Murphy USA Inc. Q3 FY2026 earnings call

• Store Expansion & Pipeline: Management confirmed a robust pipeline with 18 stores opened year-to-date, 55 under construction, and plans to start 15-20 more by late January. The guidance of 45-50 new store openings for the year remains firm, with a strategic goal to achieve a more 'rateable' (evenly distributed) opening schedule by 2028 rather than lumpy year-end bursts.
• Fuel Volumes & Market Share: Despite high gas prices (> $4.10/gallon in 27 states), Murphy USA gained market share (+6% vs. Opus estimates). Year-to-date volumes are flat, with October performing at 100% of prior year levels despite hurricane disruptions. Management anticipates increased price sensitivity among consumers will support volume growth if prices remain elevated.
• MARS (Automated Solutions): The Murphy Automated Restaurant Solutions (MARS) program is currently in a 'test-to-skill' phase with over 100 units deployed. Initial results are encouraging, but management considers it too early to comment on scalable performance potential. The focus remains on validating customer demand, operating model fit, and unit economics.
• Consumer Behavior: Customers are described as 'selective but resilient.' While trading down from premium to regular fuel grades, they continue to spend on non-discretionary items. Total spend on the Murphy Drive Rewards panel increased by $50 YoY, driven by fuel costs, while merchandise spend remained static or slightly up.
• QuickCheck Performance: The QuickCheck convenience business continues to face pressure due to its concentrated geographic footprint and higher cost structure. Management expects these headwinds to persist in the near term, though no additional guidance updates were provided beyond existing forecasts.

Not Applicable: The provided transcript does not contain specific financial data for product segments, absolute revenue figures, or revenue contribution percentages. Management discusses operational performance and margins qualitatively but omits detailed segment breakdowns.

• Store Openings: Maintained guidance of approximately 45-50 store openings for the current year, with confidence in sustaining this pace into 2027 and potentially exceeding it by 2028.
• Fuel Volume Guidance: Maintained forward-looking guidance for full-year fuel volume decline of 1-3%. Management expressed optimism based on October performance, noting that sustained high prices and competitive separation may drive better-than-expected results in Q4.
• Operating Expenses: Expects modest increases in Q4 operating expenses due to catch-up maintenance and overlapping initiatives from the previous year. However, management reaffirms the intent to end the year below previously stated low guidance targets.
• RINs and Margins: No specific numerical guidance provided for RIN impacts or retail fuel margins. Management notes that RIN prices are largely pass-throughs and that controllable margins should earn 2-3 cents in a normalized environment, potentially higher in tight supply conditions.

• Supply Chain Tightness: Product supply remains tight, impacting both controllables and uncontrollables. Refinery maintenance and infrastructure impacts from geopolitical conflicts (e.g., Iran) are expected to cause lingering volatility well into 2027.
• Competitive Pressure: Specific markets like Colorado and Florida face material competitive intensity, leading to volume pressure. However, cross-store diversification mitigates some risk.
• Regulatory Changes: FDA regulations on vaping products create uncertainty regarding when legal vape products will enter the market, though Murphy USA aims to leverage its supply chain to be first-to-market once allowed.
• Consumer Spending Constraints: High fuel prices exert pressure on household budgets, potentially affecting discretionary spending categories like beer and lottery, which are significant drivers of same-store sales declines.

Q: Analyst asked about the feasibility of maintaining 45-50 store openings in 2027 and whether the pipeline would be rateable throughout the year or lumpy.

A: CEO Mindy West confirmed the 45-50 opening target holds, citing 55 stores under construction and 15-20 starting soon. She noted that while 2027 may have a lumpy start with many openings in Jan/Feb, the pipeline is sufficient to sustain 50+ stores annually through 2028. By 2028, the goal is to make the pipeline more rateable across all quarters to smooth out earnings impact.

Q: Analyst queried why fuel volumes are flat YTD despite high prices, and how to model fuel margins given rising prices and tight supply.

A: West explained that high prices increase consumer price sensitivity, allowing Murphy USA to gain market share (+6% vs Opus). October volumes were flat YoY despite hurricanes, indicating resilience. Regarding margins, she clarified that rising prices squeeze retail margins unless there is a price drop ('fall off') to create separation. Tight supply supports wholesale margins, while retail margins depend on volatile price movements. RIN prices are pass-throughs, so volatility doesn't directly impact controllable earnings.

Q: Analyst asked if normalization of the fuel market is imminent post-conflict, or if volatility will persist.

A: West stated that normalization is complex and will take months, not weeks. Key indicators include the resolution of overseas conflicts, refinery maintenance schedules for facilities running at full capacity, and supply chain recovery. Even if hostilities end, infrastructure damage and replenishment of strategic reserves will keep supply tight and volatile through 2027, which benefits Murphy USA’s optionality in sourcing.

Q: Analyst inquired about the performance of recent store openings and if new prototypes or formats are being tested.

A: West reported that the latest build class is ramping up well, despite initial headwinds from winter storms and price spikes. Previous classes returned ~15% fully ramped after-tax. Management is exploring new formats (smaller/larger) and heavy remodels to add optionality, but the core 2,800 sq ft model remains central. The focus is on sustaining the 50-store annual pace to drive EBITDA growth regardless of macro conditions.

Q: Analyst asked about non-nicotine same-store sales trends, specifically regarding Snap exposure and category performance like beer and lottery.

A: West highlighted that lottery and beer are the primary drags on non-nicotine sales due to their discretionary nature and sensitivity to high gas prices. Excluding these two categories, non-nicotine same-store margin was up 1% YoY. Snap exposure is minimal (<2% of sales) and acts as a currency, not a customer channel, so no material impact has been observed yet. Core categories like snacks and beverages performed well.