Casey’s General Stores Closes In on 2,000th C-Store

Steve Holtz, Editor in Chief, CSP Daily News

Casey's General Store

ANKENY, Iowa -- With more than 130 locations under agreements for new-store construction, Casey’s General Stores expects to open its 2,000th convenience store before the end of the year. But it will require an uptick in the chain’s current construction trends, company leaders said during a first-quarter earnings report Sept. 6.

"Expansion activity for new-store construction continues to increase as there are now 179 sites either under construction or under agreement," said Terry Handley, president and CEO. "We are well-positioned to sustain a higher level of unit growth in fiscal 2018 and beyond."

Here’s a look at how the chain is accelerating its growth and its financial results for the quarter …

Accelerating construction

New Casey's store

For its fiscal 2018, Casey’s General Stores said it would build or acquire 80 to 120 stores, replace 30 existing locations and complete 75 major remodels. After the first quarter, which ended July 31, the company had built and opened two new stores, acquired three sites, completed one replacement and remodeled 11 stores. In addition, there were 47 new stores, 27 replacement stores and 16 major remodel stores under construction, and the company had 132 sites under agreements for new-store construction and 18 acquisition stores under agreements to purchase.

"We are pleased with the gains made in accelerating new-store construction, and we will remain disciplined in evaluating acquisition opportunities," Handley said. Earlier this year, Handley said Casey’s would step up its store-count growth initiatives, counting on the opening of a new distribution center in Terre Haute, Ind., as a launch pad for more stores to the east.

Casey’s General Stores, Ankeny, Iowa, ranked No. 4 on CSP’s 2017 Top 202 list of the largest c-store chains in the United States. At the time, it owned and operated 1,931 c-stores. By the end of July, that number had grown to 1,980.

Topline results

Casey's General Store

During the first quarter, Casey’s saw its earnings per share dip compared to the previous year. The company reported diluted earnings per share of $1.46 for the first quarter of fiscal 2018, compared to $1.70 per share for the same quarter a year ago.

Gasoline trends

Casey’s General Stores

Same-store sales of gasoline were up 1.7% with an average margin of 19.3 cents per gallon. Total gallons sold for the quarter were up 5.4% to 565 million gallons, while gross profit dollars increased 4.6% to $109.2 million.

In-store sales

Casey's General Store

For the quarter, same-store sales of groceries and general merchandise were up 3.1% with an average margin of 31.9%. "Both same-store sales and average margin were within the annual performance guidance, and we continue to outpace other retailers in the industry," Handley said. For the first quarter, total grocery and other merchandise revenue increased 5.5% to $597.4 million, and gross profit dollars were up 6.3% to $190.4 million.

Prepared food

Casey's General Stores pizza

Prepared foods same-store sales were up 3.7% with an average margin of 62.5%. "We experienced a softening of traffic, particularly in the month of July," said Handley, pointing to dips in local agricultural economies as the primary reason. Total prepared food and fountain revenue increased 7.5% to $261.8 million in the first quarter, while gross profit dollars grew 6.9% to $163.6 million.