EL DORADO, Ark. -- As part of its “organic growth” plan, Murphy USA Inc. opened its 1,300th convenience store during third-quarter 2015 and is “on track to open over 70 stores for the year,” president and CEO Andrew Clyde said during the company’s quarterly earnings call. “We plan to maintain this pace next year.”
For the three-month period ended Sept. 30, 2015, Murphy USA Inc., reported net income of $60.5 million. Net income was $62.7 million for the comparable period in 2014.
The increase in income from continuing operations reflects higher retail fuel margins and improved merchandise margins which were partially offset by lower product supply and wholesale contribution and lower realized sales prices for renewable identification numbers (RINs) in the period.
“Volatility continued in Q3 and carried into Q4, leading to solid retail fuel margins, while overall fuel demand and per-site volume comps remained strong, especially after periods that compared to the prior-year enhanced fuel discount,” said president and CEO Andrew Clyde. “Merchandise contribution continues to expand as our new store formats lead to higher sales and improved product mix while keeping our low-cost operating model in place. This combination of margin expansion and cost control drives Murphy USA's competitive position in the marketplace.”
The new formats include larger stores, he said.
Total retail fuel volumes grew 3.5% overall for the quarter while retail fuel margins increased to 18.1 cents per gallon (cpg); per-site monthly volumes declined 0.7%.
Merchandise unit margins matched last quarter's record of 14.6% compared to third-quarter 2014 merchandise unit margins of 13.7%.
Non-tobacco merchandise sales increased 9.2% average per store month (APSM) basis (7.5% same-store sales [SSS]) and associated margin dollars increased 14.2% APSM (12.1% SSS).
During the third-quarter 2015, Murphy USA opened 14 retail locations. Through early November 2015, the company has opened an additional nine sites. With the addition of all these stores, Murphy USA has 1,300 total locations in operation that include 1,081 Murphy USA sites and 219 Murphy Express sites. It also has 36 sites under construction.
"Our organic growth plan is on track to deliver over 70 new sites by year end,” Clyde said.
The company has completed the more than 300-store refresh program, and “very early results look promising about volume and merchandise uplift as we provide a facelift on some of our oldest stores,” he said. “We plan to continue this program in 2016.”
Murphy USA has started its first raze and rebuild, and it has identified 10 stores for next year.
Clyde said Murphy USA is still evaluating whether to end or maintain its ongoing relationship with Walmart for locations on the retailer’s properties.
For the nine-month period ended Sept. 30, 2015, the company reported net income of $109.7 million. Net income was $145.5 million for the comparable period in 2014.
El Dorado, Ark.-based Murphy USA is a leading marketer of retail motor fuel products and convenience-store merchandise with 1,300 locations in 23 states across the Southwest, Southeast and Midwest. Its stores are 100% company operated.