Back in 2010 the The New York Times printed an article that stated " Casey's General Stores announced on Tuesday that it had received a $40-a-share offer from an unnamed bidder," In the article, the newspaper was referring to 7-Eleven's attempted acquisition of Casey's General Stores (NASDAQ:CASY).
Fortunately for shareholders of Casey's, the offer was rejected. Between stock price appreciation and dividends, Casey's General Stores has since risen nearly 80%. And based on these trends, the food and fuel company seems to have plenty of gas left for further gains.
The foot-long results
Many gas-station type super-convenience stores are starting in many cases to almost put 7-Eleven to shame by aggressively upping the ante when it comes to food. Casey's General Stores sells hamburgers, wings, pasta, whole pizzas, made-to-order subs, and all sorts of similar hot, freshly prepared American foods.
On June 9, Casey's General Stores reported fiscal full-year 2014 results for the period ended in April. Since the fuel and convenience store business is highly seasonal, it is important to look at a business like this on a full-year basis rather than just any one quarter, even though each quarter throughout the year showed amazing growth.
Total revenue for the year rose 6.1% to $1.9 billion. Same-store sales on fuel inched up 3.1%, on merchandise expanded 7.4%, and for prepared food and fountain drinks soared 11.8%. The prepared-food business explosion continued a trend where it popped 14.3% for 2012 and 8.6% for 2013. Earnings per share leaped 21% to $3.46 per diluted share.
Gather around this
The results contributed to the semi-restaurant chain known as Casey's General Stores attaining the No. 5 spot of fastest-growing national restaurant chains, according to Nation's Restaurant News. According to the firm, the key to Casey's growth is the made-from-scratch pizza. It claims that the stores capitalize on the "mom-and-pop" shop feel in small towns where it's growing in popularity as a gathering place.
Robert J. Myers, CEO of Casey's General Stores, said: "Our sales continue to benefit from expanding operations to 24-hours a day, adding pizza delivery, and completing major remodels." No wonder the company grew even during bad weather. For those who couldn't make it to Casey's for a pizza, Casey's in many cases came to them.
Expanding both kinds of dough
Casey's General Stores plans to increase its store count by between 4% and 6% per year on top of its more than 1,800 current locations. It got a mini jump-start already for this new fiscal year, as it acquired the 24 Stop-n-Go chain in May.
Casey's General Stores already has 27 more stores under construction and 38 new additional sites secured. Add those all up, and the company is already at 5% coming between now and its fiscal year ending in April of next year. It may very well top its annual goal.
Within current stores, Casey's plans to expand same-store sales of fuel by 1%, merchandise by 5.3%, and fresh food sales by 9.5%. Wow. I'm not sure I've ever seen a restaurant chain give such aggressive same-store sales guidance a year out. If the company's goals are achieved, expect to see Casey's General Stores in the top 10 again with next year's report -- only it may just inch a couple of notches higher. Regardless, Casey's General Stores are definetely worth a closer look by Fooli