Murphy USA (MUSA) 3 May 182018 Q1 Earnings call transcript

Good morning. Good afternoon. My name is Kim, and I will be your conference operator today. At this time, I would like to welcome everyone to the Murphy USA 2018 First Quarter Results Conference Call. [Operator Instructions] I will now turn the call over to your host, Christian Pikul, Senior Director of Investor Relations. sir. ahead, go Please

comments and Thank comments to today. And made and Clyde, With Q&A. the Officer; Controller. Vice will Chief morning. the Securities Smith, and for of President in XXXX. Andrew, Vice President open we’ll you Mindy of joining Executive and President Executive West, us overview some me including some then of this the Act financial that during Mindy Financial results. the keep you, call, good Q&A Please be the Officer; thank statements an Donnie opening Kim, in After considered everyone and Chief Private mind from Hey, are call provide as Reform Andrew up portion, will Litigation forward-looking defined

no assurances A be will will cause actual differ. given the that results exist may be attained. that or can that these to occur As events projections variety factors of such,

the X-K For Murphy USA further discussion latest update filings. duty any recent takes XX-K, and or Forms no Murphy forward-looking to USA SEC of any statements. risk publicly other factors, please revise see XX-Q,

call, accounting today's or generally do to not we accepted measures provide may conform performance During certain that GAAP. principles also

section call reconcile turn to our have will provided investors with Andrew. part results the Web reported a I non-GAAP We schedules site. to that, the GAAP our press of these found release, the be on measures earnings on With of as basis over which can

brought the We QX will adding color details, welcome results call. financial the that open point up I Mindy trust the truly Thank and of call quarterly is so earnings reviewed to USA's to quarter conference start some Good XXXX some you’ve all Q&A. you, Murphy by before challenging year Christian. the year, morning, the I we home. first to last provide and all and quarter recognize most release, additional

also predictor as proved the full-year that out. We of is XXXX also QX performance performance weakest know

to financial So when in components performance, and our both our our XXXX to looking industry. the are long-term positioning strategy highlight I at want results first quarter three relevant of that competitive

year a This resilience increase all-in largely well gallon First driven our versus From higher a quarter basis $X.XXX a product point XXXX. is many cents margins results $X.X. $X.XX and on saw a business contribution fronts $X.XXX quarter. on perspective, [technical prior equivalent margin the year-over-year on per by gallon we dollars per fuel posted $XXX.X this from in of fuel basis, difficulty] of $XXX.X versus million million business that wholesale retail of contribution first supply which our of the above was showed

From equal. RIN because by as as being were poor an vehicle what would analysts. Year-over-year miles lower out retailers as within is often a were all we margin multiple is rack and down volumes to quarter discussed decline, spot been fewer stood expect actions driven. traffic we’ve environment which an RFS when values January already of we different the dissimilar market entirely conditions deliver to of this speculation last respect due witnessed an our chain, year, a to we significant last prices different due program. performance actions impacting in particularly supply importantly, or midcourse More unlike But sell-off not with RIN improvement in parts in to the offsetting year, to the significantly perspective, argued month wells exceptionally related to of

the we year were we've positions of hand, a few of a just the and made under benefits in prior were supply in perspective, capabilities. where March saw other externalities. the longer-term our investments of volumes fuel assets XXX% On From month there

third-party tightened. maintenance led This USA the shippers to stronger and supply the system allocated when for margins. and pipeline Our internal and both A like margins colonial position created long-term an benefited advantage shippers Murphy our at and price part terminals blending blended environment variances lower own timing planned associated price the more margins. offset prior-year higher higher margins. investments Rising as retail than generated barrels butane we in at uplift in wholesale

and to gallon fuel and While at the its Through first continued $X.XXX labor with quarter model believe we value breakeven the per from demonstrated our reduced resilience. XX our some gallon business, again of to we last across metric model efficiencies once continue improvements points improvement to along point our by focus and on our the business. from have ruthlessly risk, is benefit we $X.XXX supply of QX store per supply maintenance A suggested merchandise about models initiatives the second the that performance nearly in quarter of the year. cost basis

field to to an our investors remains quarter. stores. ask from And extract questions further are continue unequivocal, whether once show opportunities answer potential as who yes, there we again from the We this continued

This about back difficulty] improves efforts resulting and at For labor the our of store reduces just category merchandise to me energy. margins, vendor lowering the has manages further Murphy store. at internal general instance, shrink, what contribution scan-based for both the and SG&A. reduces distinctive the items store merchandise launched USA trading the Which form mix, its product functions lower of in office eliminate inventory This point become working as we eliminates costs third in level growing quarter. merchandise while for, our brings trend of and continues [technical lost the some our same my in initiative strengthens -- complexity This activities, the our initiative center the time. capital

to capital We approach are a maintaining allocation. disciplined

because a in attempting compliance not is the the of evidence to and everyone of to the to a of continue looming While industry the see in the on opportunity. of at private continue transform NEX efforts worried of firms stores many remain to see execute The food being which to ahead level potential. profit of not not was our service models, for [ph] and exit indeed we publicly invested the coming headwinds, around companies their outlook all task a surprise of about remain to model Consequently, succeed. about that going among Murphy traded seen requirements peers see than look will networks event read to to our myself, costs needed the business highest I the USA capital highest store EMV more capital our attending the the on getting it's is reports when we Conference the with downbeat out in sector the X.Xx too but we the opinion high the Xx daunting. per opportunities upbeat legacy at we some multiple. unchanged companies our variety EBITDA Yes, said, and That we’ve face their higher the market, hopes and to business of

in to this our quarter fact, business cash own the others buyers we redirected to is are why the In repurchase quarter. towards remain looking want over which we remain one-time benefit be to we in buying competitive to more our received the in we business our we And make because ability shares active long-term. is repurchased while which close a business, sell, we share confident X million

sets mature will for have crude year. the will QX, stage shareholder setting and environment volume in contribution that in and to benefit and headwinds for another normal which While in enable to The half be view dislocations, were the cost agile fall-off and and we in generate a fuel will strategy operator retail larger margins the significant and believe to volatility and the there lows, our investors. industry we've is, that all of our invested turn result for that for to and period of scale companies the greatest repurchase. our point continue disruptions be are will prices growth productivity externalities value continue a value our Rising continue challenging up could In any endure. spend discuss resilient inevitably our in and wisely to periods the the of April prices over over margins, innovation, for time, develop which environment in ultimately enhancements and I Mindy will eyes and capital we our highs source back large business. associated structures that above actions and compressed With create have long-term to margin to share financials things any of and capabilities improve us QX discuss opening, the retail to will

for spill million of the resolution after-tax was benefit for an earnings before due X.XXX% interest, during of versus state versus quarter largely as was in We Andrew That Total of oil $XXX depreciation of This first of of our up expect on remaining the quarter a The due the million request hi $XX.X and attributable XXXX. matter consisting to long-term effective loan. of same product or $X.X XXXX, discrete million, the in and in follows: was were to $X.XX our was due was XX% sales. $XXX per our settlement everyone. March Revenue term $XXX in value to million period. as lower tax the mentioned Deepwater prices XXXX. to debt the and notes on sheet the still previously due of gallon out was EBITDA, period. future Horizon in merchandise XX.X%. income X% billion $X.XX first due XXXX. to was for the last million notes extent significantly and quarter million expected rate XX% million in prices in value broken Adjusted Net retail $XX all-in rate debt balance carrying tax QX higher Thanks, quarter the higher the $XX.X amortization quarter gasoline quarter during lesser billion XXXX than XX, a versus $X $XXX a first year. do our $XX.X million, a damages million as tax from $XXX XXXX. carrying taxes, Average

the of Using In figures XX under trailing to of that are which approximates million, $XXX sheet. proceeds, expected includes we ratio leverage loan settlement and million amortization $XX on approximately X.Xx. months liabilities EBITDA that balance in net our carrying addition current term these

cap with Our present result $XXX in cash at determination, as of undrawn. net subject end. ABL that limiting debt million approximately million totaled March periodic Cash restricted equivalents facility and cash base in time us is $X.X million place million currently million. the to to at $XXX quarter excluding borrowing facility remains the And $XXX XX, $XXX of approximately of

price in average XXX,XXX repurchases conference quarter Echoing we call, an future the million repurchases remain of repurchased to shares sentiment $XX.X our to about and we conduct quarter, the at fourth committed from share. During we expect There history the of per $XX same at for the by disciplined share course value past quarterly million first other for consistent to amounts our our outstanding demands $XX.X end of balances capital. on the with subject available quarter. and cash common shareholder were way, framed and model shares common

time this range at CapEx. do capital million to and within And we Moving for $XX the to our quarter approximately remain of update. guided the to expect that CapEx concludes $XXX million. our million spending financial $XXX

now Andrew. turn it to So I over will back

Thanks, With the can ahead and to open-up call we Q&A that, operator. go Mindy.

Thank of you. question comes the Ben from [Operator line Instructions] Your Bienvenu Stephens. with first

open. is line Your

Hi. Thanks. Good morning.

Good morning, Ben.

business about tobacco have business. pressure, we’d the thought. business business ask the margin the stronger tobacco considerably as of to well the want than as under I profile margins nontobacco margins Nontobacco

on understanding recent going still merchandise and [multiple been the what's Just in we've the quarters mechanics seeing all-in think sustainable strength speakers]? of how margin you of dynamics that the is in there

there. secular think on other innovation tobacco offsetting some in in tobacco by trends products around decline continued I and the see cigarettes of part smokeless so new the Yes, in we

the net-net, overall. continue to up see when along, our margins improving we We from increases end price pass ratable we manufacturers those

category dollars a margin and that, miss it's the in in contribution. with decline the units grow that associated you continues it So while to traffic

see of And so I we in the well. to trend future same continue more that as think will

the particular, the EBITDA in by the year-over-year And thinking hampered of remainder and higher all-in of on then on fuel the XQ particularly margins retail gallon The the Understood. all-in than all-in while curious the provided above contribution. all-in thinking weaker fuel of just on year, about haven't the in the side requires business, about remainder of per you cents business year you -- range. of EBITDA that year touched the high-end the fuel margins have guys I’m and guys be to are margin light how that about dollar thus today. guidance far for your your considerably

Sure.

you our fall What the things prices range you look see the would set for to price think there's which within. see and that would typical up I normal year we what’s a at two in that year. we structure expect is the in when plans absolute

environment prices margins, the the see at and And start some early so, rising past off, stronger plans, in a the in seeing QX. set falling QX predictor expect to demand, while like up and peaks we the significantly is we good prices, and do future better QX, of then point the QX end of falls the when you and that at

the we how impact driver ago. a in the actually And the and of so much the by in margins year so that. the usually how the where this rising of a and biggest fall in set kind of of months know it volatility this year experts XXXX of we’re hurricanes terms several those right, Horizon the build prices market in effectively we're was itself within was is you so and pricing the what what ranges that's we flatter is flat, some and there, profile seeing crude rising above without industry, structure achieve pretty was of

and see So that we expect fall pattern. to rise

know our continue is we that The that improvements other you business. make Ben, to to thing,

because carrier which are well. strong our pull where see performance year-over-year bodes higher year. seen And actually get whether sharp and contribute more margins stronger for very strong whether we’ve in prices falloff that the we movement and it's the improving stores, at volume prices QX. concerned has a ability way all that the So for that if so in responded a a we whole margin lot well weren't it's seeing as years be up flat margins, the the optimization, the diesel towards as were undermine you where QX up would and later in I’d going of

guys last discernible calendar then XQ implications quick And falling the year timing. pointing question retailers to We bit and color. versus to a fell Did Easter little to benefit as a on one you relative this relates year? that it heard see into earlier XQ as year. for that other this year to any Thanks sales. Easter

XXX.X% to strong and really that up. certainly than into in per really fuel was a but Easter the didn’t We that traffic good March, was XXX% after the of attribute was over moving any March higher about didn't. close XXXX XXXX talked March that volumes coming the We se month. holiday being well for stores translated we to

for questions. Okay, thanks. taking Thanks my

Thanks, Ben.

your Jefferies. Chris Thank line with the next from question you. of Mandeville comes And

is line Your open.

on Hi. should taking just relative CC the Thanks for my results that you range. How guidance we less OpEx to think X.X% questions. solid very Andrew, in about had fees, negative ramp rest will expectation possibly X% the for you year? range of forward internal the or Is that X% going that expectations? the your ahead are OpEx of to that to meet

talked solid was on that of QX got maintenance, We’ve were there. kind some improvements initiatives, the though going cost maintenance So, may and to we saw supply are some we one-time lead about as sustained. cost that

over see better So some and or savings but we’re course supplies model maintenance labor a there of year generate the to we be continue would to the to of going the expect could offsets, improvements areas by efficiencies like. couple the and labor adherence

the guidance feel very the year, about of part and of course our that got we for start. we to sure. over confident but There's So gives always off head takes certainly

acting then chargers small nature, being, you’ve the roughly of the potential Walmart seen you characterize wants question sure competitive it's a these broadly in their second your And end ago? supercenters my intensity to a install And into the high-volume anyone overlap by at XXX operator months all are compared of to you and/or about how XXXX. as well maybe Walmart today, Are six with aware I’m thinking that then EV last the that else sites? more days Okay.

know were continue of that it's overlap to don't views vehicle all bullish in a Walmart today loss when than first the the it's on are economy electric but vehicle the them, expect to provided of and waiting other So are our its vehicles manufacturers, electric whether on and we of haven't etcetera. long-range the more they Cafe I'm all relaxation the it at actually still update subsidies traveled, And on a miles year-ago and some of to parking fuel of to a whether lot. a factors current see vehicle challenges sitting demand I electric standards been I here that I relates versus and to vehicles, we whether electric factors we impact insights impact it's where on states the year-ago create when some administration, the compare lot we the my demand, by

stations charging will to I that makes their So, ought a long cars period time that works of forward very look time, how seeing to where park people short and for be a sense. out. not

to competitive other think seeing come bit fiscal I before is store the to, about down and largely terms if announcements are of 'XX. of a largely we're markets alluded that we've the new calendar which think compared year Walmart the additions, your I new in number was of our year second supercenters we quite year last the just before retailers, in to the made aware around year neighborhood as question they all pressure intensity that, year you their XXXX, for

those And their we in So been once position's established. once as position, come that they and I think have new before well, as typically act additions very new competitors establish diminished. noted rationally

position, get additions, you you’ve rationale where you marketplace. behavior got new to And a in so if see the ultimately fewer more then back

report that really nothing side. to So on new

the next for taking look right. month. forward to you my Thanks All and questions see in

Thank you.

Bonnie Thank And you. from comes the Herzog next with question your line Fargo. Wells of

open. is line Your

and in saw your I Thank number Amazon you that all. you. slow store terms dollars also guys trips And question are etcetera. Thank touch during Hi. also you seeing Andrew stepped-up traffic then, it's the grocery, seeing right. you’re effect. in the Whether a for And I’ve could then of competition? QSRs, industry might quarter the you on if at stores, of what overall All you. call the and on what from

are on store. effect seeing the percent what there Walmart are in by members. as members, know lots. to pickup can't our know at as prime though prime parking continued the What the the out a looking well roll customers as of they segment demographic continue the points towers success our but of comment Good. and is, impacting investment their Amazon and they’re I that that I in I are our don’t there's we

to from we Walmart. or of so And ago intercepts, we to XXX,XXX as trip from customer years XX% the are did few a a our customers noted coming

look more still Walmart Walmart And so do to by to of they’re through get store. to we're they trips ago, store, trips or whether may seeking into it's is are then our and passing refresh program five these better loyalty who those our like. come but to years did than different going there they stores And customers offers the and are or through our our what

to I’m negative be and that walmart.com move seeing means there's high which our stores, online more and to means a that online any from trip their getting up at markets a as picked stores. So effect is not of and that going many model more our people likelihood and

but QSRs and years grow the wrote the you of I dollars useful end of impacted and as stores really are appreciate few the us at million about QSR, service business over money the our the pressure report to we the in with because be capabilities in productivity We our And the sort in and by invested last business. I not food well, of to improvements, had building and if technology food I their the our we We’re pretty older hundreds rebuilding didn't. not stepped-up business scale the in next invested downbeat would summit. allow

the impact or seeing really a QSRs as sell shop many companies few gasoline, the them lot whole started see of that private of and we'll a good than of impact had the that. whatever from other and So not Hoagie

gas about you're margin comment to you going up tobacco if gallons the trips you’re in Your in with fewer units $XX mean, mean, there, to that have of in last buy well general, sort per prices, for trends I familiar I dollars. ability bill, decline the with a the but Higher trip. and make

we’re absolutely associated you that as So seeing trips more well. with and that have

a to so there And environment. is One trips, more right. pluses higher are price and minuses

that in that. when $X low-price X price out as Second XX wasn't is than little retailers, sensitive were their there all of are years who today the customer low-price get below were know there a as But bit the on extra share more get or retailers there's margin starting we price-sensitive we will prices more ago. to

of will gets or them. there so, be to and their who trips And minuses pluses share comes it when fair

Okay. of all limitations especially guess, I C-Store their earlier thinking that the some but made about get versus That���s on an other your five your touch this did broader operators of love store feel in for for and spectrum, thoughts that do maybe helpful. the the I with to you about that I context. M&A. the I box make you as you is given a priority, know you primitize then way company your have about opportunity in you challenged think stepped experience. that, think offerings built three and base? getting position, guys try as out And are end up next you morning of Thanks. be lot but and that your the and what to are as on to hasn't would the could you been you what a in comment any help about sizes? the us I'm expand on structurally business, of And on to in your this see And in-store also just a peers, could your years? at you evolving the us thinking that of have they possibly comments I'm well the about customer peers your any context many opportunities And have

remember Okay. try to I questions. will all those

Big-Box breakeven. they're same is economics, seeking different, to the models both to a certainly achieve Days a that the standalone if competitive which model of in chart and the model. about thing, we hypermarket our go the basically think I lot used you But which zero So say scale, would they're the means back at Analyst I

no So you need from and costs. to your cover to fuel be margin able breakeven

structurally we are versus the disadvantaged So others? not. Absolutely

that structurally significantly a model selling associated by higher advantaged ultimate food items labor way but higher more to trying you about are to when think measure, it to They’re get trying margin and than We the in they’re get different cover there. economics and ever standalone one out a other business. generate been always a center, with at it It's for their going to selling that costs every there. No fuel for is right? be loss, retailer profit to has

And XX,XXX similar say legacy way. ones structurally structurally large selling foot we so, way something but square gallons X,XXX the out are, breakeven. which would got a I in are firms small retailers, advantaged Big-Box month, the disadvantaged to are these best The are the just $X.XX, ones boxes different $X.XX, the and is $X.XX, store, $X.XX the average, they've the XXX formats, the a industry of with that players

a you with missions $X.XX other $X.XX are we're different $X.XX compare Big-Box that that which it's isn't think their but of to poll they're customer NEX $X.XX Data, have with quartile if we absolutely the cited its where Comparing that average, figure I are would our serving industry breakeven just on structural advantaged trips bottom the you different our parity food a that coincident from their breakeven breakeven breakeven companies. So making. to breakeven,

core we that So that continuing behind to strength. build as see reason a

on, capability excited store EBITDA superior that's what stores, stores time-to-time store, is be then legacy that pay that it's their of out three two millions you and distinct get full objects to If of are bring capital you returns, into about stuff dollars, millions that for. chain a line XX% you to and that model, could interesting. was built the our is shiny a might go that is XX% doesn't from a that pivot some hand that. On half at EMV we those acres from of that the the cost -- bottom per will has came capability and that to most refurbishing M&A there tell you're EBITDA at hard point bright maybe, generating really the we that, I side, see side look, when sold premium look that some The towards per a of seeing But distinctive along -- different compliance. to would then with of amount truly there with things

Okay. Thank you.

question of Ryan the Thank Domyancic Blair. William with your you. line And next comes from

open. Your line is

Andrew. Hey, for Thanks questions. taking my good morning,

morning. Good

So pricing you proactively fuel performance? strong were resulted March that there other actions in any or took that gallon that in

into in think no. and it falloff was price had mean, I advantage if had externalities, particular, you so less the a you increase beginning of month a the We a at structure with coming then None the structural will. price you as a towards of month end month month, I the were just from the some pricing standpoint.

similar type different than done have other in environment. And so that we we didn't do any environment would in anything

through find put Street the that on the down be we it's So to so ourselves the and when to take our responsible on have way on gas the way off margin some negative up additional with don't we appropriate of noise comped foot and finally, well. we It same disruption generated it operating was a savings It a of without period. the good flowed lot and and it around cost to still we month margins. in a that just example, stores

So see of more half I and like like without the year like externalities. would see major back that, of the I to to more certainly months would those

the with in end for towards of a program few to summer question, quickly place is the in loyalty national the second and come larger testing for months. year? And then the still hopefully Well, then rollout pilot timeline this on maybe more metros the just those a larger

Absolutely.

our our at here we test doing El a So in Dorado our are beta with Dorado store El employees store. headquarter and

to generate able be like will we that work make for retailer that, and to that that able the be say testing are we and the analytics low pull get us. data looking to the to which in price to everyday dynamic come insights of And program, data so levers an We're out at the this technology. what’s it key going is we're to from

of planning findings, depending We give a of one time run accelerate The make are wallet but need is attracting in for low and on time that this our us, program it, don’t sure still share things that part amount with that develop the a the those is early those to June. right about insights. of pilot big that already we amount new we we given of may shop customers two that, the pilots we to

stated built launch a we haven't And throughout the year running content numbers. likely in from the the guidance pilot any SG&A we we’ve upside the of rest this but built so, into year, margin into of cost in more be with before, program would XXXX the we’ve as our standpoint our And nationally.

Thanks right. for Thanks, Mindy. All Andrew. the Thanks, detail.

Thank your question James. with line Ben of Brownlow from you. the Raymond comes next And

is open. line Your

afternoon. good Hi,

Just hoping and little with the color what touched per bit around was gross -- that more a Andrew, you’re seeing nontobacco give that the could in on side, going and a decline more is store. promotion? in it Just contrast that. bit on Is mix, profit terms back, you you the the of sales color give little the on you I same-store a nontobacco

of jackpots. are to margins March were I March a were those sales same-store mix. way and programs higher the will was good up nontobacco for structured, Those a part really up numbers. so continue it's example. an are [Indiscernible] big X.X%. Yes, X.X%, just as use we see, that,

participation the and card being the in wine, of and and liquor offer of Beverages we’ve programs talked We that of, are month, There as gotten beer, about the some for in and our the we've are as well some added more that increasingly programs. products strong more were destination that a well. stores as additive, to like. out also that because

And well Promotion improvements. a other continue mix that so side from this negative to something on. these to had with we shift work overcome we've as affecting is

Some deal, now of measures the the had having of store at incentives and in past percent range being We broader of focus. Stars items has three products. the that around we've much of Circle on main for which designed look the our kind -- a employees sold

mix the and folks, as how those that changing well. we're so incentivizing well, to helps also so and And improve motivating measuring as -- folks

volatile. of quarter-to-date, PS&W spot you’re rack improving second on helpful. spread the do response is or That’s -- some on albeit And think there's Great. seems excluding think seeing -- that RIN to to RINs? And a more quarter in you still very values? bit what little color a segment, it if aspect like PS&W the that think are the that on true, you Any mark them very lower a that's you seasonality do to

Yes.

think the House and came I the we said, unequivocally the relationship that submission yes, supply between others with RIN believe, and back a and obligation, EPA, around interacted and was there is the So EPA and price. to of point the gates firmly I White that our refinery prices

kind you prices we’ve where so that that, rumors of if supply speculation RIN margin aren't dislocated, of all and based and the seen product in And wholesale as improves. periods will, on and

we've so And to continue expect it. we seen see that that, to relationship and

the Colonial maintenance, allocation We had long-term we see both on long-term That’s system us, shipper. due to independent that time-to-time generally the to facts. committed a tightened also remain expect shippers and up. and like for so have those from good based of dislocations

checks who line negative of money that. of we're smaller players space got got of as part making line lottery, with Some space. They of tired the writing and the off

as that, And with so Colonial back capital long-term we're into over seeing and any time other well. asset come things equilibrium like that like

of up. ratable us expansion of open we ago, that also but essential like those supply, So secure it's years dried equilibrium. seeing seasons evidence for on have believe is we discussions to to programs, that return much A good and this three assets were pretty example

seasonal the So have and pricing be -- to around in you. We where We they shifts made of to responsive that. pool. uplift blending sort inventory to get the value a changes. blending. then chain, We blend from the I see generate come that back just in market structure, and that due significantly opportunity and temporal butane we I to into you value how going those the investments XXXX, across adaptive you're higher think also and manage mentioned those but 'XX. gasoline to butane the to is It's the

So the but on penny there are business. talked a little about profit as this things margins, we've

over can X/XX a adding are So things that start of time. $X.XX up

you. Thank Great.

your the Casella from you. next of with Carla line And comes question Thank JPMorgan.

line open. Your is

Hi.

timeline set of terms the have you of opens opening? your the for timing On the then of right stores now, the development -- you’ve And in the that remainder for the in year? what's

a kind so two have we of effort. Yes, fronted

program will first the bunch So of in and tend December got two of slip We've year-to-date. wrapped a we’ve start that kind part XX opened, raze-and-rebuilds late new the we and time get frame. stores. then that then then up, and open And new three start second some we year, builds of or of tranche November into will which gets as and under October, raze-and-rebuilds construction that more in XX the opened to they

try That’s the whole kind of driving time window. that's the during that XXX two-pronged a we June, can. August openings of period our and time And if July, period, days the of minimize season. summer we lot to So busiest

want everyone on we deck focused all So that. hands on

get So raze-and-rebuilds get then do that, to can we started want kind November stores by they the most open of that the new and can other the time summer open, stores especially we benefit so program, the raze-and-rebuilds from period. to and

great. other been have Okay, answered. My questions

So thank you.

you. Thank

[Operator next Gabelli & of with Damian you. comes Witkowski Your Company. question Instructions] line the from Thank

open. Your line is

sales you X% minus for are at market so losing share share? Andrew, same-store -- volume,

minus right, were with we January, in Well, storms. X%, winter

that’s traveled extended people reported, time. think of I number period vehicle fewest of miles the for month some any

when standpoint. data the that basis March look guess, And official in flat June so in see on same-store a to I I January demand Holding to would out, total strong. is comes have on

I plus expect total at the which greater share. So now if markets, at grow percent, kind including gain volume growing we actually in one of we fuel than about think our new we'd new with do demand think stores, to X%, stores, we'd if probably the industry

own. down to else someone we're it new or get share is, market you if not in So building that in losing a an where holding market individual store our we're

volume of whether half more and grew than over are some doing stores looked builds So that builds, of it we industry function over how the decile, some and the decile declined bottom many so an our share total every maintain We what's from demand, that. the really, and basis, others of half the period stores was total decile or the top number what's it's on did a the or the volume and analysis get we forth.

when other change M&A may So someone of kind or there. you of tactics portfolio get three they rationalize markets, mix it's after their down that decides to to really get in a part competitors two an the are or be closing store-by-store activity the it because, shop basis some or

like I your mean, what selling actually Costco imagine someone can't who entering except I that below is is you maybe someone or doing, that. markets are fuel for

it So just any that so only thing -- is not matters, that new the that's and entrants? but

Yes.

Dallas on a store, gallons. and before one is until instead I gallons, XXX,XXX XXX,XXX that love But used take would IXX But So down. that doing north so exits gallons, highest after be the if in Dallas, opened QuikTrips doing store it's if that, like you our volume interstate of that of doing store on XXX,XXX our to have market store Florida. two opened you West the we

why based and that XXX,XXX have we go and a more lot there, Now meant or hurt on well. I in low a we food. The worse, a named, gallons getting got area that other as are the did, only you've what lot stores that lost you they two convenience or are price. a both either people competitor there's mile some probably when just given it's mile did doing competitors also XXX,XXX fact They ask away or half consumers

so There's Sheetz, like two models, developed and I I we're box the to big different hypermarket Wawas in there's models space. described that there's the the the as models yes, for for us. that kind haves of the have-nots have see they're work, programs There requirement, the the like high that this the fuel up breakeven continue seeing end acquirers think of And and on and you're the hang they get they And hanging weaker as the going ultimately, are And the to their some what time can at on, the well haves. some rolling of market then chains. long have also are the have-nots who acquired. a bottom QuikTrips,

So this in I think going industry. we're the of to continue to have-nots rationalization see

should speakers]. And they anything you've fuel, with from they $XX then gas you that discernible behave? how pointed up, consumer are have have come I because -- prices a to spend that’s think in you in [multiple perspective, more out seeing they mean, on to going frequently

early too Damian. too to early. tell, It's Yes, it's

over monthly In to could like long, data a XXXX companies, we could like had and from where XXXX, this, research extended patterns. but fact, back we former life, those look you data looked really at panel you period discern

to just behavior pick at this able that been that we so And point. know haven't We should exist. apart

there is issue so outlets just other redistributed. more there's a The gets priced it lot low out

Thank you.

welcome. You’re

line Thank And you. next your the Chris Jefferies. question from with comes Mandeville of

line is open. Your

the how of entirely terms format, difference for express they're recent thanks any of call as out you is new Hey, follow-up. there Andrew, to kind pivot terms could ramping the of that in prior observable store in you just vintages? performance, versus

Yes.

go ramp look state performance and improvement continuing ramp stores, so 'XX, minimum customers those. seeing in Yes, all restrictions you get have because year-on-year 'XX, on to don't it's the So else few price 'XX if to the think they're if lot at back the it's somewhere the tax class, you tobacco up, new easier versus a in see up, think I months, we're if those those a them market. for differences not you I

period look for when we the those. hurricane focus if think for to you As same even we're the had anomalies, doing acceptance to is shortages you promotional stores year, during need to stores severe you better expect from you way a those I at see to couldn’t we from We’d also we and customer we opened the can build the the -- did. And one them things attractive last you did activity other 'XX some to our at gain 'XX, across processes. the open opening a Do 'XX, we've about We out. the to and looking continue the standpoint make stores year refine of sure markets, that portfolio supply most think left mix three Walmart the class. geographic on got continue that USA store this

meet more on recent more raze-and-rebuilds or exceed current The format, we've about the dispensers, terms continue nothing So bottom classes of the to versus new a more ramp the expectations what offers those. up, is product continue line to delivering in talked also before. better

we advantage, structural So very unable have haves the the given and we the reinvesting those have their back because end returns rebuild we stores economics. chains life. would especially The to those, stores, weaker at these and the talked stores about about have-nots, we reinvestment what on out And they those kind useful the be of we have the continue get to in encouraged again, are return of because be returns. can little those because achieve there breakeven, we're

about you going relate Okay. the it of and/or downtime raze-and-rebuilds. to the anything in is And Is which currently there then there to think that does could trends help from call maybe anything lastly, impacting to as out terms just volume you’ve how notable us forward? that’s

No.

release gallon why the now dispensers, the and XXX,XXX, so on But XX they come back stores that's say, and period are one tend would a fleet those time, when focus I take they want XXX,XXX much our this out for the for of that -- class same-store out it's that that and the raze-and-rebuild in or we a analysis at of right? that. we are here tables and that like XXXX on stores the is the way down all bites of portfolio, we are part great new down we stores of got that to to years take store really And numbers, the really performing the month break the at more do. of consistent look base why to class internally the think but by then build thing metrics have and class it pretty that’s some same-store and that we doing old, We -- I report we’ve same-store bigger XXX,XXX, lot and the number sale four per average five stores we that both are earnings stores, by raze-and-rebuild a older. look of

right. again. All Thanks,

Yes.

And next line from Wells question your the you. of Hunt comes Bryan Fargo. Thank with

Your line is open.

mean, historically, an earlier a chase find whether look for mentioned follow what store Walmart. you fewer of attractive in you're they're could looking and there's I around? idea two new stores. that lot When Andrew. the time, give us and was wondering a I your to for Thanks opening or call you you you retailer strategy opening you that

Yes.

aggregator productive traffic the and is that stores have there. they’re it of so made greatest about So price thing on the a third following just around strategy, Walmart average less same And had the others world's sensitive many grocery customers.

there So it's -- are great a proxy for traffic.

other there proxies that. are so for And good

boxes, got whether it's a other If chains home along the same improvement thoroughfare other traffic. big that you’ve generates or

follow also And so why again, right? back markets, to if is you sense go And XX%, so our that’s in made fleet rural historically, it XX% of them.

left you intersections market rural locations the attractive been so have more suburban are and saturated, are out built ones, there. there the urban with and As

traffic in away by we going the X,XXX locations Supercenter. prior to we'd the target in continuing high five which at more are from that’s building definition, we store. key an square larger foot be As those to our Walmart And be in-field calls, of markets modular discussed

proxy C. for So we're discounter reins it's it's that. or hey, going attach It's about go to less home traffic. for the A store but been just about saying, proxy merchant great improvement mass our has store not B to or only supercenter grocery a The that,

follow-up, business. a talked whole breakevens earlier you I the across as just about And mean,

I modular perspective? a X,XXX locations square feet, than mean, is fuel from velocity that -- the For the higher the it for breakeven is different box materially

margin higher, is higher. the is much The is. the higher, not sales labor higher, It that the mix higher, are is but

And you can And foot to with to kind of end-up just step to the coming offerings that cave footprint program. find balance. stick the you're the kind benefits. the maximize way you into add over kitchen, all you strike have having actually and that built. set then X,XXX model you for you chasm square to a a when this a a of where need to different square right of models, broader is is X,XXX X,XXX versus commissary foot type need got just a and beer us. or the get which And of short so model, of have We you've And at we categories, to that looked

when last inventory my give think can question Greenfield how you idea looks like? -- locations, then And many us that I an is about what

Yes.

expect stores we XX, So to the of share plan build look, levels, approach. pipeline we our just XX have at new balanced between then allocate to talk those up mix continue and the new do a is don’t balance and could for and capital kind to inventory. say, here builds have our typically about about with repurchase raze-and-rebuild on and We

and for luck. best you your Thank of time,

you. Thank

the you. call to Thank at presenters There this the remarks. will no closing turn for are back time. questions further I

you you. Great. time thank best. today the and for Well, and Thank your interest, all

and this today’s gentlemen, Ladies call. concludes conference

You may now disconnect.