Murphy USA Inc (MUSA, Financial), a leading marketer of retail motor fuel products and convenience merchandise, operates more than 1,700 fueling stations and convenience stores across the Midwest and Southeastern United States. The firm owns about 75% of its locations, with most stores situated in high-traffic areas near Walmart supercenters. Murphy's stores typically range from 1,400-2,800 square feet, with most of its in-store sales derived from tobacco products. The firm acquired about 150 QuickChek stores in 2021, boosting its presence in grocery and foodservice. Murphy generates about two-thirds of its profit from fuel retailing, with the remaining one-third coming from in-store sales.
Performance Overview
Murphy USA Inc (MUSA, Financial) reported net income of $144.8 million, or $6.92 per diluted share, for Q2 2024, compared to net income of $132.8 million, or $6.02 per diluted share, in Q2 2023. This result fell short of the analyst estimate of $7.09 per share. The company's total revenue for the quarter was not disclosed in the filing, but the performance metrics provide a comprehensive view of the company's operations.
Key Financial Achievements
Murphy USA Inc (MUSA, Financial) achieved several notable financial milestones in Q2 2024:
- Total fuel contribution increased to $390.3 million, up 6.7% from $365.8 million in Q2 2023.
- Merchandise contribution dollars rose by 4.7% to $216.5 million, with average unit margins of 20.0% compared to 19.7% in Q2 2023.
- The company repurchased approximately 238.4 thousand common shares for $107.1 million at an average price of $449.30 per share.
- A quarterly cash dividend of $0.44 per share was paid, representing a 4.8% increase from March 2024.
Income Statement Highlights
| Key Operating Metrics | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Income ($ Millions) | $144.8 | $132.8 |
| Earnings per Share (Diluted) | $6.92 | $6.02 |
| Adjusted EBITDA ($ Millions) | $278.6 | $257.1 |
Fuel and Merchandise Contributions
Total fuel contribution dollars increased by $24.5 million, or 6.7%, in Q2 2024 compared to Q2 2023, driven by higher margins despite lower retail volumes sold. Retail fuel contribution dollars rose by $30.5 million, or 9.1%, to $365.2 million, with retail fuel margins increasing by 10.0% to 29.7 cpg.
Merchandise contribution dollars grew by $9.7 million, or 4.7%, to $216.5 million, primarily due to higher merchandise sales. Tobacco contribution dollars increased by 10.3%, while non-tobacco contribution dollars saw a modest increase of 0.3%.
Operational Challenges
Despite the positive financial achievements, Murphy USA Inc (MUSA, Financial) faced several challenges:
- Total retail gallons decreased by 0.6% in Q2 2024 compared to Q2 2023, with same-store sales (SSS) volumes declining by 1.3%.
- Total store and other operating expenses increased by $13.2 million, primarily due to higher employee-related expenses and store maintenance costs.
Financial Resources and Share Repurchases
As of June 30, 2024, Murphy USA Inc (MUSA, Financial) had cash and cash equivalents totaling $79.8 million and marketable securities of $7.5 million. Long-term debt stood at approximately $1,781.4 million. The company repurchased approximately 238.4 thousand common shares for $107.1 million during the quarter, with $1.2 billion remaining under the existing $1.5 billion 2023 authorization.
Guidance Update
Murphy USA Inc (MUSA, Financial) revised its full-year merchandise contribution guidance to a range of $830 million to $840 million, down from the original range of $860 million to $880 million. The company cited weaker than expected consumer demand, particularly in the Northeast, as the primary reason for the revision.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Murphy USA Inc for further details.
