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]

Core Insights - Murphy USA has faced declining annual revenue for two consecutive years, with 2024 being described as disappointing by the outgoing CEO Andrew Clyde [3][6] - The company has implemented layoffs of approximately 100 corporate team members as part of efforts to enhance operational effectiveness [3] - Mindy West has been appointed as the new president and CEO, effective January 1, 2026, succeeding Andrew Clyde, who has been CEO since 2013 [6] Leadership Transition - Mindy West, who has been with Murphy since 1996 and has held various roles, including COO, will take on the role of president immediately and transition to CEO next year [4][6] - The board of directors expressed confidence in West's leadership abilities to drive the company forward and build on its strong foundation [5] - Andrew Clyde will remain with the company as a non-executive advisor until February 2027 to assist with the transition [5][6] Company Strategy and Challenges - Murphy USA is focusing on expanding its network across the U.S. while facing challenges such as revenue declines and corporate layoffs [3][6] - The company is investing heavily in new store development despite the recent operational challenges [6]

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]

Core Insights - Murphy USA Inc. reported a net income of $129.9 million, or $6.76 per diluted share, for Q3 2025, a decrease from $149.2 million, or $7.20 per diluted share, in Q3 2024 [1] Financial Performance - The company experienced a restructuring charge of $12.6 million in the quarter, which amounted to $9.5 million after-tax or $0.49 per diluted share [1]

Core Points - Murphy USA Inc. announced the appointment of Mindy K. West as President and Chief Executive Officer, effective January 1, 2026, succeeding Andrew Clyde, who will retire on December 31, 2025 [1][3][4] - The Board reaffirmed its 50/50 long-term capital allocation strategy, which includes a new share repurchase program and an increase in the quarterly cash dividend [2][5][7] Leadership Transition - Mindy K. West has been with Murphy USA since 1996 and has held various leadership roles, including Chief Operating Officer since February 2024 [3][4] - Andrew Clyde, the outgoing CEO, will remain with the company as a non-executive advisor until February 2027 to ensure a smooth transition [4][6] Capital Allocation Strategy - The Board approved a new share repurchase program of up to $2 billion, set to begin after the current $1.5 billion program is completed, of which $337 million remains [5][7] - A quarterly cash dividend of $0.63 per share was declared, reflecting a 19% increase from the previous quarter, with an annualized dividend of $2.52 [5][7] Growth and Reinvestment - The company plans to open 50 or more new-to-industry (NTI) locations annually, supported by a robust pipeline and recent acquisitions [8] - Management intends to increase reinvestment in existing locations starting in 2026, funded by tax benefits from recent legislation [8][9] Financial Position - Murphy USA aims to maintain a conservative balance sheet, targeting a long-term debt-to-earnings ratio of under 2.5x [9]