New-store construction at Murphy USA is putting the convenience-store chain in a great place for fourth-quarter 2024 openings, President and CEO Andrew Clyde said on Murphy USA’s third-quarter 2024 earnings call on Oct. 31. It also sets the foundation for more new stores and earnings growth in 2025 and beyond, he said.
“Our efforts to front load our real estate pipeline have paid off as we've seen more stores exit the permitting process than expected,” Clyde said on the call. “As such, we are updating our [capital expenditure] projections for the year as we take advantage of this beneficial timing. I want to acknowledge our asset development team who worked hard to build this high-quality pipeline and implement process improvements to ensure we would hit our goals this year and put us in a better position for ratable store growth going forward.”
Murphy USA opened four new stores in the third quarter of this year, bringing its year-to-date openings to 10, including one QuickChek store, said Galagher Jeff, Murphy USA’s executive vice president and CFO.
Murphy USA also reopened 16 raze-and-rebuild stores, he said, as part of the company’s ongoing program to transform small kiosks into 1,400-square-foot stores in the third quarter. It has completed 27 raze-and-rebuild projects in the past year.
Murphy USA is No. 4 on CSP’s 2024 Top 202 ranking of U.S. convenience-store chains by store count.
“We've also accelerated our construction activity to its highest level in the past 10 years with 29 new stores and 15 raze-and-rebuilds currently under construction, and we've already started construction on some of our 2025 new builds,” Jeff said.
In total, 40 new stores and 47 raze-and-rebuilds are scheduled for completion in 2024, he said, but some projects could potentially slip into early 2025.
New stores are outperforming older stores, Jeff said.
“For the 2022 and 2023 build classes, those 56 stores are having 292,000 gallons per store month and 43,000 merchandising contribution dollars per store month, which is 18% and 27% higher than the network averages, respectively,” he said. “So we're building more new stores, and these stores are delivering more and outperforming our existing stores, which demonstrates why we are excited to accelerate this growth and that will be highly impactful to our company performance going forward.”
Murphy USA reported net income and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) declined for third-quarter 2024 compared to the prior-year quarter due primarily to lower total fuel contribution and higher store operating expenses. This was partially offset by higher retail fuel volumes and higher overall merchandise contribution, the convenience-store retailer said in its earnings report.
El Dorado, Arkansas-based Murphy USA operates one of the nation’s largest convenience-store chains, operating in 27 states, located primarily in the Southwest, Southeast, Midwest and Northeast, the majority of which are next to Walmart Supercenters. It acquired the QuickChek brand in January 2021.
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