Susser Holdings Reports Strong 2011, Q4 Results

CORPUS CHRISTI, Texas -- 2011 was the best year ever for Susser Holdings Corp.. "We delivered our 23rd consecutive year of growth in same-store sales during 2011," an upbeat Sam Susser, president and CEO, said during a conference call this morning. "Our company is extremely well-positioned."

Susser is confident that the company will have a strong 2012 as well, because the regional macroeconomic climate remains positive. "Texas has gained many jobs recently," the chief executive said. "And all regions in which we operate had same-store sales growth."

The parent to Stripes convenience stores reported that fuel margins and merchandise sales were especially strong during its fiscal fourth quarter and 2011 overall. Q4 same-store merchandise sales rose 5 percent compared to the same period a year ago, with a net merchandise margin of 33.4 percent. According to the company, single-serve and multipack products are both selling well at its stores.

Q4 average fuel margins increased 7.2 percent compared to the same time in 2010. Retail fuel margins averaged 18.6 cents per gallon. Susser Holdings sold $1.3 billion gallons of fuel companywide in 2011. Diesel sales were a large part of that and now make up 20 percent of its retail fuel mix.

Overall, the company earned a net income of $5.3 million for its Q4. That compares to a $1.3-million loss in the same period a year ago.

As CSNews Online reported in December, Susser Holdings raised more than $70 million through a secondary stock offering. Those funds are to be used to propel an aggressive new store growth plan for the convenience store retailer this year.

According to Susser, six big-box Stripes stores were opened in the company's Q4 and one has already opened in 2012. Six more are under construction currently and the chain hopes to open a total of 25 to 30 new stores during 2012.

"These big-box stores have provided two to three times more sales than our traditional stores," the CEO said. "We also have a land bank of 29 locations for possible stores in the future."

Of the new stores that will open this year, many will be located in areas where the company does not already hold a major market share. However, Susser said those stores should contribute considerably to the bottom line within three years.

Although new store builds will be prominent for Susser Holdings this year, acquisitions by the c-store operator are much less likely.

"Among the recent mergers and acquisitions we've seen, some have not disclosed the terms [of the deal]," said Susser. "But it's our feeling that the sales were made with an assumption that fuel margins will remain very high for years, which have driven valuations way north. We believe we will not continue to see the fuel margins we saw in 2011. I expect we will continue to see some consolidation, but we will remain very disciplined."

Instead, the chief executive said Susser Holdings will continue to look for real estate acquisitions that can add to its land bank.

Regarding foodservice, Susser said the c-store chain will enact some prices increases in particular regions due to cost increases it's facing.

Lastly, he noted that debit fee swipe reform has had a "minimal impact" on its bottom line. Susser Holdings has 542 convenience stores in Texas, New Mexico and Oklahoma. More than 300 of those stores feature its Laredo Taco Company restaurants.