Murphy USA (MUSA) 31 Jan 192018 Q4 Earnings call transcript

Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Murphy USA Q4 2018 Earnings Conference Call. [Operator Instructions]. Christian Pikul, Senior Director of Investor Relations, you may begin your conference.

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

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

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

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

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

performance not allow. XXXX those discuss would you, did as that finish Q&A And in we're the annual fall last make Christian. a Good In I guidance. to comments had early year continue, accommodate noted morning, quarter meet sure trends the will for if below Thank time would my observing you, strong guidance. call. and we very our year. ample our trends and we the we EBITDA we all to continue, that Obviously, November did will to the as the current full call, time and keep thank have I joining brief guidance addressing much in

with as year, I range. fact, ended a the but of company's full the guidance about the $XXX takeaways you. I million, And plus about better. fourth the key to to continue XXXX a in result, few have If adjusted continued, In think EBITDA only we midpoint get annual for performance and quarter trends of our not

accounted value customers inside of in advantage cost took stores check. performance. financial position of we market growing million drove keeping market our our share traffic QX, First, strong X% by to stores, the year. per We volatility store average volumes when low-price we gallon and achieved for to and reinforced in surpass delivered took We at $X.XX contribution margins. nearly to our results and full And $XXX helping merchandise per these

by program network this across Murphy start competing rolled we're March. program transformative pilot are initiatives quarter at to raze-and-rebuild by long-term Rewards, step-level loyalty we of in positioning We and improvements completely the the in our the in through successfully competing for stores. beyond. compliance nationally We're we as excited all launched several and With our Second, to competitive win. out investments to have business early we're further making and we're underway, implementing the dispensers second XXXX and for our the in EMV launch Drive

with remain we capital. and our disciplined Third, patient

And when ended will share coming we repurchases flow, share free position, attractive committed cash which with give with to program. by activity, our remain growth the coupled around remain a increasingly free complemented year. in us repurchase of execute we flexibility We returns ample while cash cash flow. store repurchase the use New the from is to preferred raze-and-rebuild as strong year opportunistic

we formula technology results make term. incremental fourth been the quarter. past. in and the the more to We and as fuel business remains now quarter I fourth stores custom XX the from value has reopened in review as investments other strong initiatives in balance our is to conservative, new We network XXXX. long in briefly positioned quarter, will creation X,XXX stores competitive well growing fourth locations report Our but opened business sheet the entered our growth, XX raze-and-rebuild to generated by our over our results

on stores the the raze-and-rebuild results of metric, and additional tailwinds current I'd sharp and open the APSM the stores is ramp fuel stores shown volume than opened on year. store Fuel at X includes prices, or in to important This after about year. the to same-store up selloff the service half in service continue refined the metric, margins XXXX which our as second began were and out, X.X% of the all-in point when delivering sales throughout With in last table of product month the significant we surrounding as up average APSM, tactics basis and customers they in our new XXXX, store same-store impact quarter, new metric to fourth a raze-and-rebuild. see January help The stores. $X.XX an X.X%, the per release, and we of our to captures in class, to reentering gallon. build earnings positive the around stores XXXX month pricing starting like and months, basis the a better builds our locations volumes XX the are per drive our in respectively indicator XX period quality prior an per from the average showing

of a saw resulting visiting seeing business more benefits sales of Fourth same-store in Walmart year contributions completed EBITDA stores, in XXXX, quarter, meaningful over but X.X% offer both the the a the full largely in $XXX our for prepared of only level driving we competitive. for As second in strategic margins we're the our were year. tobacco million. expenses came markets phenomenal stores which incremental with up network in build quarter as in in a customers to drove locations up categories. off better we XXXX increase being and our the Store higher the rollout the in expenses able program and up for the where incurred from half we inside operating loyalty more X.X%, capping merchandise other X.X% as now X.X% With of growth customers year. were program our We initiatives, is merchandise and expenses the proactively also operating maintenance non-tobacco lift

expect XXXX maintenance as we However, savings we meaningful efforts. in continue transformation our

a we improved of fourth $X.XX Taken in gallon, breakeven XXXX. improvement quarter the quarter over gallon to per together, the our metric for fuel $X.XX per X-basis-point

full breakeven For per gallon, our XXXX. to $X.XX the XX-basis-point year, versus improved improvement a

team XXXX, turn competitiveness to all XX-basis-point can this breakeven. high launch our environment, national fees, a that, that prospects, initiatives we work with in work to card to And more this improvement XXXX. Mindy. a in which of increase towards company credit even in about excited game for and price This is of updating over I'll our it loyalty actively our several we very management to look company intend including and be on the in XXXX. year. the trend potential offsets progress in the our retail throughout on increase hard to pricing thank Importantly, team engaged X is our quest this and higher changers than want their The we means continue program, continued you in I our continue forward

Thank you, Andrew.

higher last inconveniently I'm voice. an $X.X billion typically And retail compares increases full to $X.X EBITDA Adjusted sound, billion, call. per And depreciation Adjusted Revenue with full EBITDA period. gasoline largely earnings year-ago which fourth is gallon in XXXX. $XX.X the million gasoline was $XXX.X was $X.XX the year. were XXXX. $XXX.X year, trying fourth for to this quarter full and fourth due interest slightly $X.XX year was were million respectively. higher billion XXXX above sales. higher versus margins I quarter during the to for versus not merchandise apologize taxes, prices, quarter the my Firstly, This prices gasoline than merchandise retail These in period year quarter gallon prices and $X.XX million full to $XX sold or from in EBITDA, versus lower and the XXXX. for was $XX.X year, volumes recover before dollars. million ago per amortization, illness, let year, versus in in higher and the adjusted higher higher margins and the was for $XXX.X but higher this to coincided for the me retail billion due merchandise offsetting This higher And $X.XX in and for year prior-year the EBITDA contribution higher period to Average attributable volumes addition were how fuel the volumes, contribution.

year ratio and 'XX share The due However, fourth debt the follows: value income $XXX quarter $XXX income below due the tax $XXX our These million of term million the notes XX, going the XXXX, of XXXX, we're million year. XX%. prior-year million. and the of expected that on term XX% Long-term of fourth the federal carrying full XX.X% the and due benefit sheet balance current adjusted tax $XXX recorded $XX the for last notes effective net report year, approximately X.XXx. Broken rate our of million million between an liabilities million quarter the our addition, on XXXX, per deferred balance for both vendors out XX% the figures as forward, to earnings consisting period. in loan $XXX carrying fourth of in tax and are loan. debt rate sheet. as on of And in amortization of million, under as for quarter full $XX carrying leverage to the we December on remaining we're Total was planning $XX value And results

shares $XXX is And remains approximately base year, million equivalents $XXX the net XX.X were of in end the common Cash of determination, time, that at borrowing end there of a the year. of And limiting end at cap million currently cash in debt periodic the facility us as $XXX.X approximately million resulting totaled the outstanding subject facility ABL to Our undrawn. at with quarter. million million. present the to $XXX of and the place

bringing approximately timing for $XXX million, initiatives. at CapEx. to That range various our million. the around Looking $XXX $XX of to guided corporate expense million, due expenditures expense total Capital approximately primarily below year-to-date to $XXX our are million quarter

call. financial address the program We guidance concludes section That the will the update. XXXX later capital our during in

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

growth. wrap industry our Mindy. I'd year the XXXX with to review with organic XXXX. locations. outlook representing of a new then our XX with for performance Starting discuss call the up our stores, guidance metrics against and to ended like X,XXX We quick Thanks,

Additionally, locations fuel low offer square-foot grades replacing the high-performing adding XX stores razed-and-rebuild we while products. with ability the and in a store to the X,XXX dispensers kiosk for year and

towards million the to guided Looking at end fuel gallons X.XX per within contribution store range billion the up -- our closer all-in $XXX guided and $X.XXX at the contribution. Annual of per to of billion XXX,XXX Total margins gallons billion $X.XXX high-end fuel On for the gallon upper million for $X.XX fell $XXX guided gallon, $XXX and million. respectively. of year gallons of X.X year contribution of range per month XXX,XXX the per volumes XXX,XXX dollars a range per ended and cents per X.X store month, gallon. to our store basis, gallons to of to also were

And $XXX billion components, cards the to above $XXX increase, Looking perspective, million. excluding the were range increase. guidance $XXX to X.X% our X% a billion Merchandise basis million, at midpoint million. of range $XXX space of just of guided billion. SG&A a million was was corporate guided to million $X.XXX at fuel $XXX above to $X.X range the our low a at From merchandise million guided per breakeven cost of margin midpoint to credit end $X.XX of our our totaled of other flat on in held sales OpEx, right expense site range contribution $XXX of retail of of just

the should to resulted all effective full million. year, guided million of combined for in below $XXX rate of tax approximate basis And of XX% just EBITDA as $XXX on full mentioned. of $XXX Our adjusted million, year in range XX% go-forward midpoint the came at our these Mindy which a

range provide that As we improve. of all-in changes as insight intentionally can restructured business the investors volatile, resided an $X.XX look most to year that can our around guidance be spin the $X.XX on per over on metrics we but margins, results impact an that to fuel further providing per outside longer within while margins, notable we gallon. the create basis, If And a forward-looking much XXXX, influence that we're narrow wins operating to shareholder we management on even look wider calendar variability that is, range any averaging monthly and the since point guidance broke clear a meaningful wider into team and may have about in The which future a period. sustainable basis, arguably time $X.XXX of no per margin $X.XX gallon gallon itself to we see longer we down it ranges, Perhaps value. a if encourage of still. and a and our have long-term range to view see we to term at fall $X.XX likely is to ability will even does would these quarterly not

XXXX we which within market new new stores of in quarter will less guidance of very remain calendar forward, periods, format within XX will XX expect raze-and-rebuilds the for will investors XXXX. we pace an for and per of performing characterized existing next These the as to with said, high low witnessed market be review to range to of and fuel how margins the opportunities higher month believe to guidance we contribution and the direction timing to the with long-term understanding guidance to mitigate we enhancement average address new grow high a store growth, performance should periods saw margins. the repackaged investor volatile very store extent, Starting that of a years, network we optimization around of our and build fuel construction opportunity as choose render anxiety organic Variances will to this around of not to always XXXX. While to metrics in relative perspective, change being for assets, compete let's coincide provide both help the no a value. we our and in encouraging will fourth conveniently retail and and both and short-term better our a also margin do will margins, the expect term to some range And our by year. projects, that undertake. periods quarter going the such, the XX-month of we low investors margin We longer level own their With how a of From view fuel outlook construction we based both encourage on while equilibrium our business stores. evaluate several maintain raze-and-rebuild simply industry shareholder end-of-life store volumes. lesser a attributable consisting of number first

continue store is with per so. XXX,XXX to of per mentioned our a absent period prolonged of XXXX we'll I viable expect prices, do range volumes flat it slightly As drive we to store traffic to in gallons strategy, economically falling lower to month. XXX,XXX the previously, guided when Despite

For merchandise million the of to the guiding of other breakeven $XXX metric, a range components fuel to we're million. contribution $XXX margin

cards Our expenses, credit unchanged. target excluding for store operating per remains

to X% a forecast and inflation increase beat flat in to expect We XXXX.

is to approximate our technologies maintain in $XXX capabilities continue stores to key invest $XXX million For with to long the initiatives corporate strategic and to over support provide appropriate customers. million to office our best as our expected to we competitiveness with our engage the tools win home and costs, and and term both SG&A

raze-and-rebuilds and raze-and-rebuild retail and to growth, about organic in capital of new square locations. million $XXX between allocating we stores XXXX, We're feet in XX of XX industry and XX spend new $XXX square increase For to million new representing with XXXX. feet XX,XXX million versus for year. XX,XXX space This represents XX this roughly XX to allocation, $XXX to expect XX stores

be cost improved building new contribution to represent the due a and X,XXX the square stores footage stores cost. selling which higher stores square-foot incremental with industry to will larger, comes the merchandise majority of push higher we're that or our for margin currently, Although fewer to higher economics

million to a EMV $XX upgrades, dispensers another million million secure to of level also of including representative corporate to This the further stores includes break generate the a fraudulent initiatives, reference on card capital, This expect considering XXXX. $XX million give systems will our ongoing in we margin, this make we scenarios, frame a upgrades upgrades running. and deferred major margin about a EBITDA. charge when backs statement. at the investments we're basis. And the spend replace dispenser At and fuel avoid that allocated We Last, fixed per standpoint, the midpoint for Strictly $X.XX from IT normally ranges roughly $XX is maintenance usual companies. spend including $XXX earmarking and expenditures from our to about dispenser amount credit compliance. business infrastructure new for million $XX we've following you on of believe projects various we of of some technical an above and would which all-in of network keep gallon of consist adjusted annual from modeling

we guiding invest expect The Importantly, improving XXXX. impacts in $X.XX improvement of continuous a ongoing up benefits to we're the network. environment is, national EBITDA. nor loyalty to improvement you the $X.XX in better scenario million we initiatives saw guided provided to goals. a not to in retail which win our point putting our realize in to is consistently $XXX time, the us any guiding per performance, This we of our are we're have for we outcome of commitment Equally These savings underway program, providing will environment include see internally XXXX. major margin not ranges measure show position in using against we the metrics but important, as areas margin adjusted margin over rollout single our our the include initiatives expected not in different of mathematical cost simply do the the fuel guidance. we a performance margins gallon by like company is yardstick obviously company above financial It strategic which from and around pricing

While with already these expense them, into guidance. initiatives do have and are above the associated both largely baked those expected capital costs

other result the range in with of of XXXX. initiatives of less expect strategic a on rollout As one-time impact, XXXX of bulk these pleased forward. And cost up, wrap excited about a we can call move we're for second open timing we full potential half Murphy the initiatives business XXXX. to outcomes, XXXX XXXX we're the in USA's up variables the very benefits Q&A. To wide operator, the made And with and that the very to to with realized expected the progress see we to continue the in

Instructions]. [Operator

Your first with Mandeville question comes Jefferies. from Chris

I This per wondering is looks you expenses like they [ph] little X.X%, talked is but year Blake was store, up the XQ about a for the X.X%. your only about higher, Chris. on operating it for are

You talked about the higher maintenance.

Now growth guiding to you're X%. flat of

to able wondering cause was I away expenses part flat to range? maintenance? be about you So you can initiatives less Any what that lower hit as going would talk of to maybe that such or

QX, started initiatives. rollout stores the area new of Rewards, Drive the also prepared proactively cetera. year we hadn't transformation up the et cost for the year been national our all work. of step frankly, those got and And in and caught lot maintenance full of maintenance represented that So tickets, And at of open one done on that the the with for work business a Murphy in we leadership

of what item. of kind so that accumulation the And is see you expense

a for and besides transformation that clear for disciplined maintenance of vendors our initiative One to rates, benefits new work XXXX vendors, backlog break-fix new process a of of lot completed of in more the projects work. a work having vendor the standards is

net basis. costs actually relative the for a store XXXX. and a so per And quarter, on expect to maintenance Labor benefit we in had savings the we other actually

our of to And expect so inflations as more to to since we've be I continued XXXX say able spin, would continue that than beating in the trend well. we and do

loss we provision Beyond related have savings XXXX, shrink, maintenance we LP. in the initiatives to expect

our uniform but We money, labor initiatives other saving that's program have have well. uniform store new new to a and also a providing we as associates branded

of track area. that have they but line at our we talked beating just we've investors spin. and on in to we you track trend our improvement will inflation results look simply to at since done before, look would as full that the record of record about continuous as quarter not just to still rather sight one maintenance year and So our And higher this continue costs, we've believe I encourage guidance of

your All maybe impacts XXXX right. you And then you IMO just expense? can from talk about just lastly, business and on generally maybe for maybe expect demand regulation,

Yes.

investors light increase that XXXX with year as in believe others, IMO overall. of raise the talked crude on compliance, will diesel that So we price of January crudes, to and is with full pressure which we've it about et prices, put of cetera, implementation going next will the sweet

company well. price in seen You've increase as gasoline

when I We think we would $X.XX, key we XXXX. first towards of saw of level levels that saw middle start levels they gallon and from, you $X.XX, going $X.XX, to saw had right? $X.XX price it are year September August from in last in at per start of about of increase and lower at the this from that start end we or the think the higher will increase in prices, a the talking is started gallon question XXXX gasoline prices we the if diesel $X.XX per what

does so will mean on our of look that probably and getting XXXX, if seeing we do that late and back have you think curve into for start And and price to other to if early about -- business? metrics, line all environment QX look you right. Well, what you higher QX, forward sight a is

that will it's per have that. You will the implementing some based in reduce help fees, because card see actually us gallon on in where cent buying, higher price of you're place initiatives XXXX we credit

card in other that improvement One metric our as the XXXX saw fuel increase we our we focusing credit than through offset breakeven things by on efforts. the of more continuous

I on of a become the QX in where customers less of the think as more trends the locations And retail that lower to sensitive. about to go higher price in that we margin in where other with thing some higher associated of environment stores in prices outlets margin. the type leader rural environment. price we still sensitive we're have started the on take able low-price dynamics see The our more absolute is price and majority And competitive we share with are more price customers to become

nicely So to relative QX I environment, higher gain rootless raise for sets think try winning through cost like low-price QX all players of or the higher basis, that us type and The on offset everybody. on prices a firms rising those in to continuous up a share that improvement focus costs look price right? will that What look would It like? environment. value

and I look fuel the of you analogous business. relative including we'll actually PS&W higher January And and anticipating in will and implemented metrics, to see X, when environment price what to that be see so does go margin do is on And to we'll prices. for and would modeling see right it the our now history rising that it back other impact what happens, but we're that encourage at all

Your Bonnie next Wells from comes with Fargo. Herzog question

I future, given to have your stores right building returning you're seems buybacks. shareholders as not fewer your It on like new question a much planning new cash strategy. in but necessarily now, on the

cash pretty healthy. you've you As mentioned, got balance the

of is? that, in and all? maybe flow, changed priorities what So the are help the then priorities cash for understand goal at And free context what how your long-term us these

around of you was we're I articulated some overly certainly to the prices, year and period just maybe prior debt. going we've a And in there kind was repurchases. encourage share And missed over a because had out. haven't. quarter, anticipate. say, certainly everyone we And was this. We're of on it really conservative But how didn't price would we continue calls market back to where trigger there last we just look in Certainly, the Bonnie, massive where that. be to can correction something they opportunistic

first of going the like million prior that in in doing of half be might $XXX we fact met acquiring shares calls the be think XXXX market that year, opportunistic we that quarter-to-quarter, we're the so. more lumpy than expectations I about from in suggested and to it

build try The time target stores and will year expect no to for capital we and away of years the as offset build up higher the that. target we our place been modulate in target we that And could our raze-and-rebuilds stores larger bit then calls. the we formats permitting this with see the a the number stores, referenced get built stores of allocation. be to around that Part markets. of on our little that absolutely from that, there's you of majority around and So to of discussions well year next lower those of in in be any bank may it associated but philosophy up of as the slightly change move Walmart of number lower change in as future accommodate square-foot amount Takes a the we X,XXX with capital. portfolio everything a in a land handful other of stores, markets number

allocation buying the in and do shares little time quarter, will think timing more method not strategy. at any you less to one for between right quarter, cash And one during way may right get to shareholders, bit shift year. do timing network the think quarter overall at to one we a I see been very, that I little improvements very And a been across may please, the opportunistic returning but to know, get any pretty it consistent in good we've we a period market. and of they back not continue you'll so balanced and primary major our capital shareholders. in distributions this look We've as is And saying we to growth

out that, going And terms Okay. think then opened that priorities That made, just looking is for of necessarily something if guys acquisitions? but is cash doing? you makes has what in about you're and in context acquire, don't that I to of sense. the to

Yes.

get on that So a be another those Certainly, have I with new on allow the up hard there's and apply growth would those that think our good multiple, to a towards higher the kind to the But the will organic that business, efforts improvement our award out in that stated time in priorities at we've also to market cetera. continuing rolling recognize us capabilities today, of et we're and made there's make capabilities if given more you working We point would state number justify less and of been to acquisitions have to a build would synergies control business XXXX. dilutive. you stores place the been win to high accretive we've of of multiple customers. to some would that which the premiums, and in some focus believe ones acquisitions able

So capabilities to think XXXX. that strong not now, M&A, stores right that's significant that. way allow add be a and improving building existing the else's to business creating in We're capabilities focused about or value our certainly around but XXXX future for plans build someone of certainly our productivity you the could looking from upside to to

looking quick than It for. expected, in guess, the fuel on PS&W maybe a just fair was lower I what I contribution. RINs, my the was then and quarter, but final question I is negative And your which amount,

negative and the was thinking us? but you you it the you history could you contribution, walk of where back not fuel guys, And I'm had margins for context back looking outsize of So that quarter certainly then. retail as negative to maybe think in through know, I really about for the fourth 'XX

on help what just went So understand us there.

here's the so thing. Bonnie,

aligning most fourth you you cetera. updates remarkably history you for had have back the what drop, $X.XX said have done analogous price well, would about your quarter did, looks going at gone time in and our you We XXXX like period said peers and And similar. we're you said, through for what exactly what is the got you you're performance. QX If et

If you in for you performance look back have period, the seen would following. that

what basis supply volume gallon You per would basis, about net X.X% would seen average have per you'd at and margins to wholesale. a on we retail And the in $X.XX about on APSM have you'd number growth about our store about And your a offset quarter, a instead gone a we a merchandise an been margin. seen little $X.XX growth have $X.XX hit been we have this product And have X.X% was, maintenance exact would in people the going seen of month lot all an high-five little through the volume done bit talking offset been contribution about have closer bit stores. of estimate SG&A. have would we've higher while we discussing from some actual, would by having the to miss,

does PS&W to we've so best calls different through think enough in the of the think business, them around taking enough prior of our estimate falloff might provided I share, and gone and towards our Now prices, I lay the and there's parts encourage, on now that color offsets out your this your you falling, history, would think of quarters. as analogous conditions is what guide we've be And detail you strategy similar consistent around better in sharp And that what way market that? is. quarters the very many in remarkably in the structure actual how price a painstaking it a to of just the I significantly our investors quarter period to helping certainly

Ben question from next Stephens. Your comes Bienvenu with

quite which I your ask merchandise for sales bit to improvement what's I guidance then tobacco driving is And to to than seen year year-to-date, wanted predicated that on next ask trends? in were extent about a tobacco from results continued we've continued contribution about improvement? what strong better quarter, of the want maybe certainly? the

traffic the One, certainly of that I'll environment. things. in tell you a helps couple increased

part Second, benefit vapor other to well. we the through on And those that to products, in be sales return with including operating tobacco volumes and the programs the -- the products, other strong. retailers we're sort we've were the higher continues us manufacturers versus those to in frankly, the as manufacturers programs implementation some under because that dual continue of later

If programs. expect to some to about traffic, you XXXX, strong have continue we strong we think continue to have

value adult significant We the additionally, a the any from products for of continue consumers of to material Murphy increase unique Murphy very believe see don't we FDA way to is Drive term, any impact regulations. Rewards near and the in also USA for

traffic-building So XXXX continue Murphy Rewards we'll programs, other from execute we in and Drive to that see against good activity. to as continue do performance the believe category we that

how and investments Is might earmarked And spend Okay. next relates this with of two SG&A out? are as in IT your build for synonymous then remarks, but that Murphy Rewards those I in have is year, mutually to guidance much for loyalty it the the exclusive? missed Drive mentioned prepared program your that release? you've that press Or

No.

one-time capabilities $X cases also there in with cost. Murphy million associated of some that initiatives, of adding million those program the resources of some efforts. other about So and Drive the associated human is And strategic some about represents to where is and with we're $X the increase

Okay. guide to year greedy stores Great. us this I quick absolute of several provide hate around to that I And could, versus I with mix the rebuild your ask given over the then, if the detailed your because versus should years spend wonder change want moderate? see Mindy. just Andrew's CapEx necessarily. for focus but returns the expect in as background, and to context and be dollar you last comments question in to of CapEx I bigger question next and raze-and-rebuild, just managing

That's from question seen. levels out have come that to would departure a there, great not we CapEx expect I the and

will are EMV likely our think have extended major go we're we some lower that cost assuming to I under for dispensers compliance, maintenance shift going an those warranty. because

dispensers be dispenser So replaced awards. that under will replacements, we all. of have And we have will the less first then

for a activities. have to of So NTIs, then an that extended we bake our new maintenance reloading in we Andrew won't budget. reduction, part see we're growth, will our for And still raze-and-rebuild that said pipeline our we slight as

say, drift would years. when future we our $XXX So I million CapEx below see certainly in

reasonable million $XXX to million, $XXX would expect. somewhere think be I a range

from with next question Your comes Morgan. Casella JP Carla

breaking You How card. going expenses the out about credit have your credit card excluding the been should think forward? we

one prices. revenue. to certainly think the -- one it's way with fluctuates about about revenue And call sorry, know, I of is, X.X% to you way it,

number. to that's way think simplest about probably so that And the

and products total not gas? petroleum revenue, just As a the or -- merchandise it includes the

Yes. Yes.

chain? And you supply weather the recently cold pipeline, the from this anything the we've does whether, just are this craziness seeing impacts within that delivery, Okay. impact then any had,

markets manner. No. think we significant and so in year I the year, fact, A mean, versus last January hasn't. about snow forth. our in markets last this we winter storms southern if more saw driver really the lot in And a more It much that year January traffic impacted disrupted that

And polar so markets experiencing vortex. most some chain that not supply really hard And stores did so, got disruptions of by we've temperatures the kind of same while markets, we many in fewer our this we're hit in cold we year. last have

if down year-over-year fact, lower want year, we storms, X% were year, we rising starting and you this In we to-date where January at January. we're to major year were up and This January, the prices XX% last about at last are look versus last year-over-year. margins

storm-related And by having rolling from year, to so we're not cetera, only year. enter from impacts halo of take we we're kind last effect customer offsetting stronger the et and January's traffic shares in to December continuing the market the

we the performance year-over-year So supply no chains year. disruptions, no as start and stronger certainly customer disruptions

through of being merchandise cost. any as Have on the food XXXX? to the that side, on we And year? a you then we're logistics are go and of And from Okay. there passed seeing changes product had hearing you any you the increasing consumer companies lot into

would higher see to than environments. we returned that We price surcharges which Look, actually are contract, we our that. to high so renegotiated lower, proactively prices, be when prior don't in No. really when price fuel we other transportation levels advantaged relative were

prices increases see it industry, is the of gross we to some transportation parts of but packaged same to to of So unit for of the decline dollars, is grow limited in of manufacturers as due the manage declining price the kind that other beverages broader in and margin to as due example, actually that, some we'll I fact continue costs, see products effect demand pass-through. but for the on guess, those with higher

Your Royall JP with Morgan. next question comes from John

see to to levels, tracked all the look wanted any compression color of there Just forward our you some quarter, helpful rising think January? had would XQ? prices on other but your would suggest in margin fuel terms if you have be You which in as XQ I crude any color

Yes.

we at coming the increase that an month-to-date, margins out more started for fall year. stronger for seen earlier environment a and started December we've lower we environment, level to in So and a increase, little stronger falling steady a another we generally increase of but saw saw month and off, with it's the last price environment

et fuel QX, for many quarter months so due, For certain why just supply-demand February because don't what guidance low a for and the know between it's business, cetera. QX, where IMO of out factors crude, geopolitical, we there's kind remain margin do. crystal going have crudes, I come. we're they environments the to of take went demand March, there's volatile. on This two sulfur XXXX QX and the is the the advantage we those of can We next And when in, ball

just the a maybe different allocation capital question from then wanted approach And Okay. angle. to

think deploy? have it on, have available you would You run targeted that I much try level a business through how to the guys cash help of you us generally think

have a zero really of we cash. balances ABL, we long transit. as really operate of certain We of level could capacity on But as under a that don't amount have target in We cash number far our always as a basis -- goes. have cash as

have no, have have. don't So cash to we target designated a of we that

from Raymond comes Ben question next with Brownlow James. Your

On points you maybe any points or of there? to are same-store program, around data the you the I on you this was loyalty could the give just out, updates just data give want success hoping that Can sales may but and not trends program? around stores, -- your pilot some

Yes.

loyal increasing customers seeing, that things been just So we've same most our gallons are I trips, hear per trips. increasing the

side, program as the where well larger as Texas well, On earn can spend higher We're running as the a unique you we're seeing tobacco there. in baskets. points

standpoint. And so from encouraging that that's really

things measure basis. actually loyalty good other points very on or all them their find using a people transactionally ratable of up they're program the of accumulating ratable that's And basis, our a One those our they're which very using on a we points encouraging. is

for number through The X of to million. go products have on interact is continues members well of lot continues information that verification qualified number of that with so them become certain the up. age-restricted go can actually north give registered we So customers engagement to a up. the us age we've around program. got fully a of And and purposes, high The folks level more with number gone

roll national rollout potential just excited our March. really early completed expect in is to as plan we're be the QX. to about so And And nationally. we nationally we to out in out clear, rolling have this that And begin

store asking, market, thrilled not in the we're media XX% not assets on and programs the managers. these as We're of are millions advertising, millions to point-of-sale leveraging Orlando and managers, So and our our that. we're anything is there talked store to asset, spending they out social we national about timing, our others have how about are members launch, X,XXX-something the is our with millions it, which have greatest conference doing and their signed not based the them set if store Over roll managers associates. to store and greatest on had digital our always to customers delaying think best interaction clear stage about get we leadership if with I've our just already of and up. being are up when one it going coming the sign And you

comes Company. & question Damian from Gabelli next Your Witkowski with

building the stores. larger stores? is Are new the or now larger all, you'll on -- external question from a forward had that just be going we I on

format. building. That's our It's modular a primary

the front third large most and get now has XX,XX got if that able of versus as well. would does by building, from on more is are still X,XXX-square-foot way, think entrance. party helps. a we raze-and-rebuilds of if our can't It on we're a the store, It able beverage the that the that to on There prepared, bigger it's about X,XXX fountain it that go locations we X,XXX-square-foot supercenter about hopefully, one still square-foot But interior does this of our of also it's the do beer major cave. you a where modular So loft the be store. stock And smaller a coffee, X,XXX in may and to be sort X,XXX where food, build square-foot it program bathrooms a know to the stores did today, store additions. exterior have we are have a a

there, for then stores ones? real twice I the buy you just in size are estate a are or of economics, is And spending much terms against looking know, already And other of change the to leasing? the Yes. average on you there you the how now, are still

out available that's is really million leasing about only is stores X,XXX-square-foot The million. XX-XX The million. a just there. function Yes. and $X.X of about $X.X X,XXX-square-foot more, a million, cost what stores little roughly $X.X $X over

the so more that margin cost. and incremental, from merchandise selling covers space than And that

to You more cost that land much do don't to able need it. significantly either. be The labor aren't different

merchandising, are more the the have you terms running to on hiring from then Or company? of, in doing -- stores? to get bigger expertise sort more and outside of the -- just obviously, this within a terms lot you we of in lot And -- from are

stores larger in I X,XXX-square-foot is X,XXX-square-foot we crossed line a stuff and of number into these portfolio. in in food, we've selling given our prepared around selling which mean, that we're the getting No, we're the that stuff consistent stores stores, got existing with the haven't

answer The we're even right go building stores which all So eye our today. commissary probably doing in I prepared did think if different and set would you changing of bigger that? capabilities food capability. the you've to able be the a path, this It's not key getting a in model in thing got we into and down bulls your a capabilities. And are bring is no, would But business be is, that we by that. kitchen and of is, we

if what's to to go comfort And then remind said need target? those debt-to-EBITDA lastly, me when Have in you you -- you your level get if be?

Our have X.Xx original leverage. bonds

share Xx bonds repurchases. have on newer in Our terms of leverage restriction the

can And comfortably operate the within levels. we so those business

time. There at are this further no questions

the to last attended, really point more sharing excited allow any want focus conferences of investor meetings believe XXXX. margins come long-term short-term as it anyone. long-term. as hope on you much. up more didn't look the Look, this attended to to forward roll emphasis as We I do have shared our Thank very us I'd the behind business. one we've the the initiatives at this really the the calls. business, I long-term focus guidance. this. This surprise around really And of about you have a conferences we've us of about potential in the of to call is two in the out anxiety with and this and look we're the the we around Right. any things will like well. wrap shared to the on And less We've

today's concludes you. Thank This call. conference

disconnect. may now You