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What happened

Shares of Casey’s General Stores (NASDAQ: CASY) were up 11.1% as of 2:30 p.m. ET Tuesday after the convenience store chain’s fiscal first-quarter 2024 results handily beat expectations.

To be clear, Casey’s headline numbers were technically mixed, relative to Wall Street’s consensus estimates. For the period, which ended July 31, revenue declined 13.1% year over year to $3.87 billion, slightly undershooting the average estimate of $3.91 billion. But on the bottom line, Casey’s earnings grew 9.5% year over year to $4.52 per share, crushing analysts’ expectations for earnings of $3.37 per share.

So what

Casey’s Chairman and CEO Darren Rebelez called it a “great start” as the company embarks on a new three-year strategic plan unveiled in June. That plan notably includes a goal of adding 350 stores to its current base of just over 2,500 by the end of its fiscal 2026, expanding its private label food offerings, and enhancing operational efficiency to drive 8% to 10% annual EBITDA growth.

“With a more normalized macro operating environment in the quarter, the strength of Casey’s unique business model was on full display,” Rebelez added.

Indeed, Casey’s inside same-store sales grew 5.4% year over year thanks largely to strong whole pizza pie sales and the launch of its new thin-crust pizza. The company’s same-store fuel gallons also climbed 0.4% year over year, with a fuel margin of 41.6 cents per gallon. In addition, Casey’s has agreements in place to acquire 125 new stores, including 63 from a previously announced deal with convenience store peer EG Group.

Now what

As such, Casey’s now expects to add at least 150 stores during its fiscal 2024, up from its previous target of 110.

Casey’s simultaneously reiterated its previous outlook calling for same-store sales to increase by 3% to 5% for the fiscal year, with inside margin improvement to a range of 40% to 41%, and same-store fuel gallons sold to land in a range of down 1% to up 1%.

In the end, this certainly wasn’t a perfect report from Casey’s as it works toward the goals set out in its new strategic plan. But it was a solid report that showed notable improvements in operational efficiency and earnings power. Shares of Casey’s General Stores are unsurprisingly popping in response.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Casey’s General Stores. The Motley Fool has a disclosure policy.

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