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CORPUS CHRISTI, Texas -- Susser Holdings Corp., operator of 325 Stripes convenience stores in the U.S., opened 16 new locations in fiscal 2006, and plans to open two additional stores in the first quarter of 2007, while continuing construction on seven other units, the company said in its fourth quarter and year-end fiscal report.
Also during the fourth quarter, nine of the company's low-volume stores were closed. For the remainder of 2007, Susser estimates it will open 18 to 22 new retail stores, all of which will include a Laredo Taco Co. quick-serve restaurant. Currently, the restaurants are in place at 146 of the company's locations.
"We continued to see strong year-over-year growth in merchandise sales and merchandise gross margins during the fourth quarter, and we are especially pleased with the continued growth of our Laredo Taco Co. restaurant business," said Sam L. Susser, CEO. "As expected, fuel margins declined from the record high levels we saw in the third quarter of 2006, although we still achieved full year fuel margins that were slightly ahead of last year's and consistent with our long-term average," he said.
The company's wholesale operations saw 30 new dealer sites added to its portfolio, while discontinuing an additional nine sites, to bring total dealer sites to 367 as of year-end. In the first quarter of 2007, the company plans to add seven or more dealer sites, and 25 to 35 additional sites in the remainder of 2007.
Susser's store rebranding initiative from Circle K to Stripes and its fuel rebranding from CITGO to Valero was completed in the company's first quarter of 2007. An ongoing advertising campaign will begin this month in the Christi, Laredo and the Rio Grande Valley areas of Texas, which includes television, radio and billboard advertising promoting the Stripes brand and the Laredo Taco Company as a place for fresh, delicious food and beverages, the company stated.
Fourth quarter 2006 merchandise sales for the company totaled $88.7 million, a 9.9 percent increase from the $80.7 million recorded in the year-ago period. Also, total revenues for the company in its fourth quarter fell to $488 million, compared to the $509.1 million seen in the same quarter in 2005. The company attributed the fall to lower retail and wholesale fuel prices compared to the fourth quarter of a year prior.
Earnings before taxes were negatively impacted by an $8.5 million decline in fuel gross profit, causing profits to fall to $5.9 million from the $13.8 million seen in the fourth quarter of 2005. Retail fuel margins for the quarter were 9.2 cents per gallon, compared to the 14.8 cents per gallon seen in the fourth quarter of 2005. An 11.2 percent increase in non-fuel gross profit -- totaling $3.5 million -- did not offset the affects of lower fuel margins on profits.
"Overall, we're very pleased with our fourth quarter and full year results, and we continue to expect strong operating performance in 2007," Susser added. "With the December 2005 recapitalization, the October 2006 IPO, the re-branding to Stripes and the conversion to Valero now behind us, our management team looks forward to focusing its time and energy on growth initiatives going forward."