over time? And then similarly, on the OpEx side, do you need to add kind of a full-time equivalent worker to be able to deliver the Wing value prop?
Mike, this is Steve. I'll start with the synergy update and then hand it over to Darren for the wings. We are on track with the integration of Fikes and CEFCO. Reflecting on the synergies we anticipated when we closed the deal, it's clear that we are right where we expected to be, possibly even slightly ahead. We realized some G&A savings and benefits from fuel as a result of merging the supply agreements of both entities, which we just finalized this quarter. Everyone is now aligned on timelines and volume benefits, along with the pricing we established from day one. Most of the expected synergies have been achieved. We've begun to implement some synergies in stores as we introduce our products in the proof-of-concept stores we converted earlier. Additionally, we are converting another 50 stores previously equipped with kitchens, which will be completed by the end of the fiscal year. These stores will also begin contributing to prepared food synergies, which we expect to represent about 40% of the total synergies, primarily due to the introduction of pizza. This will align with the conversion schedule. In summary, Fikes will definitely be EBITDA accretive for us this year, and our synergy capture is on track. The majority of prepared food synergies will begin in the first half of next fiscal year and will increase throughout the year.
Yes, Michael, I'll take the wings. From a capital expenditure perspective, it’s a relatively light requirement. Essentially, it involves putting a commercial fryer into the stores. We already have the electrical setup and vent hoods in place. There are some additional small items needed to produce the product, but that's about it. We have thousands of stores to equip, which takes some time. However, the capital expenditure isn't a major investment. On the labor side, it’s more technical in how we increase labor. It’s not just about adding a full-time employee. We have a comprehensive labor modeling process that includes time motion studies to determine what is necessary to prepare any product in our kitchens. The team then estimates demand for those stores. Based on that, they will allocate additional labor to the stores. If the volume is high enough, it might justify adding another full-time employee, but for now, it mostly calls for extra hours rather than a full-time position. Each store has its own specific allocation determined by this analysis, which changes as the actual volume experiences evolve.
Our next question comes from Bonnie Herzog with Goldman Sachs.
I was hoping you could touch on the durability of your new unit growth, I guess, over the long term. Curious to hear from you what is a sustainable pace of new unit growth? And how many sites do you have in your pipeline? I guess, can you share with us if you're still on track to deliver on your guidance this year and to add, I guess, the 80 new stores, which implies about 60 new store openings in the fourth quarter? And then are you guys also sort of on track to add the 500 new stores by the end of this fiscal year?
Yes, we are definitely on track to open 80 stores this year. I'm not sure what figures you have for the fourth quarter, but we do not need to open 60 stores in that quarter to reach our goal. This includes both new-to-industry stores and mergers and acquisitions. We're well positioned to finish the fourth quarter strong and achieve that 80-store target, which will take us to 500 stores in our three-year planning horizon, up from our original target of 350 stores. I'm confident about this goal. In terms of sustainability, we have a solid pipeline for new-to-industry stores. For any real estate acquisitions, we are looking at placing them into our fiscal years 2028 or 2029 since the pipeline looks good. On the M&A side, the team is optimistic about small deals and the prospects in that area. It's important for us to have both new-to-industry stores and M&A progressing simultaneously. If valuations become too high in M&A, we can focus more on new-to-industry stores to maintain consistent growth. Regarding our growth strategy, we typically see about 4% growth from our core operations through same-store sales, fuel profitability, and operational efficiency, as well as an additional 4% from new units. Each year, we aim to increase our unit count by around 4%. This fiscal year, we intentionally scaled back a bit to successfully integrate the CEFCO acquisitions, but we plan to return to that 4% growth rate in the future.
Our next question comes from Jacob Aiken-Phillips with Melius Research.
So thanks for the clarity on the unit expansion. I'm just curious, as we're approaching the new strategic plan, I'm not going to ask for numbers, but how should we be thinking about the biggest growth levers from here? You outlined unit expansion, and you recently talked about how maybe you're going back to adding some labor to the stores as opposed to the constant reduction in same-store hours. So just levers on top line and bottom line that we should be thinking about?
Yes, Jacob. First, I don't want to disclose too much about our upcoming three-year plan. I invite you to join us in New York City for some pizza in June, where we'll share more details. Fundamentally, we plan to grow the business by increasing new units, running operations efficiently, and expanding our inside sales. We're committed to those strategies for growth. Concerning labor, I previously noted that during our current three-year strategic planning cycle, we aimed to reduce labor hours by 1% per year in same-store locations, and we've actually exceeded that goal thanks to our operations and continuous improvement teams. However, this is not a process that continues indefinitely. As I've mentioned, we are nearing the end of that reduction phase. While efficiencies will always be pursued, you shouldn’t expect ongoing reductions in same-store labor hours. As the business grows and volumes rise, we will need to add some labor back to maintain our high guest satisfaction scores. We're willing to increase those hours when the business requires it, and conversely, if business declines, we will adjust by reducing hours to align labor with demand.
Our next question comes from Scott Stringer with Wolfe Research.
You kept the fuel volume guidance unchanged, but performance has been nicely positive year-to-date as you're taking share. So is that at least fair to say that you're tracking at the high end of your range for the year?
Yes, Scott, I wouldn't say that we're tracking at the high end of the range. I'd say we're tracking in the range, and that's where we feel comfortable guiding everybody at this point. And so yes, I've been pleased with the performance so far.
Okay. Got it. And then there was also some positive commentary around tobacco sales. So specifically on the tobacco alternatives, is there a potential that these newer products can return the category as a whole back to positive growth?
Yes. I do think there is that potential. What we've seen a little bit more recently is the decline in combustibles has slowed a bit. It's still from a unit perspective, it's still dropping, but not at the same rate as it was for the last several quarters. So the combination of that decline slowing with the inflation that happens on the combustible side in addition to the growth in alternatives and vapor has actually netted that category out to positive. And that hasn't been that case for quite a while. So we'll have to see how it plays out. But at this point, that is correct. It is actually starting to see some growth in the overall nicotine category.
Thank you. Ladies and gentlemen, we're coming up on the end of our hour long call. I would now like to turn the call back to Darren Rebelez for closing remarks.
All right. Thank you, and thanks for taking time today to join us on the call. And before we go, I just want to thank our team members once again for all their hard work this quarter. Have a great rest of the week.
Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.