Casey's to Open 150 New 24-Hour Stores by End of January

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Casey's to Open 150 New 24-Hour Stores by End of January


ANKENY, Iowa -- Casey's General Stores Inc. will convert 150 more of its stores to a 24-hour format by the end of January. The convenience store chain has already converted more than 70 locations.

"We think it's a viable alternative [to other stores we operate]," William Walljapser, the company's CFO, said during this morning's second-quarter fiscal 2012 earnings conference call.

The retailer will also remain aggressive regarding acquisitions. Tennessee, Kentucky and Arkansas are the states in which Casey's is looking to expand, Walljasper said. "The acquisition pipeline continues to be robust," he noted. "We are in a lot of talks. There are many opportunities out there."

However, the CFO added that no acquisitions have been inked or about to be completed, so no large deals are expected to take place before mid-2012.

In the meantime, Casey's is feeling confident about organic growth. During its 2012 fiscal second quarter, which ended Oct. 31, same-store customer visits to Casey's c-stores rose 3.5 percent.

Another way it is boosting sales does not require customers to visit its c-stores at all. Pizza delivery, which the company has instituted at 20 stores, has been received positively, Walljasper reported. "We think there's a lot of opportunity out there," he said. "We plan to add pizza delivery to 40 to 50 more stores by the end of March."

Also bulking up Casey's bottom line on a smaller scale are its car washes. Casey's has only built one car wash on its own; the others it operates have come via acquisitions. "Car washes have been very positive," said Walljasper.

Unfortunately, the new swipe fee reforms are not providing a huge boost. "There was no significant impact [to earnings] from swipe fee rules," Walljasper said. "The benefits might be much lower than people might anticipate. But we will continue to monitor it."

Casey's second-quarter net income increased 73 percent compared to the same period last year. The company earned $37.6 million during its latest quarter, compared to $21.7 million during the same period in 2010. Second-quarter fiscal 2011 earnings would have been considerably higher if not for one-time costs associated with fending off the unsuccessful hostile takeover bid by Alimentation Couche-Tard Inc.

Casey's fiscal 2012 second-quarter revenues advanced 32 percent, to $1.78 billion, compared to the same time last year.

Although the company's 2012 second-quarter net earnings figure matched Wall Street analyst expectations, the revenue number fell shy. Wall Street expected the c-store chain to earn $1.84 billion in revenues for Q2.

Casey's constructed six stores and acquired another six during its latest quarter. The c-store chain now operates 1,677 corporate locations.