Murphy USA (MUSA) 5 Aug 182018 Q2 Earnings call transcript

Good morning. My name is Sheryl, and I will be your conference operator today. At this time, I would like to welcome everyone to the Murphy USA Second Quarter Earnings Conference Call. [Operator Instructions] Christian Pikul, you may begin your conference.

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

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

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

to not call, Accounting Principles today's that measures During do GAAP. may performance we Generally Accepted certain provide conform also or

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

hard major the improvement results the first quarter, both details, Murphy Christian. broad-based the quarter. quarter, and the across you before QX Mindy company USA Thank welcome to we the From an year-over-year a it's sequential operational some benign I for metrics, the followed results basis. themes This and I financial both reviewing showed all open to key release, Q&A. financial Quarter the delivered and Good will in solid which Call. you, for so year. have fairly our XXXX Conference on rest morning, earnings performance call extrapolate second Second performance reviewed the to trust perspective, of all start up and additional by from the provide

on I four my backdrop, like themes. to would comments focus given So that

Wholesale inventory decline additive and caused supplying incrementally basis well. blending prices. perform values we quarter contribution And as in second create margins quarter performance price by same-store higher from the X.X% together, retail fuel the RIN price but wholesale in to we offset and is up in per The positive to making in impact and variances rising periods, and consumers. improvement the been headwinds, First, sensitive product even offset led half customers competitive can timing in and up fundamental typically headwinds. margin offer to the breakeven prices, sales. and per and positioned and as offset as are year second volume challenging less the continued oil weakness business for These the fuel as half the line gallon, the higher for quarter, win the product $X.XXX product of first to margins by to on which $X.XXX supply have margins volume their of sales Murphy more reversed having the less ultimately seen appealing price competitors margin also our crude have higher, higher trends a The in positive importantly, into expected, year-to-date. year-over-year even this price the on strong most continued prior USA of of merchandise leading to become seeing their continued environment, evidenced gallon and have cost as versus to year. only are decline July continues weaker on have business a well in pushing to a industry

total of growth Merchandise and second higher sales tobacco in margin of quarter, million led margin nontobacco execute core the leading grew to support our per field improve due growth contribution declined a and supply successfully by month are company. the cost. X.X% XX.X%, improvement X.X% also business. to largely level basis, same-store OpEx for dollars while $X dollars functions of and maintenance a on by in record have X.X%, store X.X% continue level we and Second, nearly implemented Store in new to unit margins efficiencies we

As breakeven a our basis fuel result, on from and metric year-to-date XXXX has XX points improved a both perspective quarter-to-date nearly levels.

further and a while fuel lower in is potential to ongoing face win of down, initiatives the sight we our bottom-line reason inflation. environment This provide cost and positioning in improvements. enhances wage come of which credit card our continues to Another fees high top breakeven, and line competitive price higher

fuel are an competitive more on apples-to-apples XXXX As such, gallon per $X.XX the year-to-date, we gallon quartile the the first benchmark data basis. NEX than breakeven level with $X.XX per from

and and we current determine, stage stores engages the dynamic to North in pilot a an the value our on first pilot, which X viable successfully economically distinct proposition executed we create both way. intended to that if prospective Third, June in of loyalty Tennessee. launched and program through have is Texas customers can XXX The

legal app ready effort running While and as delivered and for to that and notable up The like after and marketing for of who And multiple I point-of-sale that, we first launch. their as systems, we potential platform functions, program yet team a both the from services tireless web and as adoption national well the concept partners. achievement mobile gotten successful development, touches of intended, celebrate; thank most in-store our and and vendor answer accounting for us intensive would course, in proof efforts, cannot of works technology dispensers, the loyalty can months that consumer functions oversight there back-office is have technical milestones planning are important an several that perspective. and systems, is question, we fuel organization-wide have

participated now our the stage third-party more customer associates. always or change changing earning program, the shifted rewards. is or including prices to some even said, customer To-date, seek the earning mutually participating world us higher customers we merchandise discount members. is fuel magnitude one technology the Price-sensitive everyday on to customers customer to of value offers. drive straightforward. in being We internal and order in according companies The X% help can in customer and must our will move value and develop low-price of we formula. than second per is, is in and an inflation offer that pretty of wallet and how In we where low-price beauty of who're other for creating potentially of tremendous behavior everyday and insights of team an program through about distinctive, beneficial our manner, our or members towards seek their asset, behaviors program burning and loyalty greatest our a low-price would to not partners. the burning to platform our winning at journey but transactions what's customers have to focus since friendly result prices customer Sign-ups store XX% way. managers feedback This positive store improve in technical allows of These We've with be exciting with our well experience engaged just Drive vast accomplishment rewards can marketing then their a and experience a share an early be our additional encouraging of above our the But raise are behavior The of XX% expectations quickly fully prices lowest higher knowledge The friends step signing customers an day customer our which only engaged more by our per of and that more is creating is greater share on see the two are and to Murphy and to majority a family. whom up. retailer participate their Murphy and have are programming, Tennessee. and your million approximately population customers state nearly influenced stores. able

In our I in which ongoing The shareholders. be to asking pilots adjacent very their theme; we coming and to our have is when final fact, want store, will to customers commitment fourth markets encouraging. discuss is it us to

result track total we at about to our our model price expectations, below about the Ongoing of investment an shift which average business. will This the an potential average shares to buying further crude to volatility. will it to our in continue manner to of $XX, our During lead will million. year-to-date we not USA's around around volatility business, core price of evaluation brings spots repurchased share of when shares This long-term and per quarter, at of of our with in outlook, around million. well be advantages, repurchases for inevitably I and pick fundamentals an an representing innovation million our over two that, in total investment our shares business view X.X in continues price record price with a and that occur reflect our shareholders. million $XX share strong turn Murphy at $XXX will share With $XX opportunistic execution short-term view are margin does sustained And and to a unpredictable our multiples Mindy. win discount fuel continue of or

$XX.X X% was year year was second $X.XX million to share our prior to in balance the consisting primarily in sheet million Long-term $XXX federal million the million versus loan. line everyone. higher to on billion $X.XX million the of tax during $XXX due $XXX Total were XXXX. retail Accordingly, of versus higher a rate XXXX, carrying to earnings however, per of in per attributable amortization sales. the year. million the second the to gallon from prices quarter before income gallon Average Earnings was $X.XX primarily was XXXX. EBITDA in period year. a than also quarter of our of rate lower earnings billion remaining XXXX; due fuel fewer debt This as ran than XX, with term $XXX.X prior share product extent per of million. was due per prices a versus second outstanding. value in in broken value follows: June XXXX; same lower which hi, XX% for ago's quarter quarter million, in that due lesser $X.X in out $X.XXXX Revenue was slightly X.XXX% and for or margins, our $X.XX the last lower was was lower $XX EBITDA taxes, the were debt and on and $XXX $XXX effect. and of of gallon quarter that's rate for in Thanks, effective down to $XXX.X $XX.X the tax now carrying higher The quarter Andrew, second and the the notes and net the as million notes largely versus shares and merchandise $X.X Adjusted our of $X.XXXX depreciation gasoline guidance, per million,

to carrying leverage results the In which amortization million addition, in on the expected we lenders approximately and $XX current These ratio, are we balance adjusted report of our liabilities under term figures, sheet. of X.Xx. loan

Our $XXX of June million $XXX approximately a borrowing and facility XX, resulting million that currently a equivalents limiting net place time as the debt $XXX of is And base to cash determinations, approximately remains of totaled at to undrawn. $XX.X present ABL periodic in XX. facility cap, Cash as us million. with subject June million

subject committed as $XX. the our price in we by shares shareholder future as million may repurchases, cash quarter. as at During do to to expect disciplined $XX.X for end There was conduct we be repurchases opportunities and an first not about the remain and we framed share allow balances activated. which common the the Andrew's way, repurchased common outstanding shares on comment; course, Echoing same $XX.X average million value sugars, well capital X.X of quarter, million to price demands model other and were available to

million. Turning range approximately to quarter update. do our $XX for financial time, capital to we capital $XXX bringing the to million. spend to $XX That expenditures this And at year-to-date concludes the of remain expect $XXX our our within CapEx; million, were roughly guided spending million

now over back to turn will I So, Andrew. it

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

first Our Jefferies. Mandeville open. line of comes [Operator Mandeville, your Christopher Christopher is question from Instructions] of the line

Our next of Bienvenu then question come Stephens. will Ben from

strongest standout I the single to ask expectations for want relative particular, the to gallons about in the metric our was that quarter.

strengthen backdrop stack the color rebuilds X-year helped company-specific for general or what any particularly might can shifted on basis, to was that have that around your the in market might it's within it whether positioning operating you Just raising metric, have lead strong? pretty initiatives, provide a

year-over-year expecting noted to Yes, of impact I tempered, the level of intensity its that think so we've see not same before effect that. and of the and had competitive some

and environment. prices, Just that we're positive the is a second price continued the with volatility, a price year, starting XXXX execution our pricing more pretty standpoint. from was get flat was -- you following a end of Certainly, the beneficial. in from which quarter the half run-up downside of so

think I macro that So contributed decent all there. factors, coupled with

So I majority of think those probably it. explain the

side, merchandise then longer-term relative what the think, far. what are the like? in and And on well pretty the opportunities then then looks what would continue impressive margins this mix been outperform, And think thus of business, you it's I to we have key period seen? have thought you beyond what do year-to-date, the you've exceeded drivers the possible execution to but

Sure.

decline the very cigarette a tobacco products is in side, very strong just category, then some products we there. tobacco of of we as And And see promotional help on got some the electronic offset on normal better cigarette as Beverages the optimize some and really although just well promotion very, to dollars vapor as that of performed products there manufacturing the our other quarter. had offers continue strongly quarter. some So the and we the to relate well. pricing

So with to continues components. biggest just those the jackpot are add well. incrementally large the two as Lottery probably

further So to our been some space still we've capabilities improvement and store opportunity of as visual we've working management and center see that said, of merchandising we start really as optimize implementing build. our we in

next question comes Fargo. the from Wells Herzog Bonnie line of Your of

about pricing. had I a question

rising companies given transportation inflation are price increases, to commodity So take and a lot cost. consumer of needing

do And stick? to your hear they'll how to right prices other thoughts to strategy be accept think or How position as higher perspective your prices? of think curious you about willing enough your now? have think in provider. consumer pressure you environment it strong being these retailers And think words, prices? then your been is accept the just low-cost and raise facing about you on whether higher other these greater this not from to So may In do you the

two competitor-facing. say, would pricing through I lenses, Sure. customer-facing we at look and

need from so And that And fuel have be categories tobacco, consumer's low competitor in where offer. always standpoint. and we you to price everyday mind got we positioned do the responsibly have a like as to it

we maintain at so those two And position. hand-in-hand to to have closely that look

bottom and are to tend the more like pricers categories and move more that carbonated than price away environment the and to up the As maintaining so happened forth, I drinks for that preserve margin soft weaker said, But impulse and of of $X $X.XX with consumers in distinct $X the more to beverage are and going market environment to can have pricing any narcissist products. associated with have we're from dramatically seen the are from those behaviors normal increases $X shift CSDs there. a We've kind trip. quickly inflation higher-price price create players positioning. to increase where other on There the always be focused other

to And across categories didn't will increases of any create razor-sharp the those add in price smarter standpoint. of a really ones we'll items once gains to of be seen our have to prices still the on. the typical we where kind to the So past from a some we hopefully, up. job continue CPG you'll which take versus had moving holding And lower be we've about in value at didn't price good store for on so lot volume just be But a line moving come imagine, see with can up center those, with that I from being some see able our products innovation think of increases, we're as do We but of customers. and value going

my And then decent in on second guidance; full-year it still is half. back implies your a just question ramp the

I to what understand natural given right And you and going now, hit to much just ranges then visibility possibly the confidence, able for guidance you're know, may disaster? that's you everything net I So have income a want on? be gives to specifically your absent, going EBITDA be how don't

Yes.

know, On bottom but X is on have be control, can the of good a we fuel the function margins. we've visibility absolutely going you things line that as And Bonnie, on, visibility we to that.

other how and have if of we how That's normal a maybe said, couple oh, think set our I guidance, you seasonally that's seasonally We hit you your we analyst to plan, our guidance. Dan for margins. can look build abnormal events don't happen.

guidance we going or like If know to hit have and And And miss there's If so run-up I we have we our continued or out guidance achieve have our it. do, have in are achieve don't, normal XXXX we a water, to angst may of and follow-up seasonally a going numbers not? can below of that. we the prices we lot to to about, we're guidance. our a

unproductive you the it have $X.XXX We as about If to we're XXXX per or guidance you business, and right? angst. lot guidance angst so an would unreasonable going minus isn't And we plus completely about The guidance, try the non-informative to which gallon, anxiety we investors a RIN, more and analyst, a cent get find consider around this it because a we gallon, gave if around to it. think narrow right?

that's to to road So clear frankly, that think to given line, the the bottom how but effects ongoing we line, margin about going have bumps we helpful. next the a to on year, might going from And have rest look make we're grow improvements into cost, line business, value. storms, But year of provide that year, you along hard that's our love to long-term angst dollars, a advance, visibility abnormal in impact our weather, have got And what significant regulations, and environment, And business. I going etcetera, sight this do and we hope we're a I to do. etcetera, sure normal to it guidance in going margins hear given margin business, just it. the which are are we're no continue get, know better, to normalized driving of to continue shareholder different, we'd we So the how if top question.

what for I as all we completely That's build models And yes, really expressed helpful. our understand we just and your appreciated. company, think try you

line question from of of JP the comes next John Your Morgan. Royall

given EBITDA, have buyback, low seems essentially which be XH? debt drew down at to is to in balance line on the cash and that that roughly cash to to appears you be should So net the buyback Xx near this you fair funded are this cash levels, quarter, in free relatively with expect

talked to Yes, that's always subject cash share we've price that And we kind to obviously. John, have when the will we of conditions we allocate extra feel free about. model, flow, repurchase,

would allowed are -- what that we wound down balances in have chunks say cash which from us did the past. buy sales So I we we is, to previously, stock of big asset our

right And free going have so as CapEx We're repurchases. to are a of much left we now, cash as not do share cash to nearing flow flow more parity.

account do, be judicious those into not, to well those. what fact, always available are going be triggers activated. we're we our and on quarter-by-quarter as those as with may instituting we capital disciplined in So what price Taking cash have, calls other do as

where may we purchase and some we few may So where then have quite some we quarters, a have we don't. shares

nearing fifth the have a our And new to repurchase share our stores of of of period. in strength of fact, think billion as $X balanced XXX also anniversary And same over repurchase. also reflects at a I that are public and we really the being company. that's approach that right during opened business here committed testament we're still We share

past. we just that we those we still in continuing with But we're committed We those the same to cash our had that life. earlier of sales, the emphasis not large public when we enjoyed asset doing to have going floods in that. have So big company are

margin. about even of margins, couple the had that falling very RINs you strength And PS&W face obviously, PS&W have last RINs that plus then strong can of guys quarters talk the the implies, and you

there anything So on anything going is more Or the there entire with is maybe transitory? structural levels?

don't thing investors the the the built sound gasoline this record, to So a EPA, same like John, it's of gate. we on thing price price but want talk at we thing I about said to is broken we to of the is said the same call, that into RIN refinery same the the

go spot-to-rack exactly you towards that's prices, the increases as RIN margin so seen what happen. And and we lower have

relationship distortions big about of regulatory have the Our then scheme. but didn't different as towards you changes point concern you in obligation the that that, market wasn't in could move exist,

prices baked what margin they're what we going to are price, that's see do, expect the So no idea but seen into spot-to-rack and happen. exactly to the have refinery RIN improve gate given we we've

the allocated, impact and market Now there that margin, colonials long is tight short are other factors spot-to-rack the loose etcetera. and whether for

standpoint. so regulatory in system those move affected RINs that in things less independently to each do continue but that We're uncertainty the last positively QX year of noise and the of and XXXX. other, from And political QX in maybe disproportionately seeing

resulting the price the so range. the piece and And environment, margins that difference accounting that period an improvement rising and within price decline as offsets a rising work a the timing timing inventory it trading margin. variance cycle in the where reported clear retail the see environment, in falling conversely margin retail and stronger well, and be cycle a we the business the variance on But that within inventory of and you PS&W was that is to provide the in does price retail margin the have from in against

So rising with had that some of that period, associated was that. in benefit price a we

we and to those when We value our to over and those made improvements expansion out recently the ethanol biodiesel, of butane opportunities arise. terminals more in more continue get terms years also blending, of

also set towards that margin And a the whole so on contributing there's are of that. things

comes Domyancic William Blair. from of Ryan the line Your next question of

And it's taking build and ever on first my Xx it last regarding for higher? would this question consider business, capital the leverage is question So you John's a structure. rate bit

in that, Taking business also we to that what be stores. needs some still we unrestrict the leverage volatility we that leverage this and said withstand our there of deploying nicely basis buy below And we also the we shares. within be to We've account standpoint. can our covenants that, we've be so remain bank to way agreements prices, that a is are X.Xx that our in spent it within could some coincides way actually our from business have an and that on unrestricted that need thinks which capital, into and this we think ties back with able consistent But where consistent to with if in been the of quarter-to-quarter, new to the periods crump margins. rising need we do business we we

so comfortable higher we as be year. into would with be budget than next will our we're slightly not but discussions go being X.Xx, now. And next we want to CapEx above beginning what year, we for to And we are have just

cash us. to but for what instance, things the still need leave are next year, expecting are then where but don't that, some days top-up at we're for and baked our things, be of But in to a it at now plans that be of of we seems initiatives, on coming capital whether all have our the the in what stores, we're fully early those we so that leverage look But the and being rebuilds from on we is. various months. And will kaleidoscope going us kind look at at repurchase we of to term any were then we right decide basis. if going share either. working happy to, raise calls we're for loan there at at reasonable from X.XXx, so bother or X.Xx, various furnished And looking And wouldn't we're then flow a

be, that very bit on then and gallons. maybe of expense software overview on the helpful. side, you getting the a talked question past, is would next sharper And retail even using about at pricing in the the Mindy,

as versus the more of this of was the year, to pricing, comes of even at are retail logical look of expense pricing key it any that you last kind as of quarter better is result parts year that sharper out fuel So that the margin growth? gallon when second a

I say, and some it. specific growth, where and we with being yes, both focused we also margins areas, sharper it on, from would came got higher volume then volumes about

James. question Ben comes line next from of Your the Raymond of Brownlow

On the program, that the just kind now? for And thanks timing stores the of kind that as rollout just you gave. will initial initiatives on the total you us timing you around X, the Can loyalty that -- that elaborate tell around the as well stage that step the entail? program points the data of of could are the comment ballpark and what number into on national strategic that

Sure.

million customers, create signed registered are just great XXX XX% to value North stores have key price have and isn't almost that from out This sales roughly it's or one and it's for said So like get a know right? who up. response that We of discount items to entire XX%, customer the that this, sell to up The it. proprietary platform months. want that customers as signed is X% before, there Tennessee and and our at get What's margins. your free Texas in associates the offer a has it, on And in buy it State X, many raise State we've the of works, can Tennessee. Xth two been amazing the is a

need them. as we're drove gallons an new very out store we've driving already visit existing value given baskets the create them us giving segment share trip of incremental and often. from And platform, this, we that and value right? desired drive different who and confident we incremental able that see, these create on of the -- loyal to support can to get it the way customers additional the Because get unique more the make set And up viable then wallet then to kind to information that us. from then so journeys inside them the economically more for customers feel the customers background for uniquely we we for of value create greater segments, top got don't the are And can have our so what then is we're we and then bigger and behaviors come able and to we've customers, we're who

too national customer done was a hey, in to engaging the we of expectations what have to in then of national that. launch at associated it's of seeing with sign-up So rate and the early the we're a have or platform, level execution faster but rate going October technical and then better January, say, the launch standing

we're their got, this. June are results. just issues into to those are often of now platform not baskets, that challenge we and to programs that do of and and like the experiencing sort economics the have can getting this are early the to we're the heart so gallons from work very we've those challenge, of July We're encouraged insight the by make the that tremendous going their with So how increasing We loyal members see etcetera. increasing

seeing still that needed this to make it's early in behavior shifts but were are very days, So economically we viable. we know

around the cigarette within the there any pricing? same-store and unit can in give you the color sales movement tobacco On category,

Yes, so or want to cigarettes talk you overall tobacco? about -- on

-- don't if have actually, you Both it. if you

of got our see that vapor so stores. products and smokeless there products volume other the of tobacco across other all Yes, tobacco we've volumes products is rolled strong now some new and out out both where the and you were

activity. -- sort in of growth we'll ranges promotion or there. so of dollar from volume seen, we because see declines to to normalized effectiveness pricing within strength that continue cigarette the we've but The see continue that And saw margin are

from line the of of Jefferies. Your Chris next comes question Mandeville

if versus in consumer answered; maybe or on comments an that's what starting apologizing the first anything half. Was positive for but seemed the actually seen second relative and on I the already your you've repeat the comment of quarter? of Although half been trend, demand fuel QX latter first absolute half

repeat part, you Sorry, that could last again?

absolute having second relative positive you're Just QX in of the that terms an was trend, saw that of reference or half statement?

XXX% were periods a price a the with on greater kind had where volumes year-over-year or on So extended basis. falling we basis environment, same-store of

of new With with grew a basis. So total same-store it actually stores, volume. new we stores, XXX% was on kind

or steady from type making X% improvements And to to But in seeing fuel we're going we that the X% ago are abnormal years level range, we growth with demand at getting we're a X% we we're seeing macro from standpoint, so with I environment. risk effects, the range. two the X.X%, not think that well broader in saw growth three perform believe the of

we've sensitive, it's gaining the higher, we As price share years past that lost that's we'll so And environment extended that get over continue prices freeze important increase low-price focus in they're with on more well. consumers go to going the that more as metric, why metrics to like seen standards prices. few higher back so start our morning It the which than fees fuel XXXX, were credit associated the for efficiency announced card vehicle offset projected breakeven was XXXX. this that to

did what well. was ago, day the And we over we so where our macro as years, standpoint from all XX do going think you positive if X.X years demand go to showed, next from that's to back that fuel presentation analyst

environment, despite a more think the consumers so well sensitive. actually we bit we're positioned get that higher price price as And in little

compare really that into quite on fuel comps. easy And assume so that given QX the I going

hurricane of sales that impact in-store continue prior same-store momentum seen we also Given actual positive sales? what would and type the you from bode had for presumably could of the year's well that kind

going discussion. a and Yes, as we're third to I beat if have our said, different can't conference talked at we comp, that quarter your

then, ahead current for to less you're card up your originally turning of was per well calling And to X% year-on-year. guidance flat fees; credit store OpEx that really

Are in So and we item a internal anticipate should right of we that your plan ahead or expectations should you you on going pickup second forward? view how line half?

Yes, so building in upon next prior further honing execution leaders expectations, terms the team and in on we've initiatives. the and internal prior and got a set just consistently just now initiatives of that for initiatives of of looking site-level further are of

we as experienced brought districts, taking some more and greater current consolidated We've on on people are division. staff one responsibility. consolidated we've So

but line cost initiatives next sight as as So of well a standpoint. we standpoint both on as a initiatives already some we're into little probably a from year-to-date, ahead margin for well have year

top we there's the and business, focus ongoing have as to back trajectory of positioning almost next say, which wave we're line step for that, look, I to So improve set bottom-line. you immediately to for and this And knock think we're an through continuing of going on just to just one ourselves and initiatives, we're opportunities.

Just with performance the vintages respect some recent to or returns of any of raising rebuilds; on there? comments

dispensers highest on out when of one square four probably are to perform we to and from eight and standpoint. greater diesel get continue our and The have X,XXX gas to a and gas customer, access XX% industry often foot These a store very store, selling six raise stores convenient the benefit diesel our the over you six that a volume at of -- products, to dispenser, so again increasing to just which you're lead well. of stores are eight some diesel the increasing with rebuilds

continue to improvements from them. see we the positive So

Matt from the of [Operator [ph] Instructions] line Our next of comes question HITE.

shifting I of So than positively. we was lot if guidance for your for think margin, again of range just midpoint which a look this an us the well -- view expected, understanding the the is the a at think PS&W How stronger us as give of as than through-the-cycle the is retail at sense Or of that cost normalized range? the you the do normalized sort structure? margin of current your Does midpoint of different what margin. quite

can lot to find a is probably about a for net the business price that. scenarios at improvements the short-term business sustainable levels. to about well structure And perform thinking standpoint. the fluctuations, that's from built despite products talked midpoint think longer as get normalized that's then wholesale $X.XXXX market sense I in range we've retail, RINs, is. Yes, level. range continue to that And long-run have term, $X.XXXX $X.XX of you And that a a to for $X.XXXX margin very to or what that a -- $X.XX $X.XX of on make different to $X.XX good of we we going structure But to believe $X.XX

some see So improvements the think some get the carrier some we the And of challenge rising by performance the terminal, optimization wholesale in massed the I we about is sometimes improvement, harder the structural falling structural say, talked margins, that the than short-term impairments improvements difficult or see makes could might some well, the underlying of you it one we it that project. make. just it have. to it of investments of Conversely makes where

staying. pipeline, for those talked queue very going advantage, or us. people play is important using that this midpoints think, of we're colonial down if But if year good value. way that's long-term I a advantage about with that earlier kind We for saw in So away a

we your is improvement And so understand your of in kind then net of if structural what that time. been, we structure? sense several us at a guidance you've margin back at can I guess, and to that been if least we're give what of improvement of your the trying go made look sort you've has internal the of years over able view

Yes.

movement this that mostly midpoint And is then excess so is this; last a interpretation? in the in to question commodity on fact that the prices versus midpoint generally year-to-date quarter in PS&W then, versus fair that attributable

XX% -- margin, with the timing would you the the netted and then than environment. Yes, the in accounting against rising and price which trading cycle, if cycle be a reflects wider more that a retail which associated variance inventory

gallons are butane talked play, agreements oversupplied think market depressed first higher more everything margin. of more the price blending may half rack at we just the rack the But our about improvements by low higher things strong which hand-in-hand throughputs our almost of as positively other where a move levels not can netbacks. negatively there as prices You at offset the only impacted seasonal from structure. selling would a market's and or got system sort they then are perform year, existing say we of and price. with be structure. and is positively two renegotiated about terminals those product have the And proprietary supply those enhance is The at together, or that the in favorable buying more wholesale If

that, sort I So and do continue? see to can history of you think low-hanging going structural if this find, do it's Is several is, you've opportunities the been we that think fruit last you've to you which improvement that kind point what able to extent, or years? make, just at impressive. at we're been back of continue look able really what go To commensurate the in done of do to

as structure of less more starts part you it. tools. across I of things line say cost It's our opportunities Yes, bottom are to The there everyone and not, low-hanging structure. or and blending requiring set different. this I margin across-the-board, would doing is business systems line optimization about none improve for fruit easy and be would mean, our every more capabilities, top describe that's just like, be or capital opportunity the spending may Whether looking or

here's working distribution with get XX get there. the store Some bottom of on their performance which to we of average you discussions to type metrics how Core-Mark And stores; saying, them different district the up walk the excellence around the managers is breakeven about managers and performance, X,XXX first quartile the round of and of for their okay, labor, contract. lever opportunities do the then pull a

to of ability of kind levers just our don't any different, see it's improve easy, but the this over the none So business [indiscernible] enhance are long-term. it's we in -- just and

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

Great, soon. Thank to thank everyone you, joining quarter. you, look forward we operator. talking in this for to And you. Thank you

today's conference This call. concludes

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