Financial Data and Key Metrics Changes - The first quarter results reflect 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 [10][11] - Retail margins were $0.02 per gallon higher in the first quarter compared to the prior year, with margins not compressed during the normal cycle of rising prices [12][13] - 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 [26] Business Line Data and Key Metrics Changes - In the nicotine category, same-store sales for non-combustible products were up over 7% for the quarter, while total nicotine contribution margin increased by 2.8% on a same-store basis [17] - Merchandise sales were negatively impacted by a 30 basis point headwind due to the absence of a $1 billion jackpot from the previous year [15] - Sales in the candy category were up 15% year-over-year, indicating strong performance in certain center store categories [15][18] Market Data and Key Metrics Changes - The retail price of fuel averaged between $2.75 and $2.80 per gallon, significantly lower than previous years, affecting customer behavior and loyalty [11][12] - The company noted an increase in middle to high-income customers, now representing almost half of the loyalty program membership base, indicating a shift in consumer demographics [21][42] 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 [31] - The strategy includes targeted promotions and loyalty programs to drive customer engagement and sales, particularly in the food and beverage categories [18][19] - The company plans for supply margins to normalize in the second half of 2025, anticipating a return to a more balanced supply-demand environment [14] 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 [6][28] - The management highlighted that they are not pulling back on second-half guidance due to tariffs or supply chain uncertainties, indicating a stable outlook [30] - The company is optimistic about the impact of return-to-office mandates and sensible fuel economy regulations on long-term fuel demand [12] Other Important Information - The company added eight new stores in Q1, with ongoing construction of 18 new stores and 20 raze and rebuilds [24] - The effective income tax rate for Q1 was 14.1%, lower than the previous year's rate, due to recognition of energy tax credits [26] Q&A Session Summary Question: Trends in inside sales - Management noted that non-nicotine categories showed improvement due to digital pricing and promotional effectiveness, with expectations for better performance in Q2 due to Easter [33][34] 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 advantage for the company [36][37] Question: Growth in middle and high-income customers - The increase in higher-income customers is attributed to a broader recognition of value, with similar purchasing behavior across income cohorts [40][42] Question: Traffic trends and consumer behavior - Traffic was impacted by weather-related store closures, but management is focused on maintaining competitive pricing to drive traffic [59][60] Question: Store build pace - The company expects to remain second-half weighted for store openings this year, with plans for a more even pace in the following year [64] Question: Operating expenses and staffing - The company is seeing a record number of applications for staff positions, which is positively impacting wage rates and overtime costs [74][75]