Susser Delivers Solid Q1 Despite Harsh Weather

CORPUS CHRISTI, Texas – Susser Holdings Corp., parent to Stripes and Sac-N-Pac convenience stores, achieved major growth during the first quarter of 2014 by opening two new large-format Stripes stores and acquiring 47 Sac-N-Pac stores.

Another 17 Stripes stores are currently under construction, marking a record for the retailer, company officials reported during its first-quarter earnings call today (click here for related story). Susser Holdings expects to open 27 to 33 Stripes stores in total this year and continues to acquire land for future development.

"We delivered a solid performance on the merchandise side of the business [during Q1], despite colder, wetter weather," said Sid Keswani, senior vice president of store operations. Overall, merchandise sales increased 11.7 percent to $276.4 million, with "very solid" merchandise margins.

Same-store merchandise sales increased 1.9 percent, slowing slightly from the 4.2-percent growth seen during the same quarter one year ago. Foodservice, snacks and packaged drinks were the biggest growth drivers.

Company officials also noted that Easter occurred during the second quarter rather than the first, as it did in 2013, and Susser Holdings estimates that it would have otherwise increased same-store sales growth.

"Foodservice will continue to be a big focus," said Keswani, citing that foodservice purchases also drive purchases of high-margin items such as beverages.

President, CEO and Chairman Sam L. Susser stated that Stripes' coffee business was very strong due to the poor weather in "a very unusual quarter," and the company hopes to see much stronger sales of frozen and fountain drinks in the coming months. Single-serve packaged beverage sales also grew, helped along by the retailer's Laredo Taco Co. food program.

Retail fuel volumes increased 12 percent in Q1 vs. one year ago, to 250.3 million gallons. Average gallons sold per store grew 2 percent year over year, or by 4.2 percent excluding the recently acquired Sac-N-Pac stores. Total retail fuel revenues increased 5.1 percent over Q1 2013 to $822.9 million. This reflects an increase in gallons sold, partially offset by a 6.2-percent decrease in the average selling price of motor fuel.

Susser Holdings currently operates 629 convenience stores, 402 of which include a restaurant.