Susser Holdings Sees Higher Merchandise Sales
CORPUS CHRISTI, Texas -- Susser Holdings Corp.'s same-store merchandise sales for the second quarter of 2010 increased 3.1 percent, compared to growth of 2.5 percent in the first quarter of 2010, and 4.6 percent in the second quarter of 2009.
Retail merchandise margin increased to 33.9 percent, vs. 32.7 percent in the prior quarter and 33.3 percent a year ago. Retail fuel margins increased to 24.8 cents per gallon, vs. 11.1 cents in the first quarter and 15.2 cents a year ago.
Adjusted earnings before interest, taxes, depreciation and amortization for the three months ended July 4, totaled $44.7 million, compared to $24.9 million a year ago, up 80.1 percent, which reflects significantly higher fuel margins, increased fuel sales volumes, improved merchandise sales and margins and successful expense control, the company said.
Companywide gross profit was $133.9 million, an increase of 24.2 percent. Total revenues increased 23.7 percent from a year ago to $1 billion, reflecting a 30-percent increase in combined retail and wholesale fuel revenue and a 4.2 percent increase in total merchandise sales.
The company earned a record $13.8 million net income, excluding the effect of after-tax charges totaling $15.7 million, related to the refinancing and early retirement of debt in the second quarter.
On a reported basis, the company had a net loss of $1.9 million, vs. net income of $2.2 million a year ago.
"During the second quarter we grew same store sales, widened merchandise and fuel margins and reduced controllable expenses and employee turnover, which led to record adjusted EBITDA and net income, excluding one-time refinancing charges," said Sam L. Susser, president and CEO. "Results for both merchandise and fuel were particularly strong in our West Texas markets, which are benefitting from continuing increases in oil drilling activity in the Permian Basin. In addition, the ongoing rebranding of Town & Country stores to the Stripes brand is continuing to have a positive effect on the results from our West Texas convenience stores."
Susser noted the convenience store company made significant strides during the quarter in managing its labor, and, as a result, personnel expense declined to 17.7 percent of merchandise and foodservice revenue in the second quarter, vs. 18.8 percent one quarter ago and 18.4 percent in the second quarter last year.
"We are continuing to focus on expense control throughout the company, and to leverage our purchasing power across the regions to reduce our cost of sales," Susser said.
"Although the Texas economy continues to be challenged by the lingering effects of a national recession, our results suggest that our long-term investments in technology, superior real estate and training of our team members is paying off, and this past quarter's performance was tremendous. I want to say thanks to our team for the significant improvements over the past six months," Susser said.
The company added one new large format retail store during the second quarter and sold its seven Village Market grocery stores, bringing the total number of retail stores in operation as of July 4 to 521. One additional retail store has been opened in the third quarter, and six more stores are under construction, including one that is scheduled to open this month in Lubbock. In its wholesale operations, Susser added three new dealer sites and discontinued eight, for a total of 387 units in operation at the end of the second quarter.
Retail store fuel volumes increased 4.1 percent from a year ago to 185.2 million gallons. Average gallons sold per store increased 1.8 percent to 358,400. Retail fuel revenues totaled $511.6 million, up 30.3 percent, as a result of a 55-cent per-gallon increase in motor fuel prices at the pump and the 4.1 percent increase in volumes sold.
Retail fuel gross margins in the second quarter were 24.8 cents per gallon, or 20.2 cents after deducting credit card expense, compared with 15.2 cents per gallon a year ago, or 11.5 cents after deducting credit card expense. Retail fuel gross profit was $45.9 million, up 69.9 percent from the second quarter of 2009.
Wholesale fuel volumes sold to Susser's 387 dealers and other third-party customers during the latest quarter increased 2.4 percent from a year ago to 128.8 million gallons. Wholesale fuel revenues increased 29.9 percent to $287.5 million as a result of a 47-cent per-gallon increase in the selling price of fuel. Wholesale gross margin was 5.8 cents per gallon, compared with 4 cents per gallon a year ago, which increased wholesale fuel gross profit by 49.1 percent to $7.5 million.