Casey’s currently operates in 16 states in the Midwest and Southern US. As of August 2023, they have close to a $10 billion market cap and are the number three player in their market.
To breakdown Casey’s, we’re joined by by Markus Hansen, portfolio manager and senior analyst at Vontobel Asset Management. We cover the industry of convenience stores, including the competition that exists in this market and the unique geographical considerations. We also discuss the financial model, drivers of gasoline performance versus in-store purchases, and margin profiles across the different segments of this business. This is another fascinating story hidden in plain sight. Please enjoy this breakdown of Casey’s.
Show Notes
(00:00:00) – Introduction
(00:02:42) – (First question) – The concept of Casey’s General Stores
(00:06:04) – Casey’s competitors and the market share in different regions
(00:10:52) – The main differences between Casey’s and a regular gas station
(00:14:09) – A brief history on Casey’s beginnings and its founder
(00:17:25) – A breakdown of the business’ revenue
(00:19:14) – Casey’s growth despite the changing environment standards raising operational costs
(00:23:52) – The business’ margin profile
(00:26:53) – How Casey’s General competes with its peers and fuel pricing
(00:29:33) – The focus for Casey’s with regard to expansion opportunities
(00:33:06) – The hurdles involved with building new gas stations versus acquiring existing stores
(00:35:08) – Casey’s stance on franchising
(00:38:02) – The company’s attractiveness to buyers
(00:40:52) – Casey’s General’s average stock performance
(00:44:26) – Key risks of Casey’s
(00:47:30) – The main lessons learned from Casey’s General Stores