ANKENY, Iowa - Casey's General (NASDAQ:CASY) Stores, Inc. (NASDAQ:CASY), a leading chain in the U.S. convenience store market, has finalized its acquisition of Fikes Wholesale, the proprietor of CEFCO Convenience Stores, on November 1, 2024. With this purchase, Casey's adds 148 stores in Texas, a key growth area for the company, alongside 50 locations across Alabama, Florida, and Mississippi, expanding its total operations to around 2,900 stores.
Darren Rebelez, President and CEO of Casey’s, expressed enthusiasm for the integration of Fikes into the Casey's family and the opportunity to offer Casey's signature pizza at the new high-volume locations. This move represents the largest acquisition in the company's history and aligns with the strategic initiatives presented during the June 2023 Investor Day.
In a business update, Casey’s reported an expected fuel margin of approximately 40 cents per gallon for the second quarter, which concluded on October 31, 2024.
Casey’s General Stores, a Fortune 500 company, has been providing freshly prepared foods, quality fuel, and friendly service for over 50 years. As the third-largest convenience store retailer and the fifth-largest pizza chain in the United States, Casey's continues to grow its brand and offerings, which include a variety of beverages, snacks, donuts, and other bakery items.
The company's forward-looking statements indicate plans for future growth and performance but also acknowledge risks and uncertainties that could affect actual results, such as the integration of the new stores and various market conditions. These factors are detailed in Casey’s most recent annual and quarterly reports filed with the Securities and Exchange Commission.
This expansion is based on a press release statement from Casey's General Stores.
In other recent news, Casey's General Stores has been the subject of multiple analyst reviews and financial updates. The company reported a 7% increase in diluted earnings per share to $4.83, a 6% rise in net income to $180 million, and a 9% improvement in EBITDA, reaching $346 million for the first quarter of fiscal year 2025. Casey's has also seen a 2.3% increase in in-store sales and a 0.7% uptick in fuel same-store gallons sold.
Benchmark maintained its Buy rating on Casey's shares, citing the company's growth strategy, including unit expansion and enhancement of the food segment. Goldman Sachs (NYSE:GS), however, held a neutral stance, indicating that the current stock price already reflects the company's growth opportunities. JPMorgan (NYSE:JPM) downgraded Casey's stock from Neutral to Underweight, pointing to potential pressure on Prepared Foods margins due to rising cheese costs.
Evercore ISI raised Casey's share target from $435 to $440, maintaining an Outperform rating on the stock. This move follows insights gained during an Investor Day event outlining Casey's strategies for achieving its EBITDA growth target. The company also recently announced its acquisition of Fikes, including 198 CEFCO convenience stores, as part of its growth strategy. These are the recent developments surrounding Casey's General Stores.
InvestingPro Insights
Casey's General Stores' recent acquisition of Fikes Wholesale aligns well with its growth strategy and financial performance. According to InvestingPro data, Casey's has a market capitalization of $14.14 billion, reflecting its significant presence in the convenience store sector. The company's revenue for the last twelve months as of Q1 2025 stood at $15.09 billion, with a modest growth of 4.01%, indicating steady expansion.
An InvestingPro Tip highlights that Casey's has raised its dividend for 25 consecutive years, demonstrating a strong commitment to shareholder returns. This is particularly noteworthy given the company's recent large-scale acquisition and expansion efforts. The dividend yield currently stands at 0.52%, with a robust dividend growth of 16.28% over the last twelve months.
The company's profitability is evident from its gross profit margin of 22.7% and operating income margin of 4.9% for the last twelve months. These figures suggest that Casey's is managing its costs effectively while pursuing growth opportunities like the Fikes acquisition.
It's worth noting that Casey's is trading at a P/E ratio of 27.52, which an InvestingPro Tip indicates is high relative to near-term earnings growth. This valuation metric could be influenced by investor optimism surrounding the company's expansion strategy and consistent performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips that could provide deeper insights into Casey's financial health and market position.
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