Core Insights - Murphy USA Inc. (MUSA) reported third-quarter 2025 adjusted earnings per share of $7.25, exceeding the Zacks Consensus Estimate of $6.60 and slightly up from $7.20 in the previous year, driven by stronger merchandise results [1][10] - Operating revenues for Murphy USA were $5.1 billion, a decrease of 2.5% year over year, missing the consensus estimate by $104 million due to lower petroleum product sales [1][10] Revenue Breakdown - Revenues from petroleum product sales totaled $3.9 billion, falling short of the estimated $4.2 billion and down 4.8% from the third quarter of 2024 [2] - Merchandise sales reached $1.1 billion, reflecting a year-over-year increase of 3.7% [2] Fuel Contribution Analysis - Total fuel contribution decreased by 4.8% year over year to $384.8 million, attributed to lower retail contributions and margin contraction [3] - Retail fuel contribution fell 10.4% year over year to $354.5 million, with margins narrowing to 28.3 cents per gallon from 31.9 cents in the same period of 2024 [4] Merchandise Performance - Contribution from merchandise increased by 11.2% to $241.2 million, supported by higher sales and improved unit margins, which rose to 21.5% from 20% a year ago [5] - On a same-store sales (SSS) basis, total merchandise contribution improved by 8.3% year over year, primarily due to an 18% increase in nicotine margins [5] Operational Metrics - Monthly fuel gallons sold decreased by 1.8% compared to the prior year, while merchandise sales increased by 1% on an average per-store monthly basis [6] - Retail gallons sold improved by 1.2% year over year to 1,254.3 million, surpassing the estimate of 1,233 million [4] Financial Position - As of September 30, Murphy USA had cash and cash equivalents of $42.8 million and long-term debt of $2.2 billion, resulting in a debt-to-capitalization ratio of 80.3% [7] - The company repurchased shares worth $221.4 million during the quarter [7] Shareholder Returns - The board authorized a new $2 billion share repurchase program, effective after the completion of the current $1.5 billion plan [8] - A quarterly dividend of 63 cents per share was declared, marking a 19% increase from the previous quarter's dividend [8]

Executive Changes in Convenience Retail Sector - Three major convenience retailers announced significant executive changes in October, highlighting a trend of leadership transitions within the industry [1] Murphy USA - Mindy West will become the CEO of Murphy USA on January 1, 2026, succeeding Andrew Clyde, who has led the company since its spinoff in 2013 and will retire at the end of 2025 [2] - West has been with Murphy USA since its inception, previously serving as executive vice president, CFO, and treasurer, and became the first COO in 2024 [3] - Donald Smith Jr. has been appointed as the interim CFO, having served as VP and controller since the spinoff and treasurer since 2024 [4] United Dairy Farmers (UDF) - Michael Ahmed has been appointed as the new CEO of UDF, replacing Brad Lindner, who is retiring after 47 years with the company [6] - Ahmed previously held the position of COO at Gorilla Glue and has extensive experience in VP-level roles at Tyson Foods and AdvancePierre Foods [6] TravelCenters of America - Debi Boffa resigned as CEO of TravelCenters of America after nearly three decades, returning to New Zealand [7] - Greg Franks, BP's senior vice president of mobility and convenience for the Americas, will serve as the interim CEO while maintaining his current responsibilities [8]

Core Insights - Mindy West has been appointed as the new CEO of Murphy USA, set to take over in January 2026, succeeding Andrew Clyde [2][5] - West has extensive experience within the company, having joined Murphy Oil in 1996 and played a key role in the spin-off of Murphy USA in 2013 [3][4] - The company has faced challenges, including a decline in annual revenue for two consecutive years and operational difficulties related to a new store program launched in late 2023 [5][6] Company Background - Mindy West's background includes roles as executive vice president, CFO, and treasurer, and she became the first COO of Murphy USA early last year [4] - Her experience has provided her with a comprehensive understanding of the financial, commercial, and customer aspects of the business [5] Current Challenges - Murphy USA's new store program aims to enhance traffic flow and optimize sales but has encountered scheduling setbacks affecting fuel and merchandise sales [6] - The company has recently laid off about 100 corporate team members as part of efforts to improve operational effectiveness [7]

Financial Performance - For Q3 2025, the company reported net income of $129.9 million, or $6.76 per diluted share, on revenue of $5.1 billion, compared to net income of $149.2 million, or $7.20 per diluted share, on $5.2 billion of revenue in Q3 2024[158]. - Year-to-date revenues for the nine months ended September 30, 2025, decreased by $0.9 billion, or 5.8%, to $14.6 billion, primarily due to an 8.5% decrease in average retail fuel sales prices[165]. - Marketing segment net income for Q3 2025 decreased to $163.9 million, down from $168.0 million in Q3 2024, a decline of 0.6%[171]. - Total operating revenues for the marketing segment in Q3 2025 were $5,110.0 million, compared to $5,238.4 million in Q3 2024, representing a decrease of 2.4%[172]. - Net income in the Marketing segment for the nine months ended September 30, 2025 decreased by $6.4 million compared to the same period in 2024[184]. - Net cash provided by operating activities was $568.4 million for the nine months ended September 30, 2025, a decrease of $30.5 million, or 5.1%, compared to the same period in 2024[196]. Revenue and Sales - Total fuel contribution in Q3 2025 was 30.7 cents per gallon, down from 32.6 cents per gallon in Q3 2024, with retail fuel margin dollars decreasing by 10.4%[149]. - Total fuel contribution for Q3 2025 was $384.8 million, down from $404.2 million in Q3 2024, a decline of 4.3%[176]. - Total merchandise contribution increased to $241.2 million in Q3 2025, up from $216.8 million in Q3 2024, an increase of 11.8%[177]. - Retail fuel volume for the chain in Q3 2025 was 1,254.3 million gallons, compared to 1,239.3 million gallons in Q3 2024, an increase of 1.2%[176]. - Merchandise sales for Q3 2025 were $1,122.3 million, slightly up from $1,082.4 million in Q3 2024, an increase of 3.7%[177]. - Total merchandise contribution increased by 4.9% year-to-date 2025 compared to the same period of 2024, primarily due to favorable sales mix and higher retail prices[186]. - Total fuel contribution for the nine-month period ended September 30, 2025 was $1.1 billion, a decrease of $15.5 million, or 1.4%, compared to the first nine months of 2024[185]. Expenses and Costs - SG&A expenses for the first nine months of 2025 decreased by $14.9 million, or 8.2%, compared to the same period in 2024, primarily due to lower professional fees and employee-related costs[168]. - Store and other operating expenses increased by $29.1 million, or 3.6%, year-to-date compared to the same period in 2024, primarily due to increases in net new store operating expenses[167]. - The company reported lower SG&A expenses in Q3 2025, contributing to the overall decrease in operating expenses[173]. - Total operating expenses for the marketing segment in Q3 2025 were $4,889.2 million, down from $5,012.2 million in Q3 2024, a decrease of 2.5%[174]. Capital Expenditures and Debt - The company anticipates total capital expenditures for the full year 2025 to range from approximately $450 million to $500 million, depending on new store construction activity[152]. - The company plans to fund its capital program in 2025 primarily using operating cash flow, supplemented by borrowings under its revolving credit facility as necessary[153]. - As of September 30, 2025, total long-term debt was $2,223.0 million, an increase from $1,832.7 million as of December 31, 2024, representing a growth of approximately 21.3%[204]. - The company issued $600 million of senior secured term loans in April 2025, with an outstanding balance of $600 million as of September 30, 2025, compared to $386 million prior to refinancing[211]. - The company spent $132.5 million on capital investments in the three months ended September 30, 2025, compared to $146.9 million in the same period of 2024, a decrease of approximately 9.5%[221]. - The company’s marketing capital spending for company stores was $106.3 million for the three months ended September 30, 2025, down from $111.4 million in 2024[221]. Market Risks and Derivatives - The company is exposed to market risks related to the volatility in the price of refined products, primarily gasoline and diesel, which can affect revenues and operating costs[225]. - As of September 30, 2025, the company had short-term commodity derivative contracts in place to hedge the purchase price of refined products, with a 10% change in benchmark prices being immaterial to the company[226]. - The company makes limited use of derivative instruments for risk management, which is monitored by senior management[225]. - Interest rate swaps are used to hedge a portion of the company's exposure to interest rate movements[227]. - A 10% increase or decrease in interest rates would have an immaterial impact on the company's financial statements as of September 30, 2025[227]. - Changes in the fair value of derivative contracts generally offset changes in the value for an equivalent volume of the underlying products[226].

Financial Data and Key Metrics Changes - Third quarter EBITDA was $285 million, virtually flat compared to the prior year despite all-in margins running about $0.02 lower [17][10] - Merchandise contribution dollars were up $24.4 million or 11.2% in Q3, driven by strong performance in nicotine categories and center store categories [20][23] - The company expects to tighten its full-year merchandise contribution guidance to between $870 million and $875 million [30] Business Line Data and Key Metrics Changes - Fuel performance showed average per store month volumes down 1.8% in Q3, with all-in margins of $0.307, including retail margins of $0.283 [18][19] - Nicotine promotional dollars have grown at a 12% CAGR since 2020, contributing significantly to merchandise performance [12][22] - QuickChek reported its fourth consecutive quarter of same-store food and beverage sales growth, with total center store categories growing by 5% [13][23] Market Data and Key Metrics Changes - The company described the current fuel market as a low price, long supply, and low volatility environment, which is challenging for an EDLP fuels retailer [10][11] - Average per store month volumes for fuel are projected to be between 235,000 to 237,000 gallons for the full year, below the original guidance range [30] Company Strategy and Development Direction - The company remains committed to a 50:50 capital allocation strategy, balancing growth and share repurchase [17][26] - A new $2 billion share repurchase program has been authorized, alongside a commitment to increase dividends by 10% annually [9][26] - The company plans to open over 45 new stores in 2025, with a strong pipeline supporting 50+ stores in 2026 and beyond [13][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate through challenging market conditions, emphasizing the importance of operational efficiencies [25][31] - The company anticipates that the current low price environment will eventually normalize, leading to improved margins [11][19] - Preliminary October results indicate strong fundamentals, with average per store month volumes running at 98% of the prior year [27][28] Other Important Information - The CEO announced his retirement, with a planned transition to the new CEO, Mindy West, effective January 1, 2026 [5][7] - The company has completed an organizational restructuring aimed at streamlining workflows and processes [32] Q&A Session Summary Question: Fuel margins and investment to drive volume - Management noted that fuel margins remained strong at $0.30 all-in, despite a low price environment, and emphasized the need for strategic investments to drive traffic [38][40] Question: Impact of ZYN promotion - The ZYN promotion was highlighted as a significant contributor to performance, showcasing the company's ability to execute for vendor partners and drive traffic [41][42] Question: Merchandise contribution guidance - The increase in merchandise contribution guidance was attributed to the ZYN promotion and overall strength in center store categories, with nicotine pouch volumes growing significantly [47][48] Question: Capital allocation and growth - Management reiterated the commitment to a balanced capital allocation strategy, emphasizing that the dividend increase does not compromise growth opportunities [50][55] Question: Cost management opportunities - Management indicated that while the recent restructuring was a one-time reset, there are ongoing opportunities for cost optimization and efficiency improvements [73][75]

This story was originally published on C-Store Dive. To receive daily news and insights, subscribe to our free daily C-Store Dive newsletter. Dive Brief: Murphy USA has appointed Mindy West, current chief operating officer, as its next president and CEO, effective Jan. 1, 2026, the convenience retailer announced Wednesday evening. West will add president to her resume immediately while her transition to CEO will occur next year. She will also become a member of Murphy’s board of directors in January, ac ...

Core Viewpoint - Murphy USA (MUSA) shares have underperformed over the past year, losing 18% of their value due to concerns about slowing discretionary spending at its convenience stores [1] Financial Performance - The company reported mixed Q3 results, indicating ongoing challenges in its operations [1]

Core Insights - Murphy USA reported revenue of $5.11 billion for the quarter ended September 2025, a decrease of 2.5% year-over-year, while EPS increased to $7.25 from $7.20 in the previous year [1] - The revenue fell short of the Zacks Consensus Estimate of $5.13 billion, resulting in a surprise of -0.44%, whereas the EPS exceeded expectations with a surprise of +9.85% against a consensus estimate of $6.60 [1] Financial Performance Metrics - Total fuel contribution was 30.7 cents per gallon, surpassing the average estimate of 29.64 cents from two analysts [4] - PS&W including RINs contribution was 2.4 cents, significantly better than the estimated -0.67 cents [4] - Retail fuel margin was reported at 28.3 cents, lower than the average estimate of 30.31 cents [4] - Retail fuel volume reached 1,254.30 million gallons, exceeding the estimate of 1,232.83 million gallons [4] - Operating revenues from petroleum product sales were $3.92 billion, below the average estimate of $3.97 billion, reflecting a year-over-year decline of 4.8% [4] - Other operating revenues were reported at $63 million, significantly higher than the estimated $38.4 million, marking an increase of 81.6% year-over-year [4] - Merchandise sales amounted to $1.12 billion, slightly below the average estimate of $1.13 billion, with a year-over-year increase of 3.7% [4] Stock Performance - Murphy USA's shares returned +2.1% over the past month, underperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Core Insights - Murphy USA reported quarterly earnings of $7.25 per share, exceeding the Zacks Consensus Estimate of $6.6 per share, and showing a slight increase from $7.2 per share a year ago, resulting in an earnings surprise of +9.85% [1] - The company generated revenues of $5.11 billion for the quarter ended September 2025, which fell short of the Zacks Consensus Estimate by 0.44% and decreased from $5.24 billion year-over-year [2] - Murphy USA has surpassed consensus EPS estimates three times over the last four quarters but has not beaten revenue estimates during the same period [2] Future Outlook - The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $6.46 on revenues of $4.94 billion, while for the current fiscal year, it is $23.18 on revenues of $19.61 billion [7] - The estimate revisions trend for Murphy USA was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Retail - Convenience Stores industry, to which Murphy USA belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a relatively strong position within the market [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income for Q3 2025 was $129.9 million, or $6.76 per diluted share, down from $149.2 million, or $7.20 per diluted share in Q3 2024, impacted by a $12.6 million restructuring charge[4] - Total operating revenues for Q3 2025 were reported at $5,110 million, compared to $5,238.5 million in Q3 2024, reflecting a decrease[26] - Net income for Q3 2025 was $129.9 million, down from $149.2 million in Q3 2024, resulting in diluted earnings per share of $6.76 compared to $7.20[26] - EBITDA for Q3 2025 was $272.3 million, down 4.6% from $284.9 million in Q3 2024[39] - Cash provided by operating activities for Q3 2025 was $184.8 million, compared to $202.1 million in Q3 2024, reflecting a decrease of 8.1%[36] - Net income for Q3 2025 was $129.9 million, a decrease of 12.8% compared to $149.2 million in Q3 2024[36] Sales and Revenue - Total retail gallons increased by 1.2%, while same store sales (SSS) volumes declined by 2.6% in Q3 2025 compared to Q3 2024[4] - Merchandise contribution dollars rose by 11.3% to $241.2 million, with average unit margins increasing to 21.5% from 20.0% in Q3 2024[4] - Total merchandise sales revenue for same store sales increased by 0.7% to $214.1 million for the three months ended September 30, 2025, compared to $211.4 million in the same period of 2024[29] - The merchandise margin for the three months ended September 30, 2025, was 8.3%, compared to 8.4% in the same period of 2024[29] - The company reported a decrease in petroleum product sales to $3,924.7 million for the three months ended September 30, 2025, down from $4,121.4 million in the same period of 2024[28] Expenses and Costs - Total store and other operating expenses increased by $9.8 million in Q3 2025, mainly due to higher employee-related expenses and maintenance costs[10] - Retail fuel margins were 28.3 cents per gallon, an 11.3% decrease compared to the prior-year quarter[7] - Total fuel contribution for Q3 2025 was $384.8 million, a decrease of $19.4 million, or 4.8%, compared to Q3 2024, primarily due to lower fuel contribution margins[7] - Depreciation and amortization increased to $69.9 million in Q3 2025 from $62.8 million in Q3 2024, representing an increase of 17.9%[39] Capital and Investments - The company repurchased approximately 569.4 thousand common shares for $221.4 million at an average price of $388.80 per share during Q3 2025[4] - The company is currently constructing 39 new stores and has 2 raze-and-rebuild projects underway, which are expected to generate operational momentum heading into 2026[5] - Capital expenditures remain on track within the original guidance range of $450 million to $500 million as the company completes its 2025 build programs[20] - The company has acquired 4 locations in the Denver market, expected to reopen as Murphy USA locations before year-end 2025[16] Guidance and Projections - The updated guidance for 2025 includes organic growth with new store openings adjusted to 45 or more, down from up to 50, and raze-and-rebuilds revised to 23 to 24 from up to 30[16] - Retail fuel volume per store is now expected to be between 235 to 237 thousand gallons, down from the original range of 240 to 245 thousand gallons[16] - Merchandise contribution is projected to be between $870 million to $875 million, slightly increased from the previous range of $855 million to $875 million[16] - Store operating expenses (OPEX) are revised to a range of $36.2k to $36.6k per store, down from $36.5k to $37.0k[19] - SG&A costs are forecasted to be between $230 million to $240 million for the full year, reduced from the previous guidance of $245 million to $255 million[19] - The effective tax rate is now expected to be between 23.5% and 24.5%, lowered due to discrete state tax refunds and federal energy tax credits[20] Debt and Liabilities - The company had cash and cash equivalents of $42.8 million and long-term debt of $2.223 billion as of September 30, 2025[12] - Long-term debt, including capitalized lease obligations, increased to $2,223.0 million as of September 30, 2025, compared to $1,832.7 million as of December 31, 2024[34] - Total liabilities increased to $4,130.6 million as of September 30, 2025, from $3,701.5 million as of December 31, 2024[34] - Total debt borrowings in Q3 2025 amounted to $746.9 million, significantly higher than $225.0 million in Q3 2024[36] Cash Flow - The company reported a net cash outflow from investing activities of $116.9 million in Q3 2025, compared to an outflow of $131.5 million in Q3 2024[36] - Cash, cash equivalents, and restricted cash at the end of Q3 2025 totaled $42.8 million, down from $52.5 million at the end of Q3 2024[36] - The company experienced a net decrease in noncash operating working capital of $63.3 million in Q3 2025, compared to a decrease of $23.8 million in Q3 2024[36]