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Group 1 - Murphy USA's shares have declined by 15% over the past year due to concerns regarding consumer spending at its convenience stores [1] - The company has been a disappointing performer in the market, reflecting broader economic challenges [1] Group 2 - The analysis indicates a contrarian investment approach based on macroeconomic views and stock-specific turnaround stories [1]

Motor fuel retailer Murphy USA Inc. (MUSA) announced first-quarter 2025 earnings per share of $2.63, which missed the Zacks Consensus Estimate of $3.87 and compared unfavorably with the year-ago profit of $3.12. The underperformance was primarily due to lower-than-expected petroleum product sales.Murphy USA’s operating revenues of $4.5 billion fell 6.6% year over year and missed the consensus mark by $241 million.Revenues from petroleum product sales came in at $3.5 billion, well below our estimate of $3.7 ...

Financial Performance - For Q1 2025, the company reported net income of $53.2 million, or $2.63 per diluted share, on revenue of $4.5 billion, compared to net income of $66.0 million, or $3.12 per diluted share, on revenue of $4.8 billion in Q1 2024[155]. - Revenues for Q1 2025 decreased by $0.3 billion, or 6.6%, primarily due to a 6.0% decline in retail fuel sales prices and a decrease in fuel sales volumes[156]. - Net income in Q1 2025 decreased by $6.4 million to $79.1 million compared to Q1 2024, primarily due to higher store operating expenses and depreciation[170]. - EBITDA for Q1 2025 was $155.6 million, down from $164.3 million in Q1 2024, reflecting the decrease in net income and increased depreciation[178]. Fuel and Merchandise Sales - Total fuel contribution was 25.4 cents per gallon in Q1 2025, up from 24.8 cents per gallon in Q1 2024, while retail fuel volumes decreased by 1.9%[146]. - Total fuel contribution for Q1 2025 was $287.3 million, an increase of $1.2 million or 0.4% from Q1 2024, driven by higher retail fuel contribution despite lower fuel volumes sold[171]. - Total merchandise sales were approximately $999.4 million in Q1 2025, a decrease of $1.3 million compared to Q1 2024, while total merchandise contribution improved by 2.2%[172]. - Retail fuel margins increased by 9.2% to 23.7 cents per gallon in Q1 2025 compared to 21.7 cents per gallon in Q1 2024[171]. Operating Expenses - Store and other operating expenses increased by $14.0 million, or 5.6%, in Q1 2025, primarily due to higher employee-related expenses and maintenance costs[157]. - SG&A expenses in Q1 2025 were $2.0 million lower than in Q1 2024, mainly due to reduced professional fees and employee-related costs[174]. Capital Expenditures and Financing - The company anticipates total capital expenditures for the full year 2025 to range from approximately $450 million to $500 million, primarily funded through operating cash flow[149]. - Cash required by investing activities increased to $87.7 million in Q1 2025 from $74.9 million in Q1 2024, primarily due to higher capital expenditures[183]. - Financing activities in Q1 2025 required cash of $38.4 million, a decrease of $83.8 million from $122.2 million in Q1 2024, with share repurchases increasing to $150.0 million from $86.4 million[184]. Debt and Interest Rates - As of March 31, 2025, total long-term debt was $1,974.2 million, up from $1,832.7 million at December 31, 2024[188]. - The company has a senior secured term loan of $600 million and a revolving credit facility of $750 million as part of its credit agreement[194]. - The effective interest rate for the term loan was 6.21% as of March 31, 2025, down from 6.44% at December 31, 2024[188]. - A 10% increase or decrease in interest rates would have an immaterial impact on the company's financial statements as of March 31, 2025[209]. Dividends - Cash dividend payments increased to $0.49 per share totaling $9.8 million in Q1 2025, up from $0.42 per share totaling $8.8 million in Q1 2024, with a targeted double-digit growth in dividends over time[185]. - The Board of Directors declared a quarterly cash dividend of $0.50 per share, annualized to $2.00, payable on June 2, 2025[186]. Market Risks and Hedging - The company is exposed to market risks related to the volatility in the price of refined products, which can affect revenues and operating costs[207]. - As of March 31, 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[208]. - The company utilizes limited interest rate swaps to hedge a portion of its exposure to interest rate fluctuations[209]. - The acquisition of interest rate derivatives is managed by senior management with delegated authority from the Board level committee[209].

Murphy USA (MUSA) Q1 2025 Earnings Call May 08, 2025 11:00 AM ET Company Participants Christian Pikul - Vice President of Investor Relations & FP&AAndrew Clyde - President, CEO & DirectorGalagher Jeff - Executive VP & CFOCorey Tarlowe - SVP - Equity ResearchBonnie Herzog - Managing Director Pooran Sharma - Managing DirectorMindy West - Executive VP & COOJacob Aiken-Phillips - Vice PresidentBobby Griffin - Managing Director Conference Call Participants Anthony Bonadio - AnalystBradley Thomas - Managing Direc ...

Financial Data and Key Metrics Changes - The first quarter results reflected a same store gallon decline of 4.2%, impacted by temporal factors such as the non-repeating leap year and storms, accounting for almost half of the decline [8][10] - Retail margins were $0.02 per gallon higher in Q1 compared to the prior year, with retail margins in the Northeast Region up about $0.45 [10][11] - Cash flow from operations was $129 million in Q1, with total cash capital expenditure of $88 million, resulting in free cash flow of $41 million [24] Business Line Data and Key Metrics Changes - Inside store sales were impacted by a 30 basis point headwind due to the absence of a $1 billion jackpot from the previous year, but candy sales were up 15% year-on-year [13][15] - The nicotine category saw a total nicotine contribution margin increase of 2.8% on a same store basis in Q1, with non-combustible nicotine products up over 7% [15][16] - Food and beverage sales at QuickChek were up nearly 1% in the quarter, driven by menu innovation and targeted promotions [16] Market Data and Key Metrics Changes - The company noted a shift in customer demographics, with growth in middle to high-income customers now representing almost half of the loyalty program membership base [19] - The loyalty programs, Murphy Drive Rewards and QuickChek Rewards, saw membership growth of 1130% in Q1, indicating a shift towards value-seeking behavior among consumers [18][19] Company Strategy and Development Direction - The company is focused on enhancing store productivity and growth through new store openings, raze and rebuilds, and remodeling activities [28] - The capital structure was strengthened with an increase in the revolving credit facility from $350 million to $750 million, allowing for greater flexibility in executing long-term strategies [23] - The company plans for supply margins to normalize in the second half of 2025, anticipating a return to a more balanced supply-demand environment [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model, stating it is inflation-proof and recession-resistant, with a focus on value-oriented customers [5][28] - The company does not foresee pulling back on second-half guidance due to tariffs or supply chain uncertainties, indicating a stable outlook [27] - Management highlighted that the hard data shows a resilient customer base, with lower-income consumers still spending on non-discretionary products [20] Other Important Information - The effective income tax rate for Q1 was 14.1%, lower than the previous year's 19.4%, due to energy tax credits and share-based compensation benefits [24] - The company added eight new stores in Q1, with ongoing construction of 18 new stores and 20 raze and rebuilds [22] Q&A Session Summary Question: Trends in Inside Sales - Management noted that non-nicotine categories showed improvement due to digital pricing and promotional effectiveness, while nicotine sales were impacted by a lighter promotional cycle in Q1 [32] Question: Update on Retail Margins - Retail margins in April were $0.28 per gallon, with the marginal retailer facing similar cost headwinds, indicating a structural increase in margins [34] Question: Growth in Middle and High-Income Customers - The increase in higher-income customers is attributed to a broader recognition of the need for value, with similar purchasing behavior across income cohorts [40] Question: In-Store Sales Momentum - QuickChek's food and beverage sales momentum is expected to continue, with promotional intensity remaining competitive throughout the year [44] Question: Operating Expenses and Store Performance - The company is seeing a record number of applications for staff positions, which is positively impacting operating expenses and store performance [72]

For the quarter ended March 2025, Murphy USA (MUSA) reported revenue of $4.53 billion, down 6.6% over the same period last year. EPS came in at $2.63, compared to $3.12 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $4.77 billion, representing a surprise of -5.05%. The company delivered an EPS surprise of -32.04%, with the consensus EPS estimate being $3.87.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street e ...

Core Viewpoint - Murphy USA reported quarterly earnings of $2.63 per share, missing the Zacks Consensus Estimate of $3.87 per share, representing a -32.04% earnings surprise [1] - The company posted revenues of $4.53 billion for the quarter, missing the Zacks Consensus Estimate by 5.05% and down from $4.84 billion a year ago [2] Group 1: Earnings Performance - The earnings for the previous year were $3.12 per share, indicating a decline in earnings year-over-year [1] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Group 2: Revenue Performance - The company has not been able to beat consensus revenue estimates over the last four quarters [2] - The current consensus EPS estimate for the coming quarter is $7.39 on $5.42 billion in revenues, and for the current fiscal year, it is $25.61 on $20.77 billion in revenues [7] Group 3: Market Performance - Murphy USA shares have added about 0.2% since the beginning of the year, while the S&P 500 has declined by -4.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 4: Industry Outlook - The Retail - Convenience Stores industry is currently in the top 39% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Exhibit 99.1 Murphy USA Inc. Reports First Quarter 2025 Results El Dorado, Arkansas, May 7, 2025 (BUSINESS WIRE) – Murphy USA Inc. (NYSE: MUSA), a leading marketer of retail motor fuel products and convenience merchandise, today announced financial results for the three months ended March 31, 2025. Key Highlights: "Murphy USA's Q1 results fell slightly short of internal expectations, but all in all, the business performed admirably despite a 2% comparison headwind from temporal factors including the timing ...

The retail sector is highly competitive, with companies constantly trying to capture customer loyalty. Murphy USA (MUSA) , part of the Zacks Retail - Convenience Stores industry, has set itself apart through a high-volume, low-cost operating model. This approach helps it stay profitable even when margins are tight. A major strength lies in its ownership of over 90% of its fuel stations, which helps keep operating costs low — a key advantage in a low-margin business.Fueling Success Through Walmart Partnershi ...