You are here
EL DORADO, Ark. — Murphy USA Inc. is “not a company that is standing still,” President and CEO Andrew Clyde stressed Thursday during its 2015 fiscal third-quarter earnings call.
The El Dorado-based retailer continues to focus on organic growth, recently opening its 1,300th convenience store and putting the company on pace to open 70 new convenience stores this year.
Murphy USA feels comfortable opening an additional 60-80 new c-stores in 2016, the chief executive continued.
The c-store retailer also completed its refresh program, whereby it renovated 300 stores. More stores are expected to be “refreshed” next year, said Clyde.
Earnings results were strong across the board at Murphy USA. Net income improved by $5 million year over year to $60 million. Adjusted EBITDA reached $128.5 million in Murphy USA’s third quarter, vs. $119.4 million in the same period in 2014.
One specific trend Clyde highlighted was that consumer demand for motor fuels increased by 2 percent, something the retailer has not seen since at least 2008. This phenomenon no doubt helped the company’s retail fuel gallons sold increase 3.5 percent to 1.08 billion gallons in the quarter ended Sept. 30. Retail fuel margins increased 0.6 cents per gallon to 18.1 cents per gallon.
On a same-store basis, fuel margins per store per month increased more than $1,200 to $50,596.
Merchandise sales and margins enjoyed even greater increases. Quarterly merchandise revenues rose by $30.6 million (5.5 percent) to $592 million. Merchandise unit margins increased by a record 14.6 percent year over year, largely due to increased sales of cigarettes and other tobacco products.
Merchandise margins per store per month came in at $22,418, a rise of more than $1,500 compared to the same period in 2014.
“Our performance was really outstanding,” Clyde remarked.
GETTING TO THE CORE
During the conference call, Clyde also expressed excitement about Murphy USA’s five-year deal with Core-Mark Holding Co. Inc. Core-Mark will be the primary wholesale distributor to the retailer, delivering more than 75 percent of the merchandise sold in Murphy USA locations.
According to Murphy USA’s CEO, this contract will go into effect in February and yield plenty of benefits for the retailer, with the greatest beneficiary being tobacco margins.
“Core-Mark is a growing, public company,” said Clyde. “We feel really good about the [deal]. They are very professional and thoughtful.”