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02/10/2023

Murphy USA Maintains Its Growth Focus for 2023

The retailer expects store openings to surpass the previous year.
Angela Hanson
Senior Editor
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EL DORADO, Ark. — Murphy USA Inc. overcame operational challenges to complete 36 new-build convenience stores in 2022, including two new QuickChek locations. The retailer also completed 32 raze-and-rebuild sites.

These figures mark a significant increase from 2021, when the company added 23 new stores and 27 raze-and-rebuilds, President and CEO Andrew Clyde shared during Murphy's fourth-quarter and year-end 2022 earnings call.

Clyde cited challenges such as difficulty sourcing electric panels and concrete as well as local delays in hooking up permanent power as contributing to Murphy USA falling short of its internal target of 45 new stores. However, the company was able to backfill additional raze-and-rebuilds and enter 2023 with nine new stores scheduled to open during the first quarter.

"We maintain a robust inventory of high-quality new store locations and expect 2023 activity to eclipse that of 2022," Clyde said. "As such, our guidance remains up to 45 new store additions and up to 30 raze-and-rebuilds."

Category Numbers

Average monthly per-store fuel volumes grew 7 percent in 2022 compared to the prior year, which Clyde attributed to the company's everyday low-price value proposition attracting more customers to the company's c-stores. Store profitability benefited from strong performances in categories attached to fuel, which benefited from higher traffic as well as "highly impactful" promotional events in the tobacco category.

"In 2023, we expect to continue to take share and deliver growth for merchandising initiatives, driving contribution dollars to a range between $795 million and $815 million or an increase of about 5 percent at the midpoint," Clyde said. "This growth is primarily attributable to increases in the nontobacco merchandise and continued growth in food and beverage categories."

On the foodservice front, Clyde noted that the company has extracted further synergies from QuickChek since its acquisition while making excellent progress on integrating the brand.

"We have been very pleased with QuickChek's performance and are equally excited about the future opportunities we see across both brands," he said.

Q4 & FY2021 Financial Results

El Dorado-based Murphy USA reported $117.7 million in net income during the fourth quarter of 2022 compared to $108.8 million during the same quarter of 2021. For the full year, net income was $673 million, a major jump from $397 million in 2021.

Average retail gasoline prices were $3.19 per gallon during Q4 2022 and $3.63 for the full year compared to $3.05 per gallon during Q4 2021 and $2.77 for all of 2021.

Merchandise contribution dollars rose 4.2 percent to $189 million for the quarter while merchandise contribution dollars for the full 2022 rose 9.3 percent to $767.1 million.

Food and beverage contribution decreased 6.1 percent during the fourth quarter due to the higher cost of goods sold but increased 9.3 percent for the full year.

During the fourth quarter, the company reopened 10 Murphy USA raze-and-rebuild locations, opened 12 new Murphy Express stores and opened one new QuickChek store. The quarter and year ended with 17 locations under construction.

"Performance in 2022 demonstrates how far we have come in the nearly ten years since we first reported results as a public company in 2013," said Clyde. "We have invested in critical areas of the business to ensure our ongoing success, including assembling an engaged and experienced leadership team that has helped drive cultural and operational change. We have consistently executed against our clear and coherent strategy to grow the network, improve store performance, enhance differentiated capabilities, and optimize our cost structure to sustain and grow our competitive advantage in the market."

About the Author

Angela Hanson
Angela Hanson is Senior Editor of Convenience Store News. Read More