‘Challenging’ operating environment pares Murphy USA profits

by Roby Brock ([email protected]) 251 views 

Operational challenges lowered Murphy USA’s quarterly profit, but it was still a strong financial showing for the El Dorado-based gasoline convenience store chain.

Murphy USA reported Wednesday (July 28) second quarter net income of $128.8 million on revenue of $4.456 billion. A year ago, the company posted profits of $168.9 million on revenue of $2.379 billion. Diluted earnings per share were $4.79 compared to $5.73 in last year’s second quarter.

“We delivered strong second quarter results, despite an operating environment that was the most challenging in our company’s history,” said President and CEO Andrew Clyde. “Supply chain issues, labor shortages, and Colonial pipeline interruptions were just a few of the challenges around which our teams were forced to navigate and overcome.”

“Nevertheless, results were resilient despite these challenges and underpinned by strong fundamentals, including a recovery in attached merchandise categories as customer transactions and fuel volumes trended higher in June, coupled with robust all-in fuel margins despite another quarter of rising product prices,” Clyde said.

“Second quarter results were also noteworthy against the strength of the prior year comparison, and highlight the advantage of our low-cost, high volume business model, which differentiates our performance potential and better positions Murphy USA to compete and win in a challenging environment,” he added.

Murphy USA announced in December 2020 it would acquire New Jersey-based convenience store chain QuickChek in a $645 million deal.

Other highlights from the quarter included:

  • Total retail gallons increased 32.6% in Q2 2021 compared to Q2 2020, while volumes on a same store sales (“SSS”) basis increased 22.4%;
  • Merchandise contribution dollars increased 55.8% to $184.5 million compared to the prior-year quarter, on average unit margins of 19.2% in the current quarter due to the inclusion of the QuickChek acquisition in the current period; and
  • Food and beverage contribution margin increased significantly to 15.2% of total merchandise contribution dollars compared to 0.8% in the prior year period due to the inclusion of QuickChek in the current period.

During the second quarter, the company opened three new Murphy Express stores and closed one QuickChek store. There are nine new Murphy Express sites, six new QuickChek sites, and 14 raze-and-rebuild Murphy USA sites currently under construction.

Shares of Murphy USA (NYSE: MUSA) closed trading on Wednesday at $147.93. Over the past year, the company’s stock has traded between a low of $117.08 per share and a high of $159.00 per share.

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