Western Refining Reports Most Profitable Retail Quarter Ever

EL PASO, Texas — Western Refining Inc.’s retail division — consisting of 261 convenience stores operating in the Southwest under the GIANT, Mustang, Sundial and Howdy’s brand names — had its most profitable quarter ever, President and CEO Jeff Stevens announced Tuesday during the company’s 2015 fiscal third-quarter earnings call.

The chief executive cited higher fuel margins and improved merchandise sales as reasons for Western Refining’s blowout retail earnings. He did not provide any more specifics.

Operating income at Western Refining’s retail division rocketed by more than $6 million year over year, to $16.463 million in the quarter ended Sept. 30. All categories saw a rise compared to the same period in 2014.

On the fuel side, Western Refining sold nearly 93 million gallons of fuel in the quarter, an increase of more than 12 million gallons year over year. Fuel margins per gallon also rose by a nickel to 31 cents per gallon.

Fuel demand continued to be strong in October, the first month of the company’s fourth quarter, according to Stevens.

On the merchandise side, sales increased significantly by more than $12 million year over year to $83.146 million. Merchandise margins were also strong, growing 0.7 percentage points to 29.4 percent.

Northern Tier Energy Transaction

As CSNews Online recently reported, Western Refining submitted a bid to acquire Northern Tier Energy LP for $2.56 billion. If this deal is consummated, Western Refining would add the SuperAmerica network of 165 convenience stores to its retail network.

The company stressed during Tuesday's earnings call that it could not discuss the possible merger due to legal reasons. However, Stevens did reveal Western Refining will continue to look for retail acquisitions and add value for its shareholders.

Companywide, Western Refining earned a net profit of $160 million in its 2015 third quarter (excluding special items), vs. a net profit of $175 million (excluding special items) in its 2014 third quarter.

“This was another excellent quarter operationally and financially for all our business segments,” concluded Stevens. “Our financial results benefited from solid overall margin performance and a continued focus on cost control.”

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