EL DORADO, Ark. — Murphy USA plans to capitalize on its successful 2019 as the company pursues further growth in store count and sales this year, with company executives expressing confident optimism during its latest earnings call.
"2019 was an exceptional year in Murphy USA's relatively short tenure as a public company," President and CEO and Director Andrew Clyde said during the retailer's fourth-quarter earnings call, held Jan. 30. "And as we enter 2020 with a lot of momentum, it's important to reflect on what underpinned 2019 results and how that shapes the sustainability and growth in the years ahead for earnings and the other share price drivers we control."
Clyde cited Murphy USA's increase in per-store fuel volumes as a notable achievement in 2019, particularly when factoring in the effects of its Murphy Drive Rewards program discounts and deferrals.
"In a year that started with an unprecedented increase in fuel prices, our retail pricing excellence initiative reset customer expectations and reestablished our low-price position with better leadership, mindset, data and tools for executing. We not only grew volume, but did so very profitably. And as our 2020 guidance highlights, there is more opportunity to grow our fuel contribution," he stated.
The Murphy Drive Rewards program also contributed to 4.8 percent growth in merchandise contribution, which reached a record $419 million. The company's tobacco program contributed to a 4.5 percent increase in per-store tobacco volume.
The company expects to continue growing fuel volume and merchandise sales in 2020
"We expect to continue to take share and are carrying significant momentum into 2020," Clyde said.
Murphy USA saw a significant shift in its store portfolio in 2019. The company's store makeup is now less than 50 percent kiosks due to its focus on a raze-and-rebuild program. During Q4 2019, the retailer opened 10 new retail locations and reopened 10 raze-and-rebuild sites. For the full year, it opened 17 new stores and reopened 27 raze-and-rebuild sites.
The company ended the year with total of 1,489 locations. This includes 1,161 Murphy USA sites and 328 Murphy Express sites.
In 2020, the company intends to build up to 30 of its new 2,800-square-foot stores and raze and rebuild up to 25 high-performing kiosks, turning them into 1,400-square-foot stores. For new-build stores, Murphy USA plans to almost exclusively build 2,800-square-foot locations or larger.
Net income for the fourth quarter of 2019 was $47.6 million, compared to $77.5 million one year ago, which Murphy USA attributed primarily to lower total fuel contribution. For full year 2019, net income was $154.8 million, compared to $213.6 million in 2018.