TULSA, Okla. -- CST Brands Inc. president and CEO Kim Lubel spoke to CNBC about low crude oil prices and the company's better-than expected margins.
Recently declining crude oil and wholesale gasoline prices helped CST Brands achieve 25-cents-per-gallon gross profit in the United States for third-quarter 2014 compared to 16 cents in third-quarter 2013.
"Typically, the crude prices on the world market fall faster than the prices on the street do, so when you have falling crude prices, you tend to catch a little bit more [margin] at the pump for a little bit longer," she told the news outlet.
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Lubel also spoke at the University of Tulsa's Collins College of Business for its Friends of Finance luncheon series. She gave an overview of the fuel and convenience store retailer's activity since spinning off from Valero Energy Corp. in May 2013.
CST Brands recently closed on the purchase of the general partner and incentive distribution rights of CrossAmerica Partners LP, the former Lehigh Gas Partners, Allentown, Pa., and on the acquisition of Canastota, N.Y.-based Nice N Easy Grocery Shoppes Inc. with CrossAmerica.
In her speech in Tulsa, Lubel also cited the importance of communication as an important lesson she has learned during the past year and a half, said the report.
"You'd think talking to people would be really easy," she said. "But it's the hardest thing in every corporation."
The company introduced roundtables where store and corporate employees sit down and communicate, which has "really changed the conversation" at CST Brands during the past year, she said.
Now all corporate employees must work several shifts at various Corner Store locations, and their bonuses are tied to those shifts, Lubel said. The practice has resulted in changes such as no longer asking store employees to submit accounting reports at 8:00 a.m., their busiest time for customer service.
During the first nine months of 2014, CST Brands built and opened 18 new stores, and the company anticipates building 44 to 55 new locations during 2015.
Corner Stores are plentiful throughout Texas, Arkansas, New Mexico, Colorado and several other states. But in Oklahoma there are only two locations near the Texas border--one in Marietta and the other in Ardmore.
The state's liquor laws are a deterrent, Lubel said.
"Until we can sell better beer here," she said when asked about additional locations in the state, "There probably won't be much expansion in Oklahoma."
CST Brands is one of the largest independent retailers of motor fuels and convenience merchandise in North America. Based in San Antonio, it has approximately 1,900 locations throughout the Southwestern United States and Eastern Canada. In the U.S., CST Corner Stores sell fuel and signature products such as Fresh Choices baked and packaged goods, U Force energy and sport drinks, Cibolo Mountain coffee, FC Soda and Flavors2Go fountain drinks. In Canada, CST is the exclusive provider of Ultramar fuel and its Dépanneur du Coin and Corner Stores sell signature Transit Café coffee and pastries. CST also owns the general partner of CrossAmerica Partners LP, an MLP and wholesale distributor of fuels.
Click here to view the full Tulsa World report.
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