About six months into its plan to open 350 more convenience stores by 2026, Casey’s General Stores appears to be well ahead of schedule.
The Ankeny, Iowa-based retailer expects to add “at least 150 stores” to its network in fiscal 2024, which is about 40 more locations that it had initially planned for, the company said in its fiscal second-quarter earnings report released on Tuesday.
When Casey’s revealed its three-year plan during its investor day back in June, CEO Darren Rebelez said the 350 locations would be reached through a combination of newly built and acquired sites.
Casey’s has done just that over the past half year. During the previous quarter, Casey’s added 13 new-to-industry locations and acquired 60 stores, according to the report. In the first quarter of this fiscal year, Casey’s added 10 new builds while acquiring four locations, according to the company’s Q1 2024 earnings report.
Casey’s has had an active 2023 on the acquisitions front, having purchased more than 100 locations through several deals since the start of the year.
Earlier this year, the retailer acquired 89 Minit Mart convenience stores across Missouri, Kentucky and Tennessee from EG America through two separate acquisitions, and purchased the five-location DeliMart c-store chain in Iowa.
In November, Casey’s acquired 22 convenience stores under the Lone Star Food Stores banner from fuel and c-store retailer W. Douglass Distributing. This marked Casey’s entrance into Texas, its 17th state of operation.
More recently, Casey’s acquired 11 EZ GO stores in Nebraska and Oklahoma from Love’s Travel Stops & Country Stores. Those stores were part of a group of 22 sites that Love’s purchased from Carey Johnson Oil Company in April.
Six months ago, Casey’s noted that it planned to target small operators in future acquisitions, since many of these retailers are struggling to stay afloat amid rising operating and maintenance costs and credit card fees. During Tuesday’s earnings call, Chief Financial Officer Steve Bramlage doubled down on that approach.
“It's just more and more difficult for small independent operators to compete not just against us, but anybody with any reasonable amount of scale,” Bramlage said. “And we just don't see that trend changing anytime in the near term.”
Elsewhere, inside gross profits during Casey’s second quarter grew about 9.7% compared to this time last year, while total fuel gross profits were up 8.6%. Same-store operating expenses excluding credit card fees were up 2.1%.
Casey’s earnings before interest, taxes, depreciation and amortization during the quarter was $306 million — up 13% year over year — marking the company’s “highest EBITDA in the first six months” of the fiscal year in its history, Rebelez said during the call.
