Murphy USA Q3 Earnings Top Estimates as Merchandise Shines

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]