New C-stores Propel Western Refining’s Retail Margins

EL PASO, Texas -- Western Refining Inc. (WNR) is quite pleased with the 60 stores it opened or acquired in 2011. Thanks to these new locations, merchandise margins improved to 28.4 percent in its 2012 fiscal first quarter, compared to 28.3 percent last year. Fuel margins also improved slightly to 16 cents per gallon from 15 cents in its 2011 first quarter.

Meanwhile, same-store fuel and merchandise sales improved considerably vs. the same timeframe last year, WNR President and CEO Jeff Stevens said during an investor conference call this afternoon.

WNR's retail sales increased to $275.9 million, as 67 million gallons of fuel were sold during the quarter ending March 31 and merchandise sales reached $56 million.

According to Stevens, WNR is enthusiastic about its immediate retail future. "We're encouraged retail will do really well during the second quarter as we head toward the summer months," he said.

Net profits were down at WNR's retail division, however. The parent of GIANT convenience stores earned a profit of $478,000 vs. $777,000 during the same quarter last year.

At the end of its latest quarter, WNR had 210 retail locations, up from 150 stores on March 31, 2011.

Companywide, WNR earned a profit of $85.1 million, compared to a $25.4-million profit last year, excluding one-time items. If one-time items were included, WNR lost $53.5 million vs. a profit of $12.2 million in its 2011 first quarter.

"It was a very good quarter for Western," said Stevens. "Our refining margins were excellent."