Murphy USA Inc. Q3 FY2025 earnings call

Andrew Clyde emphasized continuity in leadership and capital allocation, resilience in third quarter results despite challenging fuel margins, and momentum in merchandise. Mindy West discussed the pleasing third quarter results, the 50-50 capital allocation strategy, and October performance showing fuel fundamentals. Donnie Smith detailed new store development progress, adjusted fuel volume guidance, improved merchandise performance, OpEx and G&A cost savings, and tax adjustments.

In the third quarter, Murphy USA's EBITDA was $285 million, virtually flat compared to the prior year despite all-in fuel margins running approximately $0.02 lower. For merchandise, total margin contribution dollars increased by $24.4 million or 11.2% in Q3. Nicotine categories saw growth of over 20%, center of the store categories grew approximately 5%. Total food and beverage sales in Q3 were up 2.7% but margins were pressured, down 2.2%. Fuel average per store month volumes decreased by 1.8% in Q3 and 0.7% over a 2-year period, yet all-in margins were stronger than expected in the low price, low volatility environment.

For 2025, fuel volume guidance was adjusted to between 235,000 to 237,000 gallons per store per month. Merchandise contribution guidance was tightened to the upper end of the range at $870 million to $875 million. OpEx and G&A expenses are expected to finish below the guidance. Adjusted EBITDA is expected to be close to $1 billion. The dividend is expected to grow 10% annually, and a new $2 billion share repurchase program has been authorized.

Factors that may cause actual results to differ from forward-looking statements, such as market environment changes, competition, and regulatory factors, as outlined in SEC filings.

Q: Edward Kelly asked about fuel margins cadence and investing to drive volume.

A: Mindy West responded on fuel margin flatness, October price run-up, and fuel engine strength.

Q: Bonnie Herzog asked about ZYN promo execution and capital allocation.

A: Mindy West and Andrew Clyde discussed ZYN promo showcasing execution ability and capital allocation balance.

Q: Irene Nattel asked about halo effect and capital allocation.

A: Mindy West and Andrew Clyde talked about halo effect of ZYN promo and capital allocation leverage.

Q: Pooran Sharma asked about preparation for CEO role and cost opportunities.

A: Mindy West discussed background preparing for CEO and future cost optimization.

Q: Robert Griffin asked about nicotine category and fuel margin competition.

A: Mindy West and Andrew Clyde responded on nicotine category opportunity and fuel margin competition.

Q: Jacob Aiken-Phillips asked about fuel October performance and capital allocation.

A: Mindy West and Andrew Clyde talked about October fuel run-up and capital allocation trade-offs.