Susser Ahead in New Store Growth for 2014


CORPUS CHRISTI, Texas -- Growth of Stripes convenience stores in 2014 is off to a strong start, with 13 stores already under construction bringing the chain "very ahead of the curve," Sam Susser noted during today's fourth-quarter and full-year 2013 earnings call for Susser Holdings Corp. and Susser Petroleum Partners LP.

The chairman and CEO of Susser Holdings reported that "2013 was a milestone year for us in a number of ways," as it served as the company's 75th anniversary and the 25th consecutive year of positive same-store retail merchandise sales growth.

During today's call, company officials expressed confidence in the long-term growth potential for the retailer's "key markets" in central Texas, reiterating their commitment to expand both the retail and wholesale businesses through job growth and major capital investments.

"We are very pleased with our most recent acquisition, the Sac-N-Pac retail convenience stores serving communities in the fast-growing I-35 corridor in south central Texas and a related wholesale fuel supply business," Susser said.

"We have completed the integration of those businesses into our organization and our back-office systems, and they are performing well due to the quality of the real estate and the 'can do' attitude of the Sac-N-Pac and Stripes team members who drove the smooth transition," he continued. "This transaction is expected to be accretive to both the company [Susser Holdings] and the partnership [Susser Petroleum Partners]."

While plans are to initially operate the Sac-N-Pac stores under their current brand, it is possible that over the next six to 18 months, some sites may be converted to the Stripes brand; the Laredo Taco Co. concept may be added to certain locations; and some sites could be transitioned to the company's wholesale dealer network.

During the fourth quarter of 2013, Susser Holdings continued to assess its network and opened nine new large-format Stripes stores, closed three smaller stores, converted one store to a wholesale dealer location, and razed another store but began rebuild construction on the same site.

For the full-year 2013, Susser Holdings reported the opening of a record 29 new stores. It also closed, rebuilt or converted eight stores. Its year-end total of Stripes stores was 580, 376 of which include a restaurant.

The company expects to open 27 to 33 new stores in 2014, maintaining roughly the same level of new-build growth as last year. However, the retailer stated that it is building these stores faster than last year, when most new builds opened late in the year.

As for its financial performance, merchandise sales grew to $262.2 million during Q4, up 8.9 percent from a year ago. Foodservice and snacks were the greatest contributors to this sales growth. Same-store merchandise sales increased 2.4 percent during the quarter, slowing slightly from a 5.8-percent increase during the prior-year period.

Retail fuel volumes grew 12.3 percent to 23.73 million gallons. Average gallons sold per store increased 7.8 percent, while retail fuel revenues increased 5.4 percent to $756.8 million in accordance with the higher number of gallons sold. This was partially offset by a 21-cent-per-gallon decrease in the average selling price of motor fuel compared to a year ago.

Susser Holdings owns and operates Stripes convenience stores across Texas, New Mexico and Oklahoma. Susser Petroleum Partners is a master limited partnership that distributes more than 1.5 billion gallons of motor fuel annually to Stripes stores, independently operated convenience stores, independently operated dealer locations and commercial customers in Texas, New Mexico, Oklahoma and Louisiana.

Susser Holdings is majority owner and owns the general partner of Susser Petroleum Partners.

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