Tobacco Boosts Murphy’s Second-Quarter Sales

Loyalty program improves merchandise movement
Photograph: Shutterstock

EL DORADO, Ark.Tobacco aided Murphy USA’s earnings for the second quarter, despite actual numbers falling by nearly half to $32.7 million vs. $51.8 million in 2018. The company said it made investments to drive fuel volumes and merchandise sales, with a special focus on tobacco, officials said.

The company was pleased with the overall results, with its retail gallons increasing 5.9% compared to the second quarter last year and its merchandise contribution growing 3.1% to $105.5 million, said Andrew Clyde, president and CEO of El Dorado, Ark.-based Murphy USA.

  • Murphy is No. 5 on CSP’s 2019 Top 202 list of U.S. c-store chains by number of retail outlets.

“In the second quarter, we invested in multiple areas of the business to acquire customers and drive traffic to our stores, resulting in share gains in our most important categories,” Clyde said during the company’s Aug. 3 earnings call. “We grew same-store fuel volumes for the fourth consecutive quarter and delivered exceptional merchandise performance, especially in tobacco, where investments we have made in the category increased our market share vs. broad-based declines across the industry.”

The company’s Murphy Drive Rewards program played a key role in boosting business, with the program reaching 9 million participants.

Same-store merchandise sales grew 5.7% for the quarter. Tobacco was the strongest category, Clyde said: Same-store sales were up 6.5% and margin dollars were up 6.6%, leading to share increases across subcategories.

Higher traffic along with strong lottery demand supported same-store sales and margin growth in other merchandise categories, Clyde said.

Based on business projections and its ability to increase future organic growth through operating cash flows, Clyde said the company will initiate a share repurchase program to be executed through July 2021 that could reach $400 million.

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