Casey's Plans $35M HQ Expansion
ANKENY, Iowa — Casey's General Stores Inc. is growing more than just its convenience store count. The company is planning to grow its headquarters as well.
The convenience retailer is penciling a $35-million expansion at its local office at 1 Southeast Convenience Boulevard, according to the Des Moines Register.
The proposal will span 60,000 square feet and carries a total assessed valuation of $10 million, the report added.
Brian Johnson, senior vice president of store development, said Casey's is requesting city and state tax credits for the project.
"We’ve been in a growth mode for quite a while," Johnson said. "We’re really out of space here in our existing building."
According to Johnson, the Ankeny headquarters employs 860 associates — not counting warehouse employees or truck drivers. After the expansion, Casey's anticipates hiring at least an additional 80 office workers in the next five years.
The company is currently leasing extra space; however, the project will allow the company to bring everyone under one roof, the news outlet added.
A public hearing for a development agreement between Casey's and Ankeny is planned for Jan. 15. The details of the development agreement have not been finalized yet, according to public documents.
The proposed expansion comes as Casey's portfolio reached 2,000 convenience stores at the end of November.
In addition, the retailer opened its second distribution center, located in Terre Haute, Ind., in 2016, opening the door for expansion into new territories. In Casey's first-quarter fiscal year 2018 earnings call on Sept. 6, Chief Financial Officer Bill Walljasper raised the possibility of a third distribution center, as CSNews Online previously reported.
The plans also come as Casey's faces efforts by some shareholders for the company to conduct a strategic review, exploring all options including a possible sale. As CSNews Online reported, JCP Investment Management LLC, BLR Partners LP and Joshua E. Schechter wrote in a letter to fellow shareholders that decreasing same-store sales and bloated operational expenses have led the company to miss earnings targets for seven straight quarters.
President and CEO Terry Handley responded that the board of directors "will review the content of the letter thoroughly," he added.
According to the company, Casey's five-year total shareholder returns of 121 percent exceed the total shareholder returns of the S&P 500 index (108 percent) and the S&P Retail index (46 percent) over the same period.
In a recent analyst note, Jeffries LLC said it was already positive on Casey's fundamental outlook given recent showings of solid operating expense growth restraint and stabilizing in-store comp trends. Now, "activism … provides investors with a win/win situation as management will either show greater urgency to enhance profitability or holders will grow impatient and ultimately back the activist for a sale," wrote Christopher Mandeville, equity analyst.
Ankeny-based Casey's General Stores owns and operates more than 2,000 convenience stores in 15 states. It owns and operates two distribution centers, delivering approximately 90 percent of in-store products as well as approximately 75 percent of the fuel sold at its convenience stores.