Mad Money host Jim Cramer identified oil price volatility as a primary source of pressure on Casey’s General Stores (NASDAQ:CASY) and Texas Roadhouse (NASDAQ:TXRH), remarks made during a September 17 lightning round. Cramer characterized the recent decline in Casey’s stock as "totally oil" driven, praising a viewer’s decision to buy back into the position at lower levels. The commentary highlights how macro-commodity swings are influencing retail and consumer discretionary valuations, even when company-specific operational data suggests resilience.

Market Context

The discussion arises amid a period of fluctuating energy prices that impact both fuel-centric retailers and cost-sensitive restaurant operators. While Casey’s has direct exposure to fuel margins, Texas Roadhouse faces broader cost inflation pressures that Cramer grouped under the same macro umbrella. The market appears to be repricing these names based on commodity headwinds, with Casey’s shares having fallen significantly, described by Cramer as "almost been cut in half," creating what he views as a buying opportunity.

Analysis

Cramer’s assertion that oil is the sole driver for Casey’s weakness overlooks the nuanced reality of the company’s fiscal first-quarter 2027 results. While fuel same-store gallons declined 0.3%, Casey’s fuel margin actually increased to 47.8 cents per gallon, driving a 19.6% rise in fuel gross profit to $446.9 million. This margin expansion is well above the fiscal 2026 average of 42.6 cents. However, the risk lies in normalization; if margins revert to historical averages without a corresponding increase in volume, the fuel segment’s contribution to earnings growth could diminish.

Texas Roadhouse presents a different fundamental picture, where oil is not a direct input cost but part of a broader inflationary environment. The restaurant chain reported a 6.2% increase in second-quarter comparable restaurant sales, yet restaurant margins compressed by 66 basis points to 16.4%. This compression was driven by a 7% rise in commodity inflation and 3.9% in wage and labor costs. Unlike Casey’s, which benefits from fuel margin volatility, TXRH’s profitability is squeezed by the same macro forces that increase operating costs across the sector.

Despite the margin pressure, both companies demonstrated operational strength. Casey’s diluted EPS rose 27.7% to $7.37, and EBITDA increased 17.1% to $485.1 million. Inside same-store sales grew 3.2%. Texas Roadhouse maintained strong traffic trends, with average weekly sales hitting $177,252, up from $167,350 a year earlier. Restaurant margin dollars still increased 6.9% to $275.1 million, and the company generated $180.1 million in operating cash flow. Cramer’s focus on oil pressure may reflect short-term sentiment and gamma exposure in these tickers rather than the full operational reality.

Key Numbers

- Casey’s fuel margin: 47.8 cents per gallon (vs. 42.6-cent fiscal 2026 average)

- Casey’s fuel gross profit: $446.9 million (up 19.6%)

- Casey’s diluted EPS: $7.37 (up 27.7%)

- Texas Roadhouse restaurant margin: 16.4% (down 66 basis points)

- Texas Roadhouse commodity inflation: 7%

- Texas Roadhouse average weekly sales: $177,252

- Casey’s same-store fuel gallons guidance: -1% to +1% for fiscal 2027

- Texas Roadhouse operating cash flow: $180.1 million

What to Watch

Traders should monitor fuel margin normalization for Casey’s, as the company faces the challenge of maintaining earnings growth if margins revert to historical averages. For Texas Roadhouse, the key metric is the ability to sustain traffic-driven sales growth against projected 5% commodity inflation and 3-4% wage inflation for 2026. Both stocks remain sensitive to oil price movements and broader consumer spending trends, with Casey’s offering direct fuel exposure and TXRH reflecting broader cost inflation impacts.

Investors must also watch for any shifts in the macroeconomic environment that could accelerate or decelerate these inflationary pressures. While Cramer’s bullish stance on Casey’s at lower valuations suggests a potential rebound, the sustainability of this move depends on whether fuel volumes can offset margin compression. For TXRH, continued store week growth of 5-6% and strong average unit volumes will be critical in navigating the high-cost environment.