Murphy USA Boasts Positive Third-Quarter Results Despite Economic Conditions

EL DORADO, Ark. — Murphy USA Inc.'s success in the third quarter of 2022 proves the strength of its business model and strategic plans, and demonstrates the likelihood of future positive results, company officials stated during its most recent earnings call.

President and CEO Andrew Clyde pointed to Murphy's three-year record during the onset of the COVID-19 pandemic, the ensuing supply chain challenges during the early period of recovery, and the more recent stage of higher costs and inflationary wage pressures.

If the company can thrive during these varied macroeconomic environment, each of which had their own unique challenges and opportunities, company officials are confident in Murphy's ability to perform should the economy either worsen or enter a period of economic recovery, Clyde said.        

"We have prospered during periods of sharp rising product prices that threaten broader consumer spending and the most recent quarter delivered strong financial results, as prices fell and interest rates rose," he said. "If our advantage business can thrive across these varied macroeconomic environments, each characterized by unique challenges and opportunities, we remain confident in our ability to perform if the economy worsens or if we embarked upon a period of economic recovery."

The company's QuickChek brand offer and the convenience store chain's ability to deliver high-quality food and items at value prices continue to resonate with customers, Clyde noted. Murphy will invest further in its customer value proposition at QuickChek while growing in the markets where it already has a loyal customer base and brand recognition.

The company is on track to add between 40 and 45 new-builds in 2022 with a similar number slated for 2023. All new stores are exceeding internal expectations and incrementally positive to the network averages.

It is also on track to complete 38 raze-and-rebuilds this year. These locations replace high-performing kiosks with larger, 1,400-square-foot stores featuring a broader assortment of higher margin merchandise, improved grab-and-go food selections and a more favorable customer experience.

Although store-level staffing has remained a challenge for the c-store industry at large, Murphy has observed a positive change to levels of applicants in recent months, Clyde noted.

Q3 BY THE NUMBERS

El Dorado-based Murphy USA reported net income of $219.5 million during the third quarter of 2022 compared to net income of $104 million during the same quarter of 2021. Revenue was $6.2 billion compared to $4.6 billion this time last year. Third-quarter EBITDA was $367 million vs. $212.5 million the previous year.

At the fuel pump, average retail gasoline prices were $3.67 per gallon compared to $2.89 per gallon during Q3 2021. Total retail gallons jumped 13.2 percent to 1.2 billion gallons vs. 1.1 billion gallons one year ago, while volumes on a same-store sales basis increased 9 percent.

Merchandise contribution dollars rose 9.8 percent to $205.7 million on average unit margins of 20 percent for the quarter, compared to the prior-year quarter's contribution dollars of $187.3 million on unit margins of 19.6 percent.

Food and beverage contribution margin increased 3.9 percent during Q3 2022 from the prior-year period, while sales dollars improved 9.4 percent.

Murphy's everyday low price model led to strong fuel volume growth and same-store merchandise growth, while customer loyalty translated to more frequent trips and larger baskets, according to Clyde. He noted that performance in categories attached to fuel trips has maintained strength, with October per-store volumes running approximately 10 percent higher than the prior year.

"Our distinct model and enduring strategy have served our shareholders well and we see no reason to believe the future will be any different in Murphy USA. Affordability matters, and we are clearly seeing the benefits of our everyday low-price strategy in our third quarter results," Clyde said.

During the quarter, Murphy opened seven new Murphy Express stores, increasing its store count to 1,700 locations, and reopened 10 raze-and-rebuild sites. Year to date, the company has opened 22 new Murphy Express stores and one new QuickChek store. Twelve raze-and-rebuild Murphy USA stores are currently under construction.