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    Western Refining Integrates Reay's Ranch Stores

    Retail division reports strong Q1 fuel volumes, merchandise sales.

    By Brian Berk, Convenience Store News

    EL PASO, Texas — The integration of 31 Arizona convenience stores acquired from Reay's Ranch Investors LLC has been successful and Western Refining Inc.'s (WNR) retail division is operating well, Jeff Stevens, president and CEO, stated during WNR's 2015 fiscal first-quarter earnings call Tuesday.

    Stevens was especially pleased with fuel volumes and merchandise sales at the company's retail division, comprised of 261 c-stores in Arizona, Colorado, New Mexico and Texas operating under the GIANT, Mustang, Sundial and Howdy's convenience store banners.

    For WNR's most recent quarter ended March 31, retail fuel gallons sold rose by more than 10 million gallons to 83.8 million gallons.

    Merchandise sales were also strong, rising nearly $10 million to $70.88 million. Merchandise margins increased from 28.9 percent to 29.4 percent during the first quarter.

    Despite strength in fuel volumes and merchandise sales, retail fuel margins per gallon were flat at 14 cents per gallon. Due to lower prices at the pump, total retail fuel sales dropped from $216 million to $152.5 million. In addition, total net sales dropped more than $75 million to $258.6 million.

    Overall, WNR's retail division reported a small total operating loss of $441,000, which is an improvement compared to the $830,000 it lost in the same period in 2014.

    Companywide, El Paso-based Western Refining had a strong 2015 first quarter, with net income excluding special items reaching $113.3 million vs. $40.3 million in the year-ago period.

    "We're excited about the fast start we made in the first quarter of 2015," said Stevens. "Our refineries operated very well, margins were good and expenses were in line with expectations."

    Looking ahead, Stevens said he is "very optimistic" about the remainder of 2015. "In the Southwest U.S., gasoline demand is up and we are seeing strong gasoline margins in the second quarter," he relayed.

    By Brian Berk, Convenience Store News
    • About Brian Berk Brian Berk is managing editor of Stagnito Business Information's Convenience Store News and Convenience Store News for the Single Store Owner, where he specializes in covering motor fuels, technology and financial news. He has served the magazine industry for 14 years and has also worked in the radio and newspaper fields. Berk holds a bachelor's degree in communications from the State University of New York at Cortland and a master's degree in journalism from Quinnipiac University in Hamden, Conn.

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