Core Viewpoint - Market sell-offs create opportunities for investors to acquire stocks at discounted prices, including steady dividend stocks like Murphy USA, which has seen a significant decline in share price despite strong operational performance [1][2]. Group 1: Company Overview - Murphy USA is the fourth-largest convenience store chain in the U.S., operating over 1,760 stores across 27 states and serving approximately 2 million customers daily [4]. - The company has been a strong performer since its market debut in 2013, achieving an 11-bagger return for investors [2]. Group 2: Operational Strengths - Despite a 22% decline in share price, Murphy USA's operations remain robust, with a focus on low prices and a strategic location adjacent to Walmart stores [5][6]. - The company has outperformed the U.S. fuel sales growth rate, achieving a 14% annual growth in gallons sold since 2013, compared to the 4% national average [7]. Group 3: Growth Strategy - Murphy USA plans to open 50 new stores annually and convert 30 kiosk stores into larger formats, resulting in a 4% annualized store count growth [8]. - The company has increased its gross profit margins from 5% in 2013 to 11% today, supported by a significant stock buyback program [8]. Group 4: Financial Performance - Management has reduced the outstanding shares by 57% since 2013, significantly boosting per-share financial metrics, including a tenfold increase in free cash flow per share [9][10]. - Murphy USA trades at a price-to-free cash flow (P/FCF) ratio of 23, which is below the S&P 500 average of around 32, indicating a submarket valuation despite historical outperformance [11][12]. Group 5: Dividend Growth - The company has increased its dividend for 12 consecutive quarters, nearly doubling its payments since 2021, with a current yield of 0.4% that utilizes only 9% of its free cash flow [14][15]. - This growing dividend serves as an additional method to reward shareholders alongside stock buybacks [15]. Group 6: Overall Assessment - Murphy USA is positioned as a staple goods provider with consistent cash flows, allocating half of its cash to new store growth and the other half to shareholder returns through buybacks and dividends [16].

Core Viewpoint - Murphy USA's recent earnings report shows a mixed performance, with strong merchandise sales but declining petroleum product sales, leading to a decrease in overall revenues and profit margins [2][3][4]. Financial Performance - The company reported Q4 2024 earnings per share of $6.96, exceeding the Zacks Consensus Estimate of $6.43, but down from $7 in the previous year due to weak petroleum sales [2]. - Operating revenues were $4.7 billion, a 7.1% decline year over year, missing the consensus estimate by $169 million [2]. - Petroleum product sales were $3.6 billion, down 9.6% from Q4 2023 and below the estimated $4.1 billion [3]. Sales Contribution - Total fuel contribution decreased by 1% year over year to $389.1 million, with retail fuel margins contracting [4]. - Retail fuel contribution fell 8% year over year to $345.8 million, with margins narrowing to 28.9 cents per gallon from 31.1 cents [5]. - Merchandise sales increased by 3.2% year over year to $1.1 billion, with a contribution of $208.8 million, up 5.6% due to higher sales and improved unit margins [3][6]. Operational Metrics - Retail gallons sold declined by 1% year over year to 1,196.8 million, missing estimates [5]. - Monthly fuel gallons fell 2.4% from the prior year, while merchandise sales increased by 2% on a per store basis [7]. Balance Sheet - As of December 31, the company had cash and cash equivalents of $47 million and long-term debt of $1.8 billion, with a debt-to-capitalization ratio of 68.6% [8]. - The company repurchased shares worth $126.2 million during the quarter [8]. Market Sentiment - There has been a downward trend in estimates, with a consensus estimate shift of -14.37% in the past month [9]. - Murphy USA holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [12]. Investment Scores - The company has a strong Growth Score of A but a low Momentum Score of F, with an overall VGM Score of A, placing it in the top quintile for value investment strategy [11].

Core Points - Murphy USA Inc. is celebrating the five-year anniversary of its partnership with Boys & Girls Clubs of America through the 'Great Futures Fueled Here' campaign, which has raised over $11 million since its inception in 2020 [1][3][4] - The 2025 customer round-up campaign will run from March 5 to April 30, 2025, across 27 states, allowing customers to round up their purchases or donate directly to support local youth [2][4] - The partnership has significantly impacted young people's lives, with initiatives like the Back-to-School Prep-Rally in 2024, focusing on goal-setting and STEM activities [3][4] Company Overview - Murphy USA operates more than 1,750 stores primarily in the Southwest, Southeast, Midwest, and Northeast United States, serving approximately two million customers daily [6] - The company ranks 214 among Fortune 500 companies and employs around 17,200 people [6]

Retail Operations - The company sold approximately 4.8 billion gallons of motor fuel through its retail outlets in 2024[33]. - As of December 31, 2024, the company operated a total of 1,757 retail stores, with 368 located in Texas and 136 in New Jersey[34]. - As of December 31, 2024, the total number of branded retail outlets increased to 1,757 from 1,733 in 2023, with Murphy USA and Murphy Express outlets at 1,601[41]. - The company operates with a low-cost retail model, with 75% of its stores located on company-owned property, minimizing rent expenses[20]. - The company utilizes a standard POS system across all stores, enhancing operational efficiency and supporting third-party delivery services[48][50]. Financial Performance - The company repurchased approximately $446.6 million worth of common shares in 2024, with a total of $3.5 billion repurchased over the past eleven years[23]. - The quarterly dividend was raised four times in 2024, increasing from $0.41 per share in Q4 2023 to $0.48 per share, resulting in an annualized dividend of $1.92 per share[23]. - Total fuel contribution per gallon decreased to 30.5 cents from 31.4 cents in 2023, while retail fuel margin per gallon increased slightly to 28.1 cents from 27.6 cents[41]. - Merchandise sales revenue per store per month rose to $204.3 thousand in 2024, up from $199.1 thousand in 2023, with merchandise margin at 19.8%[41]. - Murphy USA's floating rate term loan amounts to $386.0 million, with an additional $56.0 million outstanding on its revolving credit facility as of December 31, 2024[266]. Growth and Expansion - The company plans to build up to 50 new NTI locations and 30 raze-and-rebuild stores in 2025, targeting at least 50 NTI and 30 raze-and-rebuilds annually in future periods[26]. - The company aims to enhance its merchandise mix by developing higher-margin non-nicotine sales and expanding food and beverage capabilities[27]. - The company expects to maintain a disciplined capital expenditure program focused on organic growth, supported by a strong cash position and credit availability[22]. Employee and Human Capital - The company has approximately 17,200 employees as of December 31, 2024, contributing to its sustainable business model and organic growth opportunities[24]. - As of December 31, 2024, Murphy USA employed approximately 17,200 individuals, including 5,900 full-time and 11,300 part-time employees[63]. - The company has consolidated virtually all QuickChek benefit programs with its own, ensuring competitive benefit packages for all eligible employees starting in 2025[68]. - The company is committed to employee development through various initiatives, including mentorship programs and tuition reimbursement[69]. - Murphy USA's human capital management is driven by core principles of Integrity, Respect, Citizenship, and Spirit[65]. Market and Regulatory Environment - The retail gasoline industry is highly competitive, with significant competition from non-traditional retailers, impacting market share and pricing strategies[42][44]. - Consumer demand for motor fuel typically increases during the summer driving season, affecting revenues and sales volumes, which are generally higher in the second and third quarters[46]. - The company faces regulatory challenges related to environmental laws, which may increase operational costs and compliance requirements[52][58]. - The company is subject to stringent fuel economy standards and GHG emission regulations, which could adversely impact demand for its products[54][56]. - The company actively monitors changes in labor laws to ensure compliance and manage potential increases in labor costs[62]. Safety and Risk Management - The company emphasizes a strong safety culture, focusing on employee roles in identifying and mitigating safety risks[69]. - The company utilizes limited derivative instruments to manage commodity price risks, with a 10% change in benchmark prices having an immaterial impact on financials[265]. - Interest rate fluctuations tied to SOFR can affect the company's interest expenses, but a 10% change would also have an immaterial impact on financial statements[266].

Company Performance - Murphy USA Inc. reported fourth-quarter 2024 earnings per share of $6.96, exceeding the Zacks Consensus Estimate of $6.43, primarily driven by strong merchandise sales [1] - The company's operating revenues were $4.7 billion, a decrease of 7.1% year over year, missing the consensus mark by $169 million [2] - Revenues from petroleum product sales were $3.6 billion, down 9.6% from the fourth quarter of 2023 and below the estimate of $4.1 billion [2] Fuel Contribution - Total fuel contribution fell 1% year over year to $389.1 million, with a retail fuel margin of 32.5 cents per gallon, unchanged from the previous year [3] - Retail fuel contribution decreased 8% year over year to $345.8 million, with margins narrowing to 28.9 cents per gallon from 31.1 cents in the corresponding period of 2023 [4] - Retail gallons declined 1% year over year to 1,196.8 million, missing the estimate of 1,210 million [4] Merchandise Sales - Contribution from merchandise increased 5.6% to $208.8 million, supported by higher sales and an increase in unit margins from 19.4% to 19.9% [5] - On a same-store sales (SSS) basis, total merchandise contribution rose 2.4% year over year, primarily due to a 4.7% increase in nicotine margins [5] Balance Sheet - As of December 31, Murphy USA had cash and cash equivalents of $47 million and long-term debt of $1.8 billion, with a debt-to-capitalization ratio of 68.6% [7] - The company opened 22 new retail locations and closed five, bringing the total store count to 1,757 [7] - During the quarter, Murphy USA repurchased shares worth $126.2 million [7]

Financial Data and Key Metrics Changes - The company reported over $1 billion in EBITDA for 2024, indicating sustainable earnings potential [7] - Retail margins improved by 50 basis points to $0.281 per gallon despite challenging market conditions [11] - Operating expenses per store month increased by 5.2% in 2024, driven by new larger stores [24][25] Business Line Data and Key Metrics Changes - Merchandise contribution dollars reached $834 million in 2024, up 3.8% from 2023, with a notable increase in the fourth quarter [22] - QuickCheck Markets faced pressure from food inflation and competition, impacting their performance [9][23] - The Murphy branded network saw per store merchandise sales grow by 3.5% and margin dollars by 5.9% for the full year [11] Market Data and Key Metrics Changes - The company sold approximately 4 billion gallons of fuel in 2014, growing to nearly 5 billion gallons by 2024, representing a 21% increase [20] - Average fuel volumes per store month in 2024 were 240.6 thousand gallons, at the low end of guidance [16] - The company expects to sell just over 5 billion gallons of fuel in 2025, a 4.5% increase from 2024 [19] Company Strategy and Development Direction - The company plans to accelerate its new store program, targeting up to 50 new stores in 2025 [15] - A balanced capital allocation strategy focusing on store growth and share repurchase has been emphasized [31][32] - The company aims to enhance store performance through initiatives like fuel dispenser health improvements [98] Management's Comments on Operating Environment and Future Outlook - Management acknowledged 2024 as a disappointing year due to various challenges, including rising prices and severe weather [8][9] - The company remains optimistic about long-term demand stability and margin growth potential [12] - Management expects continued pressure on QuickCheck Markets but anticipates strong performance in core merchandise categories [23][24] Other Important Information - Total capital spending in 2024 was over $500 million, with a similar level expected for 2025 [29][30] - The company repurchased approximately 938 thousand shares in 2024, reflecting a commitment to shareholder value [31][32] Q&A Session Summary Question: What drove the non-nicotine category to flip positive in the quarter? - Strong performance in Murphy stores with double-digit growth in several categories attributed to digital transformation initiatives [44] Question: Can you walk us through the implied non-nicotine gross margins decline despite better sales? - The gap between sales growth and margin growth is primarily due to how lotto and lottery are reported [48] Question: What are your thoughts on the buyback versus balance sheet leverage? - The company maintains a 50/50 balanced capital allocation approach and can leverage up as earnings power grows [56] Question: Can you discuss the CapEx guidance for 2025? - CapEx for 2025 is expected to be around $500 million, with a shift from raise and rebuilds to new store openings [62] Question: What discussions are you having with vendors regarding promotional support in 2025? - The company values high volumes per store, which positions it well for discussions with vendors [68] Question: What are your expectations for the performance of new stores? - New stores have shown high performance metrics, and the company is focused on making up for missed expectations in future years [86]

Core Insights - Murphy USA reported a revenue of $4.71 billion for the quarter ended December 2024, reflecting a decrease of 7.1% year-over-year and falling short of the Zacks Consensus Estimate of $4.88 billion, resulting in a surprise of -3.45% [1] - The company's EPS was $6.96, slightly down from $7.00 in the same quarter last year, but exceeded the consensus EPS estimate of $6.43 by 8.24% [1] Financial Performance Metrics - Total fuel contribution was 32.5 cents per gallon, surpassing the three-analyst average estimate of 32.19 cents [4] - Retail fuel volume for the chain was reported at 1,196.8 million gallons, below the average estimate of 1,228.39 million gallons [4] - Retail fuel margin was 28.9 cents per gallon, lower than the three-analyst average estimate of 30.56 cents [4] - Operating revenues from petroleum product sales were $3.62 billion, down 9.6% year-over-year and below the average estimate of $4.03 billion [4] - Merchandise sales generated $1.05 billion, representing a year-over-year increase of 3.2%, but also below the average estimate of $1.08 billion [4] - Other operating revenues were reported at $40.90 million, a decrease of 17.5% year-over-year, compared to the average estimate of $42.10 million [4] Stock Performance - Murphy USA's shares have returned +3.5% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

分组1 - Murphy USA reported quarterly earnings of $6.96 per share, exceeding the Zacks Consensus Estimate of $6.43 per share, but down from $7 per share a year ago, representing an earnings surprise of 8.24% [1] - The company posted revenues of $4.71 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3.45% and down from $5.07 billion year-over-year [2] - Over the last four quarters, Murphy USA has surpassed consensus EPS estimates three times but has not beaten consensus revenue estimates [2] 分组2 - The stock's immediate price movement will depend on management's commentary on the earnings call and the sustainability of earnings expectations [3][4] - Murphy USA shares have increased by approximately 1.7% since the beginning of the year, compared to a 2.7% gain for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $4.94 on revenues of $5.1 billion, and for the current fiscal year, it is $26.47 on revenues of $21.51 billion [7] 分组3 - The Zacks Industry Rank for Retail - Convenience Stores is currently in the top 8% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Murphy USA is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6]

Financial Performance - Net income for Q4 2024 was $142.5 million, or $6.96 per diluted share, compared to $150.0 million, or $7.00 per diluted share in Q4 2023[4] - For the full year 2024, net income was $502.5 million, or $24.11 per diluted share, down from $556.8 million, or $25.49 per diluted share in 2023[4] - Net income for Q4 2024 was $162.9 million, compared to $166.1 million in Q4 2023, reflecting a decline of 1.9%[28] - Net income for Q4 2024 was $142.5 million, a decrease of 5% from $150.0 million in Q4 2023[36] Revenue and Sales - Total operating revenues for Q4 2024 were $4.71 billion, compared to $5.07 billion in Q4 2023, reflecting a decrease in petroleum product sales[26] - Total operating revenues for Q4 2024 were $4,710.0 million, a decrease of 7.1% from $5,068.6 million in Q4 2023[28] - Total retail gallons decreased by 1.0% in Q4 2024, with same store sales (SSS) volumes declining by 2.8% compared to Q4 2023[4] - Same store sales for merchandise increased by 1.5% in Q4 2024 compared to the prior year, while nicotine sales rose by 1.6%[29] Expenses and Costs - Total store and other operating expenses increased by $12.3 million in Q4 2024 compared to Q4 2023, mainly due to higher employee-related expenses[11] - Merchandise cost of goods sold for Q4 2024 was $842.5 million, slightly up from $820.8 million in Q4 2023[28] - Depreciation and amortization expenses for Q4 2024 were $67.2 million, up from $57.0 million in Q4 2023[39] - The company incurred impairment of properties amounting to $8.2 million in Q4 2024, with no such charges in Q4 2023[39] Cash Flow and Investments - Total cash provided by operating activities for the twelve months ended December 31, 2024, was $847.6 million, compared to $784.0 million in 2023, reflecting an increase of 8%[36] - The company reported a net cash outflow from investing activities of $445.8 million for the twelve months ended December 31, 2024, compared to $323.6 million in 2023[36] - The net cash required by financing activities for the twelve months ended December 31, 2024, was $472.6 million, compared to $403.1 million in 2023[36] Shareholder Returns - The quarterly cash dividend paid on December 2, 2024, was $0.48 per share, representing a 6.7% increase from the previous quarter, totaling $9.7 million in cash payments[17] - The company repurchased approximately 239.7 thousand shares for $126.2 million at an average price of $526.61 per share in Q4 2024[4] - The company purchased treasury stock amounting to $128.0 million in Q4 2024, compared to $160.5 million in Q4 2023[36] Growth and Expansion - The company opened 32 new-to-industry (NTI) stores and completed 47 raze and rebuilds in 2024, with a focus on long-term growth opportunities[3] - For 2024, actual results included 32 new stores opened, exceeding the guidance range of 30-35, and 47 raze-and-rebuilds, above the guidance of more than 40[18] - The company expects 2025 guidance to include up to 50 new stores and up to 30 raze-and-rebuilds, indicating a commitment to higher growth levels[18] Future Projections - The company anticipates net income for 2025 to be between $474 million and $551 million, translating to expected Adjusted EBITDA between $1 billion and $1.12 billion[19] - The effective tax rate for 2025 is expected to be in the range of 23% to 25%[22] - Merchandise contribution for 2024 was $834 million, within the guidance range of $830 to $840 million, with expectations for 2025 to be between $855 million and $875 million[18] - Capital expenditures for 2024 were $503 million, within the guidance range of $500 to $525 million, with a projected range of $450 to $500 million for 2025[18] Assets and Liabilities - Total current assets decreased to $748.1 million in 2024 from $826.5 million in 2023, a decline of 9.5%[34] - Total assets increased to $4,541.6 million in 2024, up from $4,340.1 million in 2023, representing a growth of 4.6%[34] - Total liabilities rose to $3,701.5 million in 2024, compared to $3,511.2 million in 2023, an increase of 5.4%[34] - The store count at the end of the period remained stable at 1,757 stores, unchanged from the previous year[28] Margins - Merchandise contribution dollars for Q4 2024 increased by 5.6% to $208.8 million, with average unit margins of 19.9%[10] - Total fuel contribution dollars for Q4 2024 decreased by 1.0% to $389.1 million, primarily due to lower retail volumes sold[7] - Retail fuel margins for the full year 2024 were 28.1 cpg, a 1.8% increase compared to the prior year[8] - The company reported a merchandise margin of 2.4% for Q4 2024, an improvement from 2.7% in the same quarter last year[29]

Core Viewpoint - Murphy USA (MUSA) is expected to report fourth-quarter results on February 5, with earnings estimated at $6.43 per share and revenues at $5 billion, indicating a year-over-year decline in both metrics [1][4]. Financial Performance - In the previous quarter, MUSA reported earnings per share of $7.20, surpassing the Zacks Consensus Estimate of $6.64, although revenues of $5.2 billion fell short by 6.5% due to weak petroleum product sales [3]. - MUSA has beaten the Zacks Consensus Estimate for earnings in three of the last four quarters, with a recent upward revision of 2 cents (0.3%) for the upcoming quarter's earnings estimate [4]. Revenue and Sales Projections - The total fuel contribution for MUSA is projected to increase by 1.8% year over year to $400.1 million, driven by stronger retail profits [5]. - Petroleum product sales are expected to reach $4.1 billion, reflecting a 3.5% increase from the prior year's $4 billion, while merchandise sales are anticipated to grow to $1.1 billion from $1 billion in the same quarter last year [6]. Cost and Margin Considerations - The company's petroleum product costs are expected to rise by 3.8% year over year to $3.8 billion, which may impact the bottom line negatively [8]. - Fuel margins are projected to improve slightly to 33.1 cents per gallon from 32.5 cents in the fourth quarter of 2023 [5]. Earnings Expectations - The Zacks model indicates uncertainty regarding MUSA's ability to beat earnings estimates, with an Earnings ESP of -1.35% [10]. - MUSA currently holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook compared to other firms in the energy sector [11].