Murphy USA’s first-quarter 2024 results showed resilience in tobacco and fuel despite headwinds that yielded lower-than expected results. President and CEO Andrew Clyde highlighted the bright spots in those categories and others on Thursday’s earnings call.
The convenience-store chain’s net income and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for first-quarter 2024 were lower versus the prior-year quarter. Murphy’s net income was $66 million for first-quarter 2024, down from $106.3 million in the same quarter last year.
Unique factors that separated first-quarter 2024 to the same quarter the year prior included product prices being up 50 cents compared to 8 cents in the prior year, and an increase in severe weather events, Clyde said on the call. Severe weather, especially on the Atlantic coast, drove customers to trade down for value and stock up on tobacco and fuel.
“In that setting, our core fuel and tobacco businesses performed exceptionally well. APSM [Average per store month] fuel gallons were essentially flat year-over-year, and up 2% on a two-year stack on comparable retail margins of 22 cents per gallon, with January retail margins the highest on record,” Clyde said. “This level of performance in what would historically be a very challenging environment strongly supports our view of the sustainability of the structural industry dynamics that continue to favor Murphy USA.”
- Murphy USA is No. 4 on CSP’s 2024 Top 40 Update to the 2023 Top 202 ranking of U.S. c-store chains by store count. Watch for the full 2024 Top 202 ranking in the June issue of CSP magazine and in CSP Daily News.
The tobacco category saw strong sales and margin growth, up 6% and 4.5%, respectively, and units remained healthy across all nicotine categories, Clyde said.
But, he said, the more discretionary center store categories were negatively affected due to fewer trips reflecting lower absolute fuel prices and less stocking up behavior for these categories.
Some bright spots, though, were Murphy-branded stores growing nontobacco margin dollars by 3.6% APSM, led by innovative dispensed beverage offers with sales up 19% APSM, Clyde said. Packaged beverage sales were up 1.8% APSM, yet contribution margin dollars for the category grew 3% due to pricing and promotionally driven product and exchanges, he said.
Clyde was optimistic looking ahead, highlighting its hyper-focused, everyday low price and everyday low-cost model.
He gave a brief update on the company’s digital transformation, saying that QuickChek’s new loyalty program is underway and should be rolled out in the fourth quarter.
Murphy USA, El Dorado, Arkansas, completed its acquisition of QuickChek in January 2021. 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.
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