Susser Holdings Makes Last Quarter a Good One
CORPUS CHRISTI, Texas -- In what is likely to be Susser Holdings Corp.'s final quarterly report as a standalone company, the parent of Stripes LLC and Sac-N-Pac stores reported strong earnings in its 2014 fiscal second quarter.
Susser Holdings will host a shareholder meeting on Aug. 28 to vote on the company's pending acquisition by Energy Transfer Partners LP (ETP), parent company to Sunoco Inc. and Mid-Atlantic Convenience Stores. Assuming shareholders approve the deal, Susser Holdings Chairman and CEO Sam L. Susser confirmed Friday that the deal will close on Aug. 29.
During the conference call, Sam Susser took time to thank his team members, analysts and investors, the latter two of whom have been involved with the company for more than 10 years, when Susser Holdings became a public company. He added that a Susser-ETP combination will allow for a faster-growing, stronger company moving forward.
"If I did not think so, I would not have done the deal," said Sam Susser.
But before the merger takes place, Susser Holdings had one more quarterly report to announce. The company earned a net profit of $12.3 million in its most recent quarter ended June 30, compared to a $4.3-million loss during the same time period in 2013.
Same-store merchandise sales were a big winner, increasing 4 percent year over year. Fresh food, beer and packaged beverages were especially strong, the company said.
"Despite distractions of the merger, our team delivered on another excellent quarter," Sam Susser said.
Susser Holdings' Laredo Taco Co. quick-service restaurants also did very well in the most recent quarter, the company noted. Foodservice now accounts for nearly one-third of Susser Holdings' gross profits, with expectations to increase to up to 40 percent in the next five to 10 years.
Inside the stores, cigarettes, dairy, and candy and snack sales were the main weaknesses in terms of sales, company officials noted.
At the pump, fuel sales were slower compared to other recent quarters, acknowledged Sam Susser. Average retail gallons per store slowed in the quarter, while fuel margin per gallon slipped half a cent per gallon to 18.7 cents per gallon before factoring in credit card expenses.
According to Sam Susser, fuel sales and margins were very strong in the past two years, making it difficult to continue to best prior quarter numbers. Increased competition, especially in Susser Holdings' primary Texas operating area was also a factor, he said.
NEW STORE GROWTH WILL CONTINUE
Despite the expected merger coming soon, Corpus Christi-based Susser Holdings has and will continue to open new stores, confirmed Sam Susser. The company opened five new large-format Stripes convenience stores in its latest quarter. As of June 30, it operated 636 convenience stores.
In its third quarter, Susser Holdings has already opened another four stores. Seventeen more stores are currently under construction.
"We will have further [new store] acceleration next year," added Sam Susser.
The company also announced it converted 42 of the 47 Sac-N-Pac stores it recently acquired from 18-hour-a-day to 24-hour-a-day locations.