El Dorado, Ark.-based Murphy USA announced financial results for the second quarter of 2020, ending June 30, citing record earnings despite a 25% decline in fuel gallons sold.
“Murphy USA’s record second quarter performance once again demonstrated the competitive advantages of our distinctive business model and customer positioning,” said President and CEO Andrew Clyde. “Fuel margins significantly outpaced volume declines due to COVID-19 related demand destruction even as commodity prices rose sharply in May and June. As volume recovers in July to over 90% of prior year levels reflecting our everyday low price positioning and more favorable geographies and locations, robust fuel margins continue to generate higher than normal fuel contribution for Murphy USA. Merchandise sales and margins have kept record pace as prior and current investments in tobacco categories led to further acceleration of additional market share gains while innovation in general merchandise and recovering traffic boosted non-tobacco categories.”
Net income was $168.9 million, or $5.73 per diluted share, in Q2 2020 compared to net income of $32.7 million, or $1.01 per diluted share, in Q2 2019. Total fuel contribution — retail fuel margin plus product supply and wholesale (PS&W) – results for Q2 2020 was 38.3 CPG compared to 14.7 CPG in Q2 2019.
Total retail gallons decreased 25.7% in Q2 2020 compared to Q2 2019, while volumes on a same-store sales (SSS) basis decreased 27.4%. And merchandise contribution dollars grew 12.2% to $118.4 million compared to the prior-year quarter, on average unit margins of 15.4% in the current quarter.
During Q2 2020, three new stores opened and eight raze-and-rebuild sites were re-opened. In addition, the company divested all nine Minnesota stores to a private company for an immaterial gain; there are 11 new sites and six raze-and-rebuild sites currently under construction.
“Our outlook for the remainder of 2020 and 2021 remains very positive as the underlying structural basis for these trends further solidifies,” said Clyde. “With a strong cash position and flexible balance sheet, Murphy USA remains well positioned to accelerate its balanced strategic capital allocation priorities over the next few years, including the previously announced growth in new-to-industry sites and front-loaded share repurchase program.”