
Financial Data and Key Metrics Changes - Total revenue for Q4 2023 was $5.1 billion, down from $5.4 billion in Q4 2022, while full-year revenue was $21.5 billion compared to $23.4 billion in the previous year [38] - Net income for Q4 2023 was $150 million, up from $118 million in Q4 2022, resulting in earnings per share of $7 versus $5.21 in the year-ago period [15] - EBITDA for Q4 2023 was $275 million, compared to $230 million in the same period last year, while full-year EBITDA was $1.06 billion, down from $1.2 billion [15][38] Business Line Data and Key Metrics Changes - Total merchandise sales per store per month reached approximately $205,000, about 15% higher than the Murphy network average [8] - Nontobacco growth accelerated in Q4 2023, with food and beverage sales and margin up 5.4% and 5.7% respectively on a per-store month basis [14] - The 74 new Murphy banner stores added over the last three years averaged about 290,000 gallons per store per month in 2023, nearly 20% higher than the network average [8] Market Data and Key Metrics Changes - Total volumes were up 1.1% in 2023 versus 2022, with per-store volumes of 242,000 gallons per month, finishing within the guided range [13] - The company captured roughly 12% of market share from competitors, with a 5.6% increase in per-store month volumes compared to a 7% decline in OPUS data [13] - Cigarette market share grew to 20%, with smokeless tobacco reaching 15% share of market [37] Company Strategy and Development Direction - The company is focusing on organic growth, targeting between 30 and 35 new stores in 2024, alongside 30 to 40 raise-and-rebuild opportunities [18][41] - Investments in digital transformation and personalized offers are expected to drive in-store sales and margin improvements [31][40] - The company aims to maintain its low-cost operator position while expanding its larger-format stores, ensuring operational efficiency [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining higher margins and capturing more market share despite a challenging macroeconomic environment [49][50] - The company anticipates a slight increase in fuel volumes in 2024, offsetting flat to slightly declining legacy stores [63] - Management highlighted the importance of maintaining affordability for customers, especially in the current economic climate [28][131] Other Important Information - The effective tax rate for Q4 2023 was 23.6%, with full-year rates at 24.2% [16] - The company repurchased 442,000 shares during Q4 and over 1 million shares for the full year, resulting in a cash balance of $118 million at year-end [42] - Capital expenditures for 2023 totaled $344 million, with a significant portion earmarked for growth projects [65] Q&A Session Summary Question: Position as a low-cost operator and larger-format stores - Management confirmed that they can maintain low-cost discipline while expanding larger-format stores, focusing on fuel margin requirements and coverage ratios [54][56] Question: Visibility into merchandise contribution growth - Management indicated that tobacco sales continue to lead, with significant growth in food and beverage contributions, particularly in the QuickChek brand [58] Question: Sustainability of fuel margins and inside store EBITDA growth - Management emphasized that while fuel margins are important, the merchandise side of the business has also seen substantial growth, contributing to overall EBITDA [61][87] Question: Fuel volume guidance and competitive pricing - Management expects fuel volumes to remain flat to slightly up, leveraging their low-cost pricing strategy to maintain competitiveness [63][112] Question: Capital allocation and share buybacks - Management plans to continue share buybacks while ensuring that capital expenditures are funded through operating cash flows [115][116]