• EBITDA: Just over $1 billion for 2024.
• New Store Openings: 32 new-to-industry stores completed in 2024; 4 additional stores opened since year-end.
• Fuel Volume: Average of 240,600 gallons per store month in 2024.
• Merchandise Contribution Dollars: $834 million in 2024, up 3.8% from 2023.
• Operating Expenses: Up 5.2% per store month in 2024.
• SG&A Expense: $235 million in 2024, down 2.1% from 2023.
• Capital Spending: Just over $500 million in 2024.
• Share Repurchase: Approximately 938,000 shares repurchased in 2024 for $446.6 million.
• Retail Fuel Margins: Up 50 basis points to $0.281 per gallon for 2024.

• Warning! GuruFocus has detected 4 Warning Sign with IBEX.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Murphy USA Inc (NYSE:MUSA) delivered over $1 billion of EBITDA in 2024, showcasing the sustainability of its earnings potential.
• The company completed 32 new-to-industry stores in 2024, aligning with its guidance and setting a strong foundation for 2025 with additional stores under construction.
• Merchandise sales per store increased by 3.5% and margin dollars by 5.9% for the full year, with significant growth in non-nicotine categories.
• Retail fuel margins improved by 50 basis points to $28.1 per gallon, despite less favorable conditions.
• Murphy USA Inc (NYSE:MUSA) has successfully repurchased nearly 60% of its shares since its spin-off, reflecting a strong commitment to shareholder value creation.

Negative Points

• 2024 was a challenging year due to rising prices, severe weather, and food inflation, impacting transactions and margins.
• The company underdelivered on its internal schedule targets for new store openings, affecting fuel gallons and merchandise sales.
• QuickCheck markets faced pressure from food inflation and QSR value wars, leading to lower-than-expected contribution dollars.
• Operating expenses per store month increased by 5.2%, driven by new and larger stores, rising minimum wage requirements, and targeted wage investments.
• Fuel volumes were softer than expected in Q4, with weather events and mid-week holidays impacting sales.

Q & A Highlights

Q: What drove the non-nicotine category to flip positive in the quarter? Was it driven by a change in performance at Murphy's brand or QuickCheck stores? A: The Murphy stores performed very well, with double-digit growth in categories like packaged beverages, candy, and beer sales. This was attributed to initiatives from digital transformation. QuickCheck also performed well, particularly in food and beverage, though not as well as expected.

Q: Can you explain the implied non-nicotine gross margins decline despite better sales and what are you assuming for price and promotional cadence in 2025? A: The gap between sales growth and margin growth is largely due to how lotto and lottery are reported. We don't expect major changes in promotional cadence, though QSR price value wars are expected to continue. Our fuels business provides a strong earnings base that others don't have.

Q: How do you balance share buybacks with maintaining a healthy balance sheet, especially if fuel margins decrease? A: We are committed to a balanced capital allocation approach. Any leverage taken is not specifically for buybacks but to maintain this balance. Our leverage is below 2 times, and we plan for volatility in fuel margins as part of our long-term strategy.

Q: Could you clarify the CapEx guidance for 2024 and 2025, as it seems lower than previously expected? A: The CapEx guidance was adjusted due to uncertainties in store opening schedules. We ended 2024 at the low end of our range and plan for similar spending in 2025, focusing more on new-store openings rather than raise and rebuilds.

Q: What discussions are you having with vendors regarding promotional support and inflation expectations for 2025? A: Vendors value our high volumes per store, which positions us well for discussions. We focus on mutual growth and have seen benefits from our digital transformation initiatives. Inflation remains uncertain, but we are prepared to adapt and continue offering value to our customers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.