Western Refining’s Retail Division Enjoys a Robust 2012

EL PASO, Texas -- Western Refining Inc.'s (WNR) retail division reported a stellar 2012 fourth quarter and full fiscal year, with sales and margins increasing across the board compared to 2011.

The company's convenience store division, which operates under the banners of GIANT, Mustang, Sundial and Howdy's, improved its net sales to $303 million in the latest quarter ended Dec. 31, an increase of $33 million compared to its 2011 fiscal fourth quarter.

For the year, net sales in its c-store division improved to $1.2 billion vs. $940 million during the 2011 fourth quarter.

Merchandise sales for WNR's 2012 fourth quarter were $61 million, a $5 million improvement compared to the same period in 2011. For all of 2012, merchandise sales improved by more than $43 million compared to the prior year.

Merchandise margins also rocketed higher. The company achieved a 28.5-percent margin in its latest quarter and 29 percent for all of 2012, vs. 27.2 percent and 28 percent figures in 2011, respectively.

Fuel sales also propelled WNR's retail division. The company sold $260 million worth of fuel in its latest quarter vs. $229 million in its 2011 fourth quarter. For the entire year, WNR sold more than $1 billion in fuel, compared to $792 million in 2011. Fuel margins increased to 20 cents in the company’s 2012 fourth quarter, a 5-cent rise compared to the same period in 2011.

Western Refining’s management did not discuss the c-store division during this morning's earnings call. Instead, it focused on overall earnings, which more than tripled. Overall, WNR achieved a net profit of $155 million in its 2012 fiscal fourth quarter vs. $50 million in the same timeframe in 2011.

"It was an unprecedented year for Western [Refining]. We dramatically improved our balance sheet and reduced debt by $304 million in 2012," CEO Jeff Stevens said during the call, noting that net debt is now down to $45.9 million.

In addition, WNR rewarded its shareholders in 2012. "We were the highest-yielding equity among our peers in 2012," noted Stevens.

Western Refining set forth "ambitious goals" for 2013 that will utilize its $206 million capital expenditure budget for the year, concluded Stevens.

El Paso, Texas-based Western Refining Inc. operated 222 retail outlets as of Dec. 31. That compares to 209 company-operated stores at the end of 2011.

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