管理層發言
Thank you for standing by. My name is Freda, and I will be your conference operator today. At this time, I would like to welcome everyone to the Murphy USA Second Quarter 2026 Earnings Q&A Call. I will now turn the call over to Christian Pikul. Please go ahead.
Thank you, Freda. Welcome, everybody. Thanks for joining us this morning for this Q&A session. With me are Mindy West, President and Chief Executive Officer; and Donnie Smith, Chief Financial Officer. As Freda said, we're happy to welcome more analysts to the research community covering Murphy USA. We're going to ask that you limit your initial questions to one and then get back in the queue afterwards. Please keep in mind that some of the comments discussed in today's Q&A session may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Please refer to the forward-looking statements section of either the earnings release or the management commentary document for further details. And with that, I'm happy to open up the call.
分析師問答
Our first question is from Irene Nattel with RBC Capital Markets.
I was just wanting some more color on the updated 2026 outlook, notably around two elements. The first being the fuel margin guidance and the second being, relatively speaking, the slightly low-end guidance on merchandise. I was wondering: looking for more color on the content and drivers of both of those, please.
Irene, welcome to the call. Thank you for your question. When thinking about retail margins for the rest of the year, it's very difficult to predict where we're going to land because we're in the middle of a lot of heightened volatility with a crisis that continues to ebb and flow and we don't know where that will end. While we can't predict the macro environment, we are seeing a higher floor for retail margins. Competitors are remaining rational. Pricing reflects the needs of the marginal retailer to maintain their required returns, still reflecting that virtuous cycle that we've seen. What we haven't seen so far is a pronounced decline in price, which would gather incremental volumes for us as well as expand the retail margin. At this point, we are not baking that into the forecast at all. So you could call our margin forecast somewhat conservative. I would agree with that. But I would also say that that's intentional on our part because we don't know what it's going to be, and we manage our business to try to outperform our commitments.
What we are saying is reflective of what we have high confidence that we can deliver at this point. With regard to merchandise, obviously our consumer is experiencing some budget pressures, which are putting some pressures on the nondiscretionary pieces of our merchandise business, although we have been very pleased with how resilient the customer has been year-to-date. But I will tell you that the target when we originally set it at the beginning of the year was a bit of a stretched target anyway. It was going to be very hard to get to the high end of that target. And in the face of all the weather impacts that we had in the first quarter, while we had the winter storms and at one point had half our network closed, that results in just a loss of demand there for those time periods, along with what we think are still going to be some pressures on our customers' wallets as we go through the rest of the year. That gives us confidence that, yes, we will be in the range, but towards the low end of the range.
That's really helpful. Can I ask a follow-up question?
We're just going to move on, Irene.
Our next question is from the line of Pooran Sharma with Stephens Inc.
Congrats on posting the strong results. I wanted to get your sense on supply normalization. If current peace talks ultimately result in a durable resolution, how quickly do you think physical supplies could take to normalize given depleted inventories, the need to rebuild strategic reserves, disrupted shipping flows, potentially shuttered upstream and downstream assets? How long should investors expect supply tightness and volatility to persist even after the geopolitical situation improves?
Very good question, Pooran. I wish that I had the answer to that because all the things that you mentioned are great uncertainties in the market and very unlike what we saw in 2022, where COVID did produce a demand shock and then Russia-Ukraine created a lot of volatility, but really had no impact on domestic supply at all. When you look at the current conflict, it obviously as a supply shock is having a material impact on domestic inventories and flows essentially globally. Our belief is the return to normal is not likely in the near term and yet to be seen is how much damage to infrastructure there is overseas and how long that takes to recover. And then you mentioned if this conflict resolves, I don't know that we have any line of sight to think that it's going to resolve quickly. So that in and of itself may take a prolonged period. I think we're looking at well into next year before this even begins to unwind.
Our next question is from the line of Bonnie Herzog with Goldman Sachs.
I had a question on NTIs. You mentioned in the press release that you expect your NTI delivery to come in closer to 45 new stores as opposed to the upper end of guidance. I was hoping to hear what changed. Is construction taking longer this year and/or did your original guidance maybe imply some M&A that now isn't happening? And you also mentioned that you're pulling forward construction of new stores scheduled to open in 2027. Should we assume a faster ramp of NTIs next year? Ultimately, how does this change the pace of growth and profitability since I think you said in the past it takes a few years to reach run-rate profitability on new stores?
Thanks, Bonnie. Yes, this year, we are going to be at the lower end of our stated range, but that is without the tuck-in acquisitions that we said would take us to the high end of the range. Those may come up, we don't know. But we are only commenting now as to what we have in the pipeline and the organic pipeline currently as we continue to invest heavily in our team and in our new store pipeline. So we think we are well positioned to grow at this rate and above per year going forward. Pulling some stores forward earlier in the year will certainly be helpful to get them to ramp starting sooner, but it does take, as a reminder, about three years for a store to get to full ramp. So it's not an indication that our activity is taking longer or we're doing less. It's just indicative of what we felt we could deliver from an organic standpoint and absent any tuck-in acquisitions, and the ramp we think is going to go as expected. As for M&A, large-scale M&A is certainly not something that's on the radar for us and does not need to be given the health of our organic pipeline.
Our next question is from the line of Ed Kelly with Wells Fargo.
This is John Parke on for Ed. Can you talk about some of the puts and takes for nicotine margin dynamics in Q2 and just kind of the outlook for Q3, given the Zyn lap here?
Yes. The Zyn lap is going to be a big one. We do believe that nicotine is going to continue to be a tailwind for us in the second half. Excitingly, we're actually seeing strength in combustibles, especially with the new value-priced Cowboy Cut cigarette that did really well. It was well received by our customers. We actually had a hard time keeping that product on the shelf. As we look forward, we think that's going to continue to be a source of strength. We also see some emerging other tobacco product opportunities in the second half; some new-gen pouches are going to come online. We expect some flavored vape products back in the market. But again, as you reminded us, we do have a tough third-quarter comp as we lap that Zyn promotion. Our margins this quarter were reflective of growth in the pouch category of other tobacco products, but continued resurgence in the cigarette category, which, as a reminder, carries a lower margin than those other tobacco products. So Q3 is going to be a tough comp, but we think overall the category is going to continue to be promotion heavy, and we'll be a major participant in that.
Our next question is from Thomas Palmer with JPMorgan.
I wanted to ask about what you're seeing with rewards. Last quarter, you discussed elevated sign-ups in the program when fuel prices moved higher. How is the conversion of those sign-ups been in terms of driving more consistent customer visits by those new members and then also converting those customers from the pump into the inside of the store?
Yes. That is a great question. As we said last quarter, our sign-ups had elevated to 600,000 a month, up from around 400,000 a month. Happy to report that during the second quarter, sign-ups were even over that 600,000 mark every month during the quarter. Also, what we said was in the first quarter, what we were seeing was 40% of those new signees were either new or lapsed customers. That number has also ticked up in the second quarter to approaching 46% as new or lapsed customers. So we love the MDR platform. It's making it easier for us to communicate with our customers to encourage full membership, which we know translates into durable and loyal behavior. We're taking those new members on an automated journey with a series of offers to increase their engagement, building mechanisms that are very personal to the customers as they onboard, engage and we retain them. You mentioned driving business inside the store.
Just to give you a specific example, one of the ways that we are encouraging pump-to-store conversion is we were offering spend $5 inside the store, save $0.05 on gas as part of that new customer journey. What we're seeing is that has been very successful. We're also encouraged that those new members are engaging more with the program more often, and we know that they're going to be able to exhibit those loyal behaviors even sooner. So we're thrilled with what we're seeing with the higher sign-ups. That's obviously expanding the top of the loyalty funnel, and we are enhancing our ability to create positive customer relationships that we know is going to help drive future growth. We are continuing to refine the platform and upgrade it to make it better for our customer. So thanks for the question.
Our next question is from the line of Bobby Griffin with Raymond James.
Mindy, I appreciate all the detail on the volumes given in your script. You're getting more and more states flipping to positive volume with really two kind of as the drag, big ones, Colorado and Florida. When you look at the numbers you gave in the prepared remarks, where do you think you are on that competitive curve? Is that drag getting better or worse sequentially from those two states? And is there any gleanings from other states that tell you you're getting towards the bottom of that competitive drag and we might be starting to lap it?
I would hate to call the bottom because I might be surprised with new competitive intensity in other areas. I like that you mentioned Colorado because that does represent at least some hope. While volumes are down, our total volume is down much less than that as we are continuing to open new stores and grab share as well. Margins, just like last quarter, showed improvement, actually up over 20%, as they were in the first quarter. Competitive entry there does remain high, but we're seeing improvement to margins as volumes are redistributing across the new stores. We're seeing some of that in Florida too, where volume continues to be down, but margins are actually healthier. So that may indicate a kind of turn in things. In Texas, which is a large market for us, our volumes are up as that represents a more mature, steady market where we've had a lot of competitive entry, but that entry has normalized and everybody now has their share and knows their place and how to play the game.
So not ready to say it's over because I think we're still going to have competitive pressures, whether it be in Colorado, Florida or some new location. But the recipe continues to endure over time where it's painful in the beginning when competitors come in, same as when we come in, because everybody is competing for that share, and we're going to fight to retain our share of that, too, which results in lower margins for us as those volumes get redistributed. Over time, as competitive entry happens and volume gets reallocated, things get to a new normal with margins actually stabilizing at a higher level than they were before the competitive entry. So we're seeing some green shoots to be able to talk about.
Our next question is from the line of Jacob Aiken-Phillips with Melius Research.
Congrats on the strong results. Bonnie kind of touched on the NTI cadence, but I wanted to reconcile it with the capital spending. NTI is down to about 45 and R&R is approximately 10, but you moved CapEx up. Can you quantify what that additional CapEx is going to land on — construction pull forward, et cetera — and how much of it is timing versus other items? And then as a corollary, how should we think about share buybacks in that context?
Great dual questions. CapEx is trending to the high end of the range as we want to make sure that we deliver on our NTI program, and we will pull forward stores if we need to. So that's part of the estimate in case we're able to do that. We're also making some very proactive life-cycle investments in our existing stores, proactively replacing dispensers, HVAC units, safes, things like that. Rather than fixing a dispenser four times, we're going ahead and replacing a dispenser that we know is nearing the end of life. So we are deliberately refunneling some of our CapEx to those activities. We're also intent on ensuring that we have future growth by investing in our land bank. That is a clear priority for us going forward as well, which again is taking us towards the high end of the range even absent raze-and-rebuild activities. When we think about capital allocation and, in particular, share repurchase, we are definitely going to lean into share repurchase as our capital allocation strategy has not changed.
We're going to deliver capital for growth, and we have a slate of opportunities to do that, but share repurchase does remain one of our main levers, and we will continue to emphasize that as well. The good news is the business throws off enough cash flow for us to be balanced over the sweep of time, and we can afford to continue to grow and accelerate growth with new-to-industry sites while at the same time maintaining disciplined share repurchases.
Our next question is from the line of Brad Thomas with KeyBanc Capital Markets.
Congrats on the quarter. I had a couple of things I want to ask about same-store fuel volumes. Could you give a little color on how that trended through the quarter and how it's been tracking as we've gotten into August? How do you think about retaining these incremental customers that you're bringing in, if you are seeing incremental customers as part of that higher volume? And what efforts might be new to retain those customers that perhaps didn't exist in the past when you sometimes saw a benefit from spikes in gas that led to incremental customers for you?
Okay. That's a very clever way of turning one question into three. I hope I remember all that you wanted me to cover. First, on same-store volumes: we view what we did in the second quarter, volume performance of a positive 0.5%, as very encouraging, especially given the pricing environment because while RBOB prices finished the quarter down 2%, the quarter itself was characterized by a lot of extreme offsetting movements. We saw a run-up in April, down in May versus a flat June. Absolute price level matters — we saw stores above $4 only 18% of the time during the quarter — but price direction matters just as much, if not more. In a rising environment, competitors move higher in response; that compresses spreads across the market and limits our ability to create separation. We saw that in April where same-store was essentially flat to slightly down with that upward increase in prices. When prices fall, competitors react at different speeds and that gives us the opportunity to create separation and drive incremental volume.
That's what we saw in May: RBOB declined 16%, our same-store volume increased 1.6%, which was even more pronounced during the last half of May when RBOB fell 18% and same-store volume ticked up over 2% versus prior year. July started a bit soft with 4th of July holiday impacted by rain across much of our network. The run-up in price during the month impacted our ability to differentiate on price, similar to two of the three months in the second quarter. As we look into August, with only five days of results at the time of this call, volume is actually up 1.5% as the market has dropped some. The key point is volume is performing exactly as we would expect. We opened today with margins in the high 30s, so the margin isn't bad either. May demonstrated and so far August has as well our ability to capture volume when falling wholesale allows us to differentiate on price and meaningfully drive it.
Regarding capabilities versus prior year, I go back to the MDR platform. We now have an increased ability to communicate with our customers, know customer frequency, understand where we may be leaking a trip or two, and drive more targeted promotions to encourage that incremental behavior. So we're in much better shape now that we've got these new customers, and we do have evidence that customers are trading down to a Murphy platform. We have a greater ability to keep them and make them more sticky than we ever had in the past.
Our next question is from Corey Tarlowe with Jefferies.
Great. Mindy, I have one question and a quick follow-up. First, you said August opened in the high 30s for margins. RBOB started to gap down materially at the start of August. What changed versus the second quarter? And more broadly, during periods of prior volatility, fuel supply tends to be a meaningful earnings benefit. Could you provide perspective on what you saw in the quarter and any commentary on how to think about that versus quarter-to-date?
Thanks, Corey. Yes, opening today with margins in the high 30s is actually higher than when we began the month because margins are a function not just of the direction of prices, but of what the competition is doing and how the market is restoring and how quickly that happens, which can vary week-to-week or month-to-month. Also, the timing of a price increase or decrease matters — if it happens close to a weekend, people are already positioned where they're going to be, so you may not see new behavior until the next week. That gives you an example of what August is doing. As prices fall, we get separation and volumes pick up as expected given those conditions. On fuel supply, yes, we are advantaged in this environment. This crisis has impacted supply movements and availability, so our assets and capabilities are magnified — our ability to acquire at the ship channel direct from refinery, ship it up the pipe, and hold it in our terminals or in the third-party terminals where we have access.
That advantage is more meaningful during periods like this versus times when product is ample and you can buy at the rack. In the second quarter, what we call the controllables piece of the business — our ability to acquire product through various mechanisms versus buying at the rack — was advantaged. Last year when product was long and loose, the controllables return was about $0.025, versus over $0.07 this quarter. The uncontrollables will be a function of whether the market is rising or falling. But the controllables piece tells you a lot about whether product is plentiful or scarce. When product is scarce, it underlines why we value the assets and capabilities we have.
Our next question is from Irene Nattel with RBC Capital Markets.
Listening to everything you're saying and taking into consideration that we're likely going to be in a tight supply environment into some point next year — recognizing it's early and we don't know when — but the $0.35 all-in margin that you're conservatively guiding to in the back half of the year, I think, is higher than many would have expected. Should we be thinking about a similar kind of level next year as potential floor? How should we be thinking about it?
Great question, Irene, and thanks for getting back in the queue. We're seeing good margins absent a sustained price falloff, and margins are stabilizing at higher levels when they find the bottom, more so than we've seen previously. Saying $0.35 is doable for the back half of the year is because we're seeing a very stable margin structure and restoration activity has been very rational. While we may see margins fall more quickly from the peaks, they are stabilizing at much higher levels, which is raising the floor. We've seen higher margins before in 2022, and we're seeing margins higher than in 2022 now. Remember that 2025 was not a normal year either; it was abnormal in the opposite direction. The fuel margin story continues to be driven by marginal retailers whose costs are increasing and who are passing that on through higher margin. That's why we're seeing the floor continue to rise every year, giving us confidence that through the back half of this year $0.35 is achievable. If prices do fall pronouncedly, we could outperform that on fuel margin and perhaps volume.
That's very helpful. Do you think this is sustainable as we look ahead to 2026 and 2027? Do you think this represents another sustainable leveling up?
Great question. I think we're continuing to see the virtuous cycle where the breakeven or equilibrium for marginal retailers continues to move higher. I think, yes, we will continue to see that happen. We don't see evidence why that would not continue. Obviously, we're not ready to provide next year's guidance yet; there are many factors to consider. But the support we're seeing in retail margins is incrementally positive to our long-term view of the business, all else being equal. I can't predict the macro, but I can speak to the health of our business: we're executing well, and we're seeing margin even without a price falloff. That is significant.
Our next question is from the line of Daniel Guglielmo with Capital One Securities.
On organic growth, have there been any noticeable changes in construction costs that you've seen at NTIs or raze-and-rebuilds this year?
On the order of magnitude, not huge. Inflation continues to tick up, but that's been the case over the last several years. That increase has been more than compensated for by what's going on with the retail fuel margin. The returns we're generating versus what you would have seen five years ago — while stores cost more, they're actually higher returning just due to this fuel margin impact. So yes, costs are trending higher, but certainly not at an alarming pace and well within the boundaries of the overall return profile given the fuel margin environment.
Our next question is from the line of Brad Thomas with KeyBanc Capital Markets.
I'll try to make this an easy one. Hoping for an update on QuickChek, its performance and how you're thinking about their EBITDA in the second half.
Great question, Brad. Q2 performance at QuickChek is stabilizing. We're seeing food and beverage sales and margin turning positive. We're doing deliberate things to cause that: growing the sandwich category, which is critical; focusing on the economics of offers to drive higher margins; growing bakery and employing recipe engineering for the buttered roll; line extensions where we now offer croissants. Hot and iced coffee results are improving and we've relaunched Free Coffee Fridays; sales and units are up while the broader market struggles. We're evolving QuickChek into a sales-first culture similar to Murphy and seeing stronger promotional response as a result. In Q2, QuickChek had a fantastic candy contest, executed a BOGO, and it performed strongly. Our leadership structure continues to make positive changes from both a culture and store performance perspective. We're focused on improving the basics of the business: labor, shrink, margins and simplifying the operating model. Is it back to where we want it to be? No. But we're turning and headed in the right direction, focused on the right things with the right leadership in place. I'm happy with what we're seeing so far.
Our next question is from the line of Corey Tarlowe with Jefferies.
I had one more related to merchandise performance, specifically for Murphy's stores. I recall performance last quarter was a bit better than the overall fleet and QuickChek. Can you highlight any trends there, focusing on non-nicotine categories?
Nonnicotine performance reflects strength in our core center-of-store categories but is being offset by pressures in things like lottery and beer, which are not unique to Murphy USA. We managed to hold or gain share across all our major merchandise categories and grew overall merchandise contribution dollars, delivering positive margin growth within a customer environment that is under pressure and remaining selective. When you peel under the apple a bit, we saw strength in packaged beverages anchored primarily in energy. Candy faced a tough comp, and we are creatively finding ways to boost that category, finding success in chocolate and also nonchocolate promotions. We ran a limited-time promotion in the second quarter that was hugely successful following a successful limited-time promotion last year. Lottery remains a challenge as consumers' wallets are pinched and they have other online gambling options.
Beer remains a challenge and major suppliers have noted similar trends; consumer preferences are moving away from alcohol — that's an industry trend, not just for us. Overall, results at Murphy USA center store and QuickChek center store are strong. Nicotine is merchandised too, and we continue to take share and drive that category. Our momentum in Q2 demonstrated improved cigarette performance, exceptional pouch momentum, and reinforces our ability to grow and hold share across the entire store, not just nicotine. It demonstrates the strength of our offer and the consistency of demand from customers for whom price matters.
Our next question is from Ed Kelly with Wells Fargo. John Parke, you are back on the line.
Can you talk about the unchanged down guide? I mean, you clearly did better in the first half. Is there anything that suggests you wouldn't be toward the higher end of that range for the year?
You're referring to same-store gallon guidance of down 1% to down 3%. Again, we don't know what's going to happen in the second half. If we continue to have upward swings in price, that's not conducive to us creating separation versus our competitors. What we are not baking in at all is any prolonged decrease in prices where we would have the ability to attract both volume and margin. You can call the results conservative, and that's fair, because if prices do fall for an extended period, we would expect our volume and margin performance to outperform these assumptions. But we would rather guide conservatively and hit it or beat it versus disappoint. We're happy with first-half performance, and total volumes will grow as we add new stores in the fourth quarter. We just don't want to get ahead of ourselves and bank on super high volumes. Let's have something credible that we know we can deliver.
We have reached the end of the Q&A session. I will now turn the call back to Mindy West for closing remarks.
Thank you for your time on the call. We believe our second-quarter performance demonstrates the resilience of our model. Fuels highlighted the strength of our competitive advantages, while merchandise contribution dollars grew despite category pressures. Those results reinforce our confidence in the business, our ability to continue creating value for our customers and our shareholders for the long term. Our go-forward guidance may seem conservative, but that is intentional. Thank you for your interest in Murphy USA, and thanks for joining our call. I look forward to talking to you next time.
This concludes today's call. Thank you for attending. You may now disconnect.