Arkansas-based convenience store chain Murphy USA Inc. this week announced financial results for the three and six months ended June 30, 2021.
- Net income was $128.8 million, or $4.79 per diluted share, in Q2 2021 compared to net income of $168.9 million, or $5.73 per diluted share, in Q2 2020.
- Total fuel contribution (retail fuel margin plus product supply and wholesale (PS&W) results including RINs) for Q2 2021 was 28.2 cpg, compared to 38.3 cpg in Q2 2020.
- Total retail gallons increased 32.6% in Q2 2021 compared to Q2 2020, while volumes on a same store sales (SSS) basis increased 22.4%.
- Merchandise contribution dollars increased 55.8% to $184.5 million compared to the prior-year quarter, on average unit margins of 19.2% in the current quarter, enhanced by the QuickChek acquisition.
- Food and beverage contribution margin increased significantly to 15.2% of total merchandise contribution dollars compared to 0.8% in the prior year period due to the inclusion of QuickChek in the current period.
- During Q2 2021, the company opened three new Murphy Express stores and closed one QuickChek store. There are nine new Murphy Express sites, six new QuickChek sites, and 14 raze-and-rebuild Murphy USA sites currently under construction.
- Common shares repurchased during Q2 2021 were approximately 1.1 million for $148.3 million at an average price of $136.58 per share.
“We delivered strong second quarter results, despite an operating environment that was the most challenging in our company’s history,” said President and CEO Andrew Clyde. “Supply chain issues, labor shortages, and Colonial pipeline interruptions were just a few of the challenges around which our teams were forced to navigate and overcome.
Results were nevertheless resilient, noted Clyde, despite challenges and underpinned by strong fundamentals, including a recovery in attached merchandise categories as customer transactions and fuel volumes trended higher in June, coupled with robust all-in fuel margins despite another quarter of rising product prices.
“Second-quarter results were also noteworthy against the strength of the prior year comparison, and highlight the advantage of our low-cost, high volume business model,” Clyde said, “which differentiates our performance potential and better positions Murphy USA to compete and win in a challenging environment.”
|Three Months Ended
|Six Months Ended
|Key Operating Metrics||2021||2020||2021||2020|
|Net income (loss) ($ Millions)||$||128.8||$||168.9||$||184.1||$||258.2|
|Earnings per share (diluted)||$||4.79||$||5.73||$||6.73||$||8.60|
|Adjusted EBITDA ($ Millions)||$||244.5||$||274.2||$||399.3||$||444.9|
Net income and Adjusted EBITDA for Q2 2021 were lower when compared to Q2 2020, which the company attributes primarily to decreased all-in fuel contribution, higher store operating expenses and increased payment fees, partially offset by higher merchandise sales and margin. All amounts reported for the quarter and year-to-date 2021 periods include the consolidated results of Murphy USA’s wholly-owned subsidiary, Quick Chek Corp., from Jan. 29, 2021.
Total fuel contribution dollars decreased 2.5%, or $8.0 million, in Q2 of 2021 compared to Q2 of 2020. Retail fuel margins in Q2 2021 decreased to 21.8 cpg, which was 31.2% lower than Q2 2020 due to rising fuel prices.
There was a decrease in total retail fuel contribution dollars of $24.1 million compared to the prior-year quarter record results as overall lower retail fuel margins were partially offset by an increase in retail fuel volumes. PS&W revenues (including RINs) improved by $16.1 million when compared to Q2 2020, which the company attributes to higher RIN prices, which offset the majority of the negative spot-to-rack margins. In addition, typical timing and price-related impacts across the remainder of the product supply chain accounted for the remainder of the difference.
Total merchandise contribution increased 55.8% to $184.5 million in Q2 2021 from $118.4 million reported in the prior year quarter, due to the inclusion of QuickChek in the current year combined with higher same-store sales, which were up 2.4% when compared to Q2 2020. On a SSS basis, tobacco contribution increased 2.2% and non-tobacco contribution improved 2.7% versus the prior year quarter.
Food and beverage contribution, a subset of non-tobacco, experienced a significant shift to 15.2% of the total merchandise contribution, primarily due to QuickChek’s robust prepared food offer.
The company opened three new-to-industry retail locations and closed one location in Q2 2021, bringing the network total to 1,662. This total consists of 1,151 Murphy USA stores, 356 Murphy Express stores and 155 QuickChek stores. There are a total of 29 stores currently under construction, including nine new 2,800-square-foot Murphy Express stores, six QuickChek stores and 14 raze-and-rebuilds.
Cash balances as of June 30 totaled $165.0 million. Long-term debt consisted of approximately $493 million in carrying value of 3.75% senior notes due in 2031, $494 million in carrying value of 4.75% senior notes due in 2029, $297 million in carrying value of 5.625% senior notes due in 2027 and $386 million of term debt. In addition, the company has approximately $123 million in long-term capital leases. The cash flow revolving facility remained undrawn as of June 30.
For a more detailed breakdown of Murphy USA’s Q2 financial report, visit the company’s financial statement at its website.