Murphy USA's Real Estate Pipeline Sets Up Strong 2025
EL DORADO, Ark. — Murphy USA is ramping up expansion plans through an acceleration in organic growth as the convenience store chain looks to end 2024 in a strong position for further success next year and beyond, company officials shared during a recent third quarter of 2024 earnings call.
"I'm very excited about the acceleration in organic growth as current construction projects underway put us in a great place for Q4 openings and sets the foundation for more new stores and earnings growth in 2025 and beyond," said Andrew Clyde, Murphy USA president and CEO. "Our efforts to front load our real estate pipeline have paid off as we've seen more stores exit the permitting process than expected."
The retailer opened four new c-stores during the quarter, bringing year-to-date openings to 10 locations, including one QuickChek store. The company also reopened 16 raze-and-rebuild stores through its program to transform small kiosks into 1,400-square-foot locations, bringing the total of such stores opened in 2024 to 27.
Murphy also opened two new stores and four raze-and-rebuilds since the end of the third quarter.
Murphy USA 2024 Earnings
- First Quarter: Murphy USA to Accelerate Store Openings
- Second Quarter: Murphy USA Lets Value Lead the Way
"We've also accelerated our construction activity to its highest level in the past 10 years with 29 new stores and 15 raze-and-rebuilds currently under construction, and we've already started construction on some of our 2025 new builds," said Galagher Jeff, executive vice president and chief financial officer. "So when you add all that up, we are looking at up to 40 new stores and 47 raze-and-rebuilds scheduled for completion in 2024."
Because some of these projects could slip into early 2025, the company is leaving its new store and raze-and-rebuild guidance unchanged at 30 to 35 new locations and 40-plus rebuilds for full-year 2024.
Jeff praised Murphy USA's asset development team for finding efficiencies during store development and better managing risk, allowing it to achieve its new store guidance for the year while surpassing the company's planned number of raze-and-rebuilds.
"Additionally, the team has moved forward more projects into the fourth quarter and provided a meaningful head start to the 2025 new-store class, where we will get more stores opened earlier in the year, helping to grow our EBITDA in 2025 and going forward," he commented. "As such, we are increasing our capital expenditure guidance to a range of $500 million to $525 million in 2024.
"Importantly, all of this increase is attributable to the stronger-than-expected organic growth, including the high level of raze-and-rebuild activities, more new stores under construction for 2024 and a head start on our 2025 new store program," Jeff continued. "We are moving toward our objective of sustainable run rate for the organization of about 50 new stores per year."
New Murphy stores are achieving key performance well above the network average. According to Jeff, the 56 stores built in 2022-2023 are achieving 292,000 gallons per store month and 43,000 merchandising contribution dollars per store month, which is 18% and 27% higher than network averages, respectively.
"So we're building more new stores, and these stores are delivering more and outperforming our existing stores, which demonstrates why we are excited to accelerate this growth and that will be highly impactful to our company performance going forward," Jeff said.
El Dorado-based Murphy USA has more than 1,500 stores located primarily in the Southwest, Southeast, Midwest and Northeast United States. The company and its team of nearly 15,000 employees serve an estimated 2 million customers each day through its retail network in 27 states. The majority of Murphy USA's stores are located in close proximity to Walmart Supercenters. The company also markets gasoline and other products at standalone stores under the Murphy Express and QuickChek brands.
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