Murphy USA Inc. (NYSE: MUSA), a leading marketer of retail motor fuel products and convenience merchandise, today announced financial results for the three and six months ended June 30, 2023.
Key Highlights:
- Net income was $132.8 million, or $6.02 per diluted share, in Q2 2023 compared to net income of $183.3 million, or $7.53 per diluted share, in Q2 2022
- Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results including RINs) for Q2 2023 was 29.5 cpg, compared to 34.9 cpg in Q2 2022
- Total retail gallons increased 2.3% in Q2 2023 compared to Q2 2022, while volumes on a same store sales ("SSS") basis declined 1.8% (down 0.6% on an APSM basis)
- Merchandise contribution dollars for Q2 2023 increased 5.1% to $206.8 million on average unit margins of 19.7%, compared to the prior-year quarter contribution dollars of $196.7 million on unit margins of 19.8%
- During Q2 2023, the Company repurchased approximately 334.1 thousand common shares for $95.1 million at an average price of $284.65 per share
“Murphy USA results show continued momentum in the second quarter, maintaining fuel market share while delivering incremental in-store growth against exceptional 2022 performance," said President and CEO Andrew Clyde. "Our strong year-to-date performance in an environment with markedly less volatility reaffirms our belief that the structural change in fuel margins is not only sustainable, but also closer to the high-end of our expectations. We remain confident in our ability to track favorably against our full-year guidance and are well-positioned to capitalize on the opportunities ahead.”
Consolidated Results
Three Months Ended
| Six Months Ended
| |||||||||||
Key Operating Metrics | 2023 | 2022 | 2023 | 2022 | ||||||||
Net income (loss) ($ Millions) | $ | 132.8 | $ | 183.3 | $ | 239.1 | $ | 335.7 | ||||
Earnings per share (diluted) | $ | 6.02 | $ | 7.53 | $ | 10.82 | $ | 13.59 | ||||
Adjusted EBITDA ($ Millions) | $ | 257.1 | $ | 316.6 | $ | 477.3 | $ | 593.6 | ||||
Net income and Adjusted EBITDA for Q2 2023 were lower versus the prior-year period, due primarily to lower total fuel contribution and increases in store operating expenses and general and administrative expenses, which were partially offset by higher overall merchandise contribution margins and lower payment fees.
Fuel
Three Months Ended
| Six Months Ended
| |||||||||||||
Key Operating Metrics | 2023 | 2022 | 2023 | 2022 | ||||||||||
Total retail fuel contribution ($ Millions) | $ | 334.7 | $ | 320.8 | $ | 599.4 | $ | 574.3 | ||||||
Total PS&W contribution ($ Millions) | (53.0 | ) | 22.8 | (103.1 | ) | 62.3 | ||||||||
RINs (included in Other operating revenues on Consolidated Income Statement) ($ Millions) | 84.1 | 79.3 | 199.4 | 156.0 | ||||||||||
Total fuel contribution ($ Millions) | $ | 365.8 | $ | 422.9 | $ | 695.7 | $ | 792.6 | ||||||
Retail fuel volume - chain (Million gal) | 1,238.8 | 1,211.3 | 2,380.5 | 2,299.6 | ||||||||||
Retail fuel volume - per store (K gal APSM)1 | 249.3 | 250.7 | 239.8 | 237.8 | ||||||||||
Retail fuel volume - per store (K gal SSS)2 | 245.2 | 247.9 | 236.2 | 235.3 | ||||||||||
Total fuel contribution (including retail, PS&W, and RINs) (cpg) | 29.5 | 34.9 | 29.2 | 34.5 | ||||||||||
Retail fuel margin (cpg) | 27.0 | 26.5 | 25.2 | 25.0 | ||||||||||
PS&W including RINs contribution (cpg) | 2.5 | 8.4 | 4.0 | 9.5 | ||||||||||
1Average Per Store Month ("APSM") metric includes all stores open through the date of calculation | ||||||||||||||
22022 amounts not revised for 2023 raze-and-rebuild activity | ||||||||||||||
Total fuel contribution dollars of $365.8 million decreased $57.1 million, or 13.5%, in Q2 2023 compared to Q2 2022 due to a lower total fuel contribution margin partially offset by higher retail volumes sold during the period. Retail fuel contribution dollars increased $13.9 million, or 4.3%, to $334.7 million compared to Q2 2022 due to higher volumes and retail fuel margins. The increase was driven by 27.0 cpg retail fuel margins, a 1.9% increase compared to Q2 2022, coupled with 2.3% higher retail fuel volumes sold. PS&W margins (including RINs) decreased $71.0 million when compared to Q2 2022, reflecting the continued negative impact of timing and inventory pricing adjustments.
Merchandise
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Key Operating Metrics | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Total merchandise contribution ($ Millions) | $ | 206.8 | $ | 196.7 | $ | 393.9 | $ | 372.4 | ||||||||
Total merchandise sales ($ Millions) | $ | 1,049.0 | $ | 994.6 | $ | 2,015.2 | $ | 1,886.6 | ||||||||
Total merchandise sales ($K SSS)1,2 | $ | 204.7 | $ | 198.6 | $ | 197.0 | $ | 186.2 | ||||||||
Merchandise unit margin (%) | 19.7 | % | 19.8 | % | 19.6 | % | 19.7 | % | ||||||||
Tobacco contribution ($K SSS)1,2 | $ | 18.2 | $ | 17.8 | $ | 17.8 | $ | 17.3 | ||||||||
Non-tobacco contribution ($K SSS)1,2 | $ | 22.5 | $ | 21.6 | $ | 21.1 | $ | 18.9 | ||||||||
Total merchandise contribution ($K SSS)1,2 | $ | 40.7 | $ | 39.4 | $ | 38.9 | $ | 36.2 | ||||||||
12022 amounts not revised for 2023 raze-and-rebuild activity | ||||||||||||||||
2Includes store-level discounts for Murphy Drive Reward ("MDR") redemptions and excludes change in value of unredeemed MDR points | ||||||||||||||||
Total merchandise contribution increased $10.1 million, or 5.1%, to $206.8 million in Q2 2023 compared to the prior-year quarter due primarily to higher unit sales volumes. Total tobacco contribution dollars in Q2 2023 increased 3.0% and non-tobacco contribution dollars increased 7.6% compared to Q2 2022.
Other Areas
Three Months Ended
| Six Months Ended
| |||||||||||
Key Operating Metrics | 2023 | 2022 | 2023 | 2022 | ||||||||
Total store and other operating expenses ($ Millions) | $ | 256.7 | $ | 252.2 | $ | 495.0 | $ | 474.9 | ||||
Store OPEX excluding payment fees and rent ($K APSM) | $ | 33.5 | $ | 32.2 | $ | 32.3 | $ | 30.9 | ||||
Total SG&A cost ($ Millions) | $ | 59.4 | $ | 52.2 | $ | 118.4 | $ | 98.4 | ||||
Total store and other operating expenses were $4.5 million higher in Q2 2023 versus Q2 2022, mainly due to employee related expenses, store maintenance costs, and inventory shrink costs partially offset by a reduction in payment fees. Store OPEX excluding payment fees and rent on an APSM basis were 3.9% higher versus Q2 2022, primarily attributable to increased employee related expenses, maintenance, and inventory shrink costs. Total SG&A costs for Q2 2023 were $7.2 million higher than Q2 2022 primarily due to higher professional fees from business improvement initiatives and employee related expenses, partially offset by lower employee incentive expenses.
Store Openings
The tables below reflect changes in our store portfolio in Q2 2023:
Net Change in Q2 2023 | Murphy
| QuickChek | Total | |||||
New-to-industry ("NTI") | 4 | 3 | 7 | |||||
Closed | — | (2 | ) | (2 | ) | |||
Net change | 4 | 1 | 5 | |||||
Raze-and-rebuilds reopened in Q2* | 4 | — | 4 | |||||
Under Construction at End of Q2 | ||||||||
NTI | 7 | 3 | 10 | |||||
Raze-and-rebuilds* | 14 | — | 14 | |||||
Total under construction at end of Q2 | 21 | 3 | 24 | |||||
Net Change YTD in 2023 | ||||||||
NTI | 11 | 4 | 15 | |||||
Closed | — | (2 | ) | (2 | ) | |||
Net change | 11 | 2 | 13 | |||||
Raze-and-rebuilds reopened YTD* | 6 | — | 6 | |||||
Store count at June 30, 2023* | 1,566 | 159 | 1,725 | |||||
*Store counts include raze-and-rebuild stores | ||||||||
Financial Resources
As of June 30, | ||||||
Key Financial Metrics | 2023 | 2022 | ||||
Cash and cash equivalents ($ Millions) | $ | 92.9 | $ | 240.4 | ||
Marketable securities, current ($ Millions) | $ | 13.0 | $ | — | ||
Marketable securities, non-current ($ Millions) | $ | 7.4 | $ | — | ||
Long-term debt, including capital lease obligations ($ Millions) | $ | 1,787.3 | $ | 1,795.5 | ||
Cash balances as of June 30, 2023 totaled $92.9 million, and the Company also had total marketable securities of $20.4 million. Long-term debt consisted of approximately $298.1 million in carrying value of 5.625% senior notes due in 2027, $495.3 million in carrying value of 4.75% senior notes due in 2029, $494.2 million in carrying value of 3.75% senior notes due in 2031, and $381.4 million of term debt. In addition, the Company has approximately $118.3 million in long-term capital leases. The revolving cash flow facility was undrawn as of June 30, 2023.
Three Months Ended
| Six Months Ended
| |||||||
Key Financial Metric | 2023 | 2022 | 2023 | 2022 | ||||
Average shares outstanding (diluted) (in thousands) | 22,051 | 24,341 | 22,092 | 24,708 | ||||
At June 30, 2023, the Company had common shares outstanding of 21,453,014. Common shares repurchased during the quarter were approximately 334.1 thousand shares for $95.1 million, which were purchased under the 2021 share repurchase plan. Common shares purchased during the six months ended June 30, 2023, were approximately 383.0 thousand shares for a total of $108.8 million. As of June 30, 2023, approximately $105.7 million remained available under the $1 billion 2021 plan. On May 2, 2023, the Company announced a new share repurchase program of up to $1.5 billion to be executed by December 31, 2028, once the current program is completed.
The effective income tax rate for Q2 2023 was 24.4% compared to 24.0% in Q2 2022.
The Company paid a quarterly cash dividend on June 1, 2023 of $0.38 per share, or $1.52 per share on an annualized basis, a 2.7% increase from the previous quarter for a total cash payment of $8.2 million. The total amount paid in dividends year-to-date is $16.3 million, or $0.75 per share.
Earnings Call Information
The Company will host a conference call on August 3, 2023 at 10:00 a.m. Central Time to discuss second quarter 2023 results. The conference call number is 1 (888) 330-2384 and the conference number is 6680883.The earnings and investor related materials, including reconciliations of any non-GAAP
