Susser, TravelCenters of America Report Q2 Results

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Susser, TravelCenters of America Report Q2 Results

CORPUS CHRISTI, Texas -- Susser Holding Corp., operator of 515 Stripes and Town & Country Food Stores, saw same-store merchandise sales rise 4.6 percent for its second quarter, ended June 28, while TravelCenters of America LLC recorded drops in fuel and non-fuel sales.

Susser's merchandise sales from all convenience stores totaled $199.9 million, up 6.4 percent from the second quarter of 2008. Retail merchandise gross margin was 33.3 percent in the latest quarter, down from 34.3 percent a year ago.

Retail merchandise sales growth was driven in part by a 62-cent per-pack increase in the federal excise tax on cigarettes effective April 1, as well as by strong performance in packaged drinks, beer, snacks and foodservice, the company said.

"We're pleased with the performance of our merchandise segment, which increased 4.6 percent on a same-store sales basis, despite the impact of the recession in recent months," said President and CEO Sam L. Susser. "We're seeing some customers trade down to lower-margin items, especially in the packaged beverage, beer and foodservice categories. As a result, we're experiencing stronger sales of our value-priced items, and our category managers are also working closely with our suppliers to create the most compelling values possible to our customers."

Merchandise gross profit, net of shortages, totaled $66.5 million, and was up 3.2 percent from a year ago.

The c-store operator's second quarter adjusted earnings before interest, taxes, depreciation and amortization totaled $24.9 million, vs. $31.7 million a year ago. Companywide gross profit hit $107.8 million, down 4.2 percent, primarily reflecting lower fuel margins.

Susser's companywide revenues for the second quarter were $823.2 million, compared with $1.2 billion a year ago. The company said the results reflect a 43-percent drop in average retail and wholesale fuel prices vs. a year ago, which reduced fuel revenues by $470 million. Lower fuel revenues were partly offset by higher merchandise sales and sales related to an increase in retail and wholesale gallons sold compared to the same period a year ago.

Susser reported quarterly net income of $2.2 million vs. income of $6.7 million.

"Although fuel margins in the quarter were lower than the near-record levels of a year ago, they were just under the five-year average for the second quarter," Susser said. Retail store fuel volumes increased to 177.9 million gallons for the second quarter, up 7.7 percent from a year ago. Average gallons sold per store increased 6.5 percent year-over-year to 352,300.

Retail fuel revenues totaled $392.6 million, down 36.5 percent, as a result of a 41- percent drop in the average retail price of fuel, the company said. Retail fuel gross margins in the second quarter were 15.2 cents per gallon, or 11.5 cents after deducting credit card expenses, vs. 19.5 cents per gallon a year ago, or 15.2 cents after credit card expenses. Retail fuel gross profit was $27 million, compared to $32.2 million in the second quarter of last year.

During the second quarter 2009, Susser opened two new retail units. The company also opened two additional retail units in July, and three additional stores are under construction.

In its wholesale operations, Susser added seven new dealer sites and discontinued six, for a total of 372 dealer sites operating at the end of the second quarter. The company also entered into a definitive agreement to acquire 25 sites. Eleven of the 25 sites are currently supplied wholesale fuel by Susser Petroleum Co.

Meanwhile, TravelCenters of America LLC (TA), operator of 223 locations, recorded a net loss of $15 million for the three months ended June 30, compared to a net loss of $9.8 million during the same period last year. TA's revenue fell 50 percent to $1.1 million in the recent quarter.

"During the three months and six months, the continued slowing of the U.S. economy presented TA with significant operating challenges," the company said in a statement.

Total fuel sales for the quarter reached $840.6 million, compared to $1.96 billion the quarter last year. Gross fuel margin was $59.2 million, compared to $60.3 million the year prior.

At locations TA operated continuously since Jan. 1, 2008, fuel volumes fell 10.7 percent in the quarter compared to 2008 figures. Total non-fuel sales were $284 million, down from $310.4 million the year before. Gross non-fuel margin dollars were $163.2 million, down from $179 million in comparable year-ago period.

TA said fuel volume declines were consistent with declines in trucking activity and diesel fuel consumption generally.

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