ANKENY, Iowa -- Along with the opening in January 2017 of its first convenience store in Ohio, its 15th state, Casey’s General Stores Inc. is looking at accelerating acquisitions, executives said on the company’s first-quarter fiscal 2017 earnings call.
“We see an increase in acquisition opportunity recently, and we will look to augment our organic growth with acquisitions; however, we will continue to remain disciplined when looking at future opportunities. At the end of the first quarter, we acquired three stores and have eight acquisition stores under contract to purchase,” CFO Bill Walljasper said on the call.
“We see more and more people knocking on our doors circling back to us that we have knocked on their doors in the past. And so, hopefully, we can bring some of these opportunities into our company,” he said.
Casey’s second distribution center, located in Terre Haute, Ind., became operational in February.
With the opening of the new distribution center, Walljasper said, “We have no three-day truck routes currently, and a good number of our two-day truck routes were eliminated, as well. Miles driven is going down. Also, the expenses related to having our drivers overnight at hotels and meal expenses for those additional days are being mitigated."
But along with saving on expenses, the new facility opens up new territories for expansion.
“Many of these acquisition [opportunities] are in these new markets. It affords us the opportunity to efficiently expand,” Walljasper said.
“We are working on accelerating our organic growth over the next several years,” he concluded. “Acquisitions will continue to be a very viable part of our growth strategy for years to come, but certainly we don’t want to rely on a majority of our unit growth coming out of acquisitions.”
The Ankeny, Iowa-based company has 39 new stores under construction, including its first store in the state of Ohio, but it did not open any new stores during the first quarter.
Casey’s also acquired three stores during the first quarter. In addition, the company has 72 sites under contract for future new builds, up over 40% from last year at this time, and eight acquisition stores under contract to purchase.
The company has 22 replacement stores under construction, and completed three replacements during the first quarter. It has 15 major remodels under construction, and completed six major remodels during the first quarter.
The company’s goal for fiscal 2017 is to build or acquire 77 to 116 stores, replace 35 existing locations and complete 100 major remodels, the company said.
Other selected highlights:
- Casey’s total store count at the end of the quarter: 1,933.
- The total number of 24-hour stores: 1,012 (it added 85 during the quarter).
- The total number of stores with pizza delivery: 494 (it added 50 during the quarter).
- Since the rollout in January, total downloads of Casey’s mobile app have exceeded 530,000.
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