Murphy USA (MUSA) 3 Aug 192019 Q2 Earnings call transcript

Good morning. My name is Kelly, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Murphy USA Second Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the prepared remarks, there will be a question-and-answer session [Operator Instructions].

to of call Investor like Pikul, to now Director Senior Relations. would turn over the Christian I Please go ahead.

Thank you, today. us thanks for Kelly. Good morning, everyone, and joining

As some Financial that some then overview results, portion, Please mind Officer; Act and and statements open Donnie Smith, keep this provide Clyde, West, are the an during and of Vice Reform call from and usual, Controller. Andrew, President officer; will up After will Executive Chief in XXXX. Securities Private forward-looking Q&A the financial Q&A. to Executive comments of call, we'll Mindy President the and considered as the President Vice made defined with of Litigation comments me opening in including be the Chief Andrew Mindy

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

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

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

section reported to our non-GAAP reconcile Investors We part have provided website. schedules a measures results with GAAP our press of these found release, the be in the earnings on of as basis which can

that, over With Andrew. it I will turn to

us better perspective like for our highlight the investments strong $XX quarter the things several to I to the even execution thank driving quarter illustrate we and the everyone Thanks, today. EBITDA, earnings you to future. performance. morning, for underlying how solid up initiatives that that us are of and adjusted making terms are fundamentals of of but million key that view business long-term set had led delivering would Christian. second of Murphy Good joining from in an in an USA a

evidenced core the traffic are share merchandise the off gain making market paying First, business fuel in are and as customer costs. to we investments by growth and drive top-line with

any with long-term. and acquire effective cost. a near-term of for the these in as to Second, is customers investments investment, and an wallet are there share efficient way But

already store the Third, higher unit and growth further returns of raze-and-rebuild accretive growth. strong paving sustainable new-to-industry rate way improve these and for long-term earnings investments organic

up see, share Fourth, the committed own to to an based our capital repurchase seeing balanced million the strategy. frontload an in to expect our taking and we $XXX on and program. we And investment we're to results allocation are disciplined opportunity with shares remain

these USA continued Taken and differentiate Murphy together, investments position very for shareholder well returns.

what So margins solid the fuel realized our we gain higher up variances retail inventory QX, the contribution exact total falling XXXX. fuel opposite flat prior associated fuel, contribution witnessed even price year-over-year drive let's with as for fuel price versus thus Same-store gallons and Total to share. X.X% in of by with markets. through across prices. quarter. of the from June, the falling due year prices proposition sharp value customer contribution Aided with to the start in below April grew and end run low we market year-to-date traffic quarter continue fell to investments early The timing and deliver on was at we

flow line. with our benefits adding and will practices, to Our to bottom the each retail precision speed further are are pricing excellence quarter initiative and that we greater confident

so benefits off excellence remain large will retail gallons we sharpened price tough volumes We we continue pricing fall $X.XX are already initiative. at year-over-year see we showing store in were per in to cycled the lie quarter some our five tactics increase comps June's about XXXX. X% the margins from a through confident higher Yet While fourth the ahead highest July as years. the know

were Higher grew margin sales traffic as for trends. same-store X.X% merchandise strong X.X%. leading and same-store bucking and along with margin with merchandise sales were across growth categories. The sales strongest other industry dollars lotto supported share lottery subcategories merchandise the up X.X% quarter, X.X% demands in and category dollars contribution tobacco same-store up the was up our to Same-store increases and

our fully per Our to growing Rewards and initiatives Murphy core have tobacco more a with and is in ago. X merchandise both we MDR, fuel in as growth roughly pricing versus strong About results. categories year on initiatives X Drive are and our customer contributed category traffic members. in top purchasing X or members transactions resets million Building markets the which month of original our members enrolled in now are key the gallons is X.X pilot sustaining investment

at for a month number of size members a of three are we nearly packs Looking seeing for remarkable per These and other are increase $X. more, categories cigarettes, purchasing statistics nearly basket are reasons.

First, this just is a start.

MDR. only out have most We offer and basic rolled functionality of the

of consumer any bells targeted and the at or scale begun the turned even haven't We offers program. on whistles

not are potential from program, only far probably potential. defining as we the of we So the reaching from far equally the are

are with just and to take about up would If are the field. inning we we warming asked MDR, finished in what have say we

would loyal already Second, at a business. larger and cost. customers our loyal the changes we This new launch most attracting exhibiting your to have our wallet any are highly less are of behavior gaining of group members that share we customers you going first obviously frequent and to thought to program customers. sign by additive But subsidize from are the loyalty most a up is at

our are but the would compare we to seeing want to I similar. never station is a gas from quite loyal customers Amazon, behavior

Third, healthy. is the program

per attract than launch. the to now participants more four national month X.X million months continue We after

and are getting points the similar immediate and rates at burning they earning customers seek. satisfaction These

the attrition programs members first June XXXX compared XX% In fact, experienced of to other months. in the the XX% loyalty program who in of remained that within active three joined

believe of are these to upside significant them participants non-member believe customers more gaining still programs, it costs, accessing to them. gradually we customers share Many by as is engage than opportunity still value old million members. convert buying and existing Additionally, still non-member huge acquiring there convert acquiring members by customer X over has new stores. to are else's there someone but wallet we is participants Growing we our and and tobacco some efficient

$X.X we by about at fuel have to look business. approximately some investment let's $X.XXX points unit merchandise impacted margins million XX So our or by support costs margins or and cost incurred in per the gallon basis about million. MDR $X

healthy burn are will these through signs costs and best reaching members up, sync, one decrease. sign non-transactional the burn in program, a stage are the where from quickly As and the monthly of earn points we of

initiatives the enable efficiently more time deliver will to have that over us also We benefits well. as

the dispatch, appreciate that per but led effectiveness responsiveness. loyal day and management you to decrease to being tried earlier a great-looking incident price the and to dispatched low this has every the still capability keep new led and helps launched system year, more customers lower our While of service stores incidents MDR has cost better our in to to and have We calls the the called per and stores who maintenance stores sticky, has ensure service by best experience. and a in the need customer them

storms environmental with the due to do unplanned planned launch, and coupled the in XXXX. in were leading efforts prepare higher to MDR to than we incurred costs, with, we Water costs second to for cost also address normalize half the And and Spencer elevated these expect the higher related maintenance proactively uptime quarter. of costs

breakeven We good Outside saw a of toward we these increase and are in denominator, we progress transitory zero can decrease requirement cost, There three also cost sustain quarter. done; cost can temporarily initiatives drive which and our breakeven to we gallons can ways are margin in drive fuel have toward than increases, the doing. ongoing leadership planned; to position which were contribution, metrics zero. decrease which merchandise the higher the you

our basis. in fuel about a $X.XX strong gallon with prior-year very remain $X.XX the metrics quarter, are year, a gallon despite we on breakeven committed per the performance breakeven year-to-date full-year per prior quarter and driving versus fuel basis, mindedness quarter, on flat lower was we This prior gallons, to in however, higher

drive costs where the and performance yielded April rebuilds We better-than-expected term. bottom-line further When and our rebuild prevention productivity initiatives service from also more shrink loss optimization said reductions create year-to-date top- into stores. this larger are returned below back stores, from raise better driving to long since inflation, our X.X%, and and remains more to XX reflecting base robust. opportunity part cohort Investments new X,XXX opportunities is well that and highlight results. Year-to-date for new than has target stores Xst and planned the build up labor cost opened in format square-foot our network three

pricing the in of out on procedures performing new store have and a have building are seen Better XXXX we at level stores the been new tactics build key. These sharper store the opening, improvements gate class. higher

improved delivering XXXX about volumes than and Also is future showing for the higher our just around to sales. fuel and a stores class example, the XX% markets target I to the and merchandise Walmart For ability raise the are XXXX higher success are the rebuilds in focus fuel is to lift key responsible and network our this performance supercenter, mentioned. volumes, partly average, limiting currently the key in halo XX% versus build and XX%

larger in independent like returns our XXXX, within as recent we Similarly, see locations deck, prior growth also the material our to returns. better X,XXX square-foot at showcases format our express capital Looking shown improvements investor most from plan.

per Going returns period XX forward, built stores to at will we and higher XX the at rate be when higher when we footage compared square a post-spin to adding year.

quality the and stores format Over to a support for pipeline thereafter. the that stores will we have XXXX locations XX square-foot at growth and XX XX two built of in past years, X,XXX stores,

built company added retail footage our will square rate then higher. XX of XXXX locations activity higher you XX that raise-and-rebuilds, be our grow back per will target feet of our forecast we're locations, retail adding historically the and a be XXX,XXX the with and space. also performance on with XX XX,XXX space X,XXX will to of projected XXXX build XX we raze-and-rebuild markets, increasingly about stores At class If to returns when And you flow our think about we of the square-foot at based about cash began we using square and new year. be confident feet XXXX seen have square we

value been per strategy. X year. that record is initiatives to Historically, shares. providing our not returns, investments, our has but back getting of commitment our and overall our our of continuing require track least performance element our investor repurchase presentation, has generated around of our would This shares advance credit remains buying for own In our shares shareholder million balance value full allocation investors. latest to of proposition buybacks to core growth certainly in superior capital we a noted Last improvement of

Given Murphy of requirement of to our ability and that capital cash flow, we from the view, pursuant opted of Board have of projects through fund XXXX. $XXX to and potential, Directors up the current USA's future load operating capacity, view our a to future repurchase million approved share program July liquidity to that debt front-end

execute market period time flexibility This authorization. any will since and incremental approximately prior QX during the covenant and repurchases We to we shares $X quarter-end new receiving another the our $XX this of to compliance. recent available conditions million on most back have million over worth in cash, based where bought be

earnings facilitate flexibility our structure to program. provides noted release, in ample our As debt this

rates. loan notes are at a March and XXXX, original our $XXX million current premium Our reasonable in callable term given matures

communicating the and to stores, significant our reinforces been there key existing bottom have top to quarter potential both productivity line. messages This of investors, the we improve remain

a last, with where in win markets our have our rebuild to Second, and and the capital we to strategy. And inventory allocation disciplined we locations build economics attractive is growing will balanced remain there stores customers. with right in

five another point accomplish provides over we to next years. three aim what quarter of This to the proof

turn it review. for over a financial And Mindy will with to that, I

quarter prices Thanks, Andrew, attributable in for $X.X retail Revenue gallons morning, quarter flat the higher and versus retail is amortization and in $X.X and was to the earnings was gasoline taxes, $XXX.X by offset prices during in depreciation the The good billion lower revenue everyone. fuel $XX.X year billion sales. or second period. XXXX. Average merchandise $X.XX ago before XXXX. million interest, per $X.XX versus EBITDA higher million were versus gasoline gallon Adjusted

carrying rate period $XXX XX% the term supply wholesale of current the long-term June balance versus The other lower expenses, was operating year we loan report which on adjusted sheet. to quarter higher Adjusted leverage retail sheet was million, as in tax debt ratio, and $XX ago under figures for in of contribution, EBITDA by $XXX These the the lenders are higher fuel XXXX, lower offset balance the for addition, debt million partially Xx. second result product quarter of of the our ago and the XX, station contribution. effective Total quarter. year in than on we due million which the amortization liabilities in was to approximately and includes expected XX.X%

place periodic At is to a facility with million million borrowing-based XX. proximally facility undrawn. to limiting the us determination, and $XXX currently time, that remains in ABL Our June subject of present cap as $XXX

consisting to end and our for $XX totaled total total shares capital million to Cash were of million financial for $XX full June so will and million, the initiatives, strategic of over of budget to $XXX year net million million. cash Capital XX.X now second and were $XXX We the spend expect the the and between the XXXX. corporate outstanding a million about as general for equivalents about retail quarter. still growth year. we Andrew. turn for back EMV plan of program, million update approximately in in where XX concludes remaining million it which at million That $XXX $XXX execute maintenance, approximately common the resulting debt the including was expenditures I There of quarter $XX $XX

think I Operator, Mindy. you, the Thank for call now. up can we open Q&A

Instructions]. [Operator

James. question from from of Griffin Raymond the Your come first Bobby line

a comparable on Congrats good, sales quarter. strong

you of than some little color one-time first attach how transition gave is growth costs? by big the but much quarter? driven costs lesson how my you of the to year-over-year And station was So trends bit here numbers the any the some OpEx. and during prepaid of around remark, A can higher in us were some previous maybe these

maintenance that with some fewer the Sure, level to coverage led to numbers realized Maintenance Bobby, as but we the new noticeable system service and dispatch, having Raymond group et first and as the improvements of management cetera. about were reality levels, this talked well biggest success incident the a and implement and stores of terms we we that in of welcome store victim as environmental the of the James. all, two a it per service became is dispatches per cost lower improved almost our higher

And so that some drove higher cost there.

and period. with very we frankly really those been those et of our up dispenser have we've being those slow time. on drove higher fuel to launched, costs, expect couple normalize addition, and on In focused some to Those and to related metrics And maintenance issues. a do MDR with over got and proactive cetera, fronts, the we flow of just both

costs water As we to due storm water. the related cetera mentioned, also, environmental and et high usually pumps, for was

a alert implemented system also We there. new

we And a those on more well. lot productive so as are

of we to half so, next second expect those the well. And and year in normalize the year as normalize

around saw benefit costs also compensation. higher We some employee workmen's

ongoing Some will are probably higher. from edge higher an little claims were through of up that at be standpoint. accrual to these something several some to a years so there related bit from cost ago and that will now there, look coming That

were about, we the excited results. conscious for though, areas very initiatives where were had installed we What

how the in labor capability years cashiers, at lead had line. on now we'd cohort So store focus and many where that optimization increases been assistant and of than with new are seeing cohorts the the in leadership that for we helped our generate we area that expected seen the a determines of right as couple keep better a labor and results improvement cost Shrink in managers, row an successive that. area mix

the to second year. side but again Certainly normalize more that color a provides hope I have that a those than see we that number the have front. believe maintenance it of seen we numbers certainly we'll was in little liked half on higher the so on And, would bit

Drive I data, look you you most appreciate having what when period? follow-up, surprises you most guess there I with X-year or strong that X- understand it, of you at out the the I in but in over Andrew. couple the impact as upside it's think And growth guess is comp the Murphy seeing still a you just for look I categories. a clearly a that are early if nice Rewards sales

loyal mentioned Well, we mean our and that would we just gallons these found month hypothesis attracting accretive have are purchases But customer went up. tobacco that the in call, And our and already overall them, both that of rewarding higher additive other is what that we trip lot going going customers brand-new low business. as X loyal we the base immediately and we I make giving was about to wallet us customers. when per a in share more customers, had side and on were more an fuel extremely to size the more I this, and loyal is out into customers be that by to up seeing the we're basket extra a already lot getting

our to five in got way the we've say that's effective partners, than on that manufacturer, next have. or and then more of or kind the where significant signing see was sheer surprise at the you Certainly companies and other from public orders of will customers them. to store a higher that seeing the our allow any than number And higher number combined, member look, opportunity per that that and in four was than comps a we some and at of us we other store, numbers density and looked go magnitude per the going efficient if of the So and just etc., you up customers supplier participant back could members we're data first engaging of program others. look to

got further in those X of providers. high-marketing enrolled. X.X bought the from only are pretty that as And for fully a high-volume We're are we've but investment allows X fuel over ROI partner us, million that actively million still those retailer those pumped so of participants, have that that ourselves There's there in over differentiate and to engaged a is us never million million program, to another X right?

to into non-member the response. this even we we're on I engage inning, so get basic continue convert the have and we we've made I first this able not And participants functionality, full basically last, you And the know, comment, I mean, guess turned to continue opportunity to and and just to been in and members features them.

on we smaller when are done the so for to improved these targeted us. supplier And a investments lot partners we've basis and demonstrate that scale capability, start offers a scale, consumer at doing ourselves highly-accretive our marketing

And more then, and just of cost down. when we there the some add whistles, we get potential. is bells also believe other et And there and to more potential is the cetera,

our of by XX non-transactional to So a about gallon basis program of cent XX.X% we high Those year cost we so prior was basis was versus and expect burn the bps also XX unit the tobacco more it margin, fuel of just to points costs then MDR, XX another more points, standpoint. and be per level margin, at talked and unit the influenced higher you the a XX.X% mix time lottery. over efficient off, on points compare those bps that of and from XX if on are and on

to upside early program. at able the get days these be for the very cost, a lower but still we'll believe are So

from the from comes Mandeville question of next Jeffries. Christopher Your line

that as MDR, there Is vapor various just and well Really respect on ability pricing momentum obviously, to and jewel vendor does off going just break extent start and seeing that between we an initiatives the comps outside support what tobacco obviously. that maybe are the to as to down well? as plays you've strategic strong forward could with result the you to Andrew, here. got

Sure.

role. cigarette MDR On significant I is the where this played one believe subcategory, a

attracted right? the program, on rolled believe but in can we that that in so created earn picked we customers and retain fall And, May, tobacco burn had intense we in back allowed see expected in program believe, to and So on, where that would and that that I periods fuel. in again. programs of stickiness we have rolled then of I during June The April to loyalty loyalty significant us place more numbers we off those kind manufacturer where when the so especially those And, on back March. didn't, states more off up

bit promotional up On didn't programs didn't timing until are both we stores So the standpoint. and The unit as of on July sales margin margins, nationally in that year. of were price our Smokeless, was this much probably jewel And, different we on XXXX. we about and rollout excited that. little so help we increases the going were some jewel good had that at vapor, and there. a

there. from into represents still a that facing we get QX as year-over-year good QX standpoint stronger comp will so and certainly And be QX those comps

that would this certainly say as MDR leader you is the concentrate a a can't overall, over up our focused helped and have ability some precision and participate capabilities look have store gives investment we that I think Certainly that in. well, programs. our with leg pricing new certain a that We've front. But dollars, look been retailers on and category at in to I focus us when resets

at curious I'd response of what different if has having chain little been just hearing follow-up, then I just both I'm independent? from enjoy And it's the And if as could, a in-store you're and maybe light all at top competitive pump. you thus all on the the the about success in guess line far? my and

Yes.

are having response make to tactics the do and believe off they them pricing a little I certainly I think Certainly the competitive that means like. we So mean, significant everyday talk that. the is that side, of doing share, low about they decisions, programs, with some likely on, some I some of I to price get MDR. where through hesitant market the mean, when of and are I'm competitors to And are from to about gained imitate they programs certain think difficult always tobacco

off for you're will you and can't tobacco the pricing of on, So pricing program with certain you the you that pricing program competitive if down. up to volume is, you're much get penalize what kind for and levels side better the at associated going award pricing shift major a on up

think that's the there. most noticeable I So probably shift

Yes, was say years. taking over atrophied back begin ours back, and going traffic Awards. in of back and many to public similar ways And per last with stay price think the the those the read kind and fuel others, with on you with of releases going customer customers And a Drive have we I we're of you do you to couple we I to press get if now would Murphy situation, side, just gallons that generating that you're come or but can low to high-volume the XXX,XXX be to retailer, need higher. be volumes month a they're

X.Xx the industry That's average.

you're pricing about think up. strategy Xx industry different you probably a price getting the average, should and If

keeping customer ours we And traffic to certain was and on independent say we're that back getting getting get others largely so, going But originally their sharper, that I would I decisions as suspect and and face have it. make own. they it

next The line the from come question Stephens. Bienvenu from of Ben

to want particular. in ask I Mindy

Just you is associated I'd with always not your has best-in-class, strategy. in also but their as leadership? more hear under fuel What I love the Murphy USA complacency changed about think being typically guys to operations. of

make working that is know guys I uncovering, you even to opportunity there efficient are is. than that know So it hard are business more you I

of, kind to things and on that strategically guys working to it, extent that the love the so of talk operationally. the you some And are can you hear, about I'd

the question. appreciate attractive We positions one on product. out that and Ben, otherwise market in believe most market in a the we I of long being market that store there high-volume ratable Sure, have the an

our value, that positions been we those the do emphasis create our asset has relationships we So most have. do and we how leverage how on

doing our We're pull and point. our carrier mix how work we optimize around optimal supply

become reportedly our pricing continue we talked supply and outages We at about lot, the to we to also ratable sharper on and a level. capability and retail how store-by-store as avoid a our stores show do

based to on customers So we it's known are our after price. all,

good at to need very pricing be So we execution.

all in together as calibrating, opportunities of sequencing things the we're are we that's are business, and So property my really what those focused and assortment have that the really formed at, all that me looking team we initiatives prioritizing on. our

That's allocation the great. Mindy be And for repurchase a but front, beside share this and Andrew, both CapEx specifically spend. the capital the question on and could program

which that of stock you've mid-teens for buyback, Over $XXX allocated today's timeframe So prices approaching million committed pattern. know the percentage over, that buyback historical flows. consistent your you've pretty at you kind that's buyback a of the multi-year are with

free couple good going years? trajectory time for activate clearly on does so the outlook unit CapEx, really over with this there of ultimately your thoughts is returns the program now business. accelerated there's a remarks, but Could bullish the about signals the flow understandably might So why it have that? And reactivate sounds the be on the also like in you cash next to growth mentioned view accelerating. you your talk prepared And program? right the to a and like CapEx Or

Sure, Ben.

about multiple what the look, have the almost and has to posited led do XX% in shareholder on six you share would back of to and nine, bought since And track made, spoke comments of shareholder million CAGR last historical a in value And back the to you to of million we we've our for you the presentation know, our we sort improvement we pages allowed double-digit a our spin. said our of of driving really price time. and on sort over our it's on public question of of know, of we've kind One gone and EBITDA, investor record, shares, maintain the investor from an one $XXX conferences or third to look that that value $XXX growth.

shares draw multiple. X we that buyback of extra to could That's with grow doing would starts said million have and we we would out of $XXX we have that been to an the continue all in have would the both and need a something us million period earnings this the turn that to give all break We to we year million. do. probably confidence And probably $XXX to

do have what And well, are so doing going been We we say we're to back to sit going keep we're how doing. we say, and that?

improvements We're take XX downs, historically, more on fuel We're adding cycle assets is at opportunities more that than build going go those XX% go that. X,XXX we do out when a other and generated there's that productivity productivity of those there's if right right? ups run rate, believe and we $XX and be to a you're per with there's you going about and from stores going stores year pricing investment, to retailers year investments win. time, return and have our there rebuild the our But have to with existing hit where goes of to think and mean, that, I and million that. to we EBITDA that square-foot a

and that. doesn't right? be have coupled cash in right? can first pipeline cash, able along you've right a The liquidity plenty a shares million like on a seem So off our you initiatives to One we of flow, box, with that coupled million our those productivity a of we're big to coverage $XXX number, lines, reality trajectory operating do check sitting year now within and the is,

and our Ultimately, able if the value to driving not period. shareholder of to with over things were you all that. than those prices together continue is taken us to why so believe reward it a multiple, allow record but growth, going drag committed us out load we track to double-digit you And, front-end right? are to market year that buy So five be better and the going

a generate operating our the buy very only attractive We The free from CapEx to suggests we've flow to et up cover are from improvements, year, cash XX, with believe investing back CapEx, and cash which current it. to free a investment this called we we our going can not coupled own of to next the if shares Is think of. growth past, following the the think cetera, afford million, a machine a the in in but XX, that cash to even in remains right? is flow flow it in are proposition this plenty if our to our CapEx shares. the free XX the flow ramp you in to we standpoint, we'll just years, we cash able $XXX about as is timing, gets XX So do why do flow closer cash and instead it -- have of we future pipeline be near-term, business, NTAs matter

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

Patty tobacco Kanada ask to wanted just on X Bonnie for couple I pricing. Herzog. of It's questions, on a on

increased pushback migration the list Just away yourself on curious shelf on price you that And and allocations June evidence you of seeing to increased from cig seeing from finding category? the follow needing are migration? you if any Are are cig. smoker now February to adjust consumers

to which in few given the would because allocation really have bucking the frankly are competitors we're last And, quarters, products. our been shelf much our seeing changing other industry not we our we are performance stores, stores I share. not say from so to so in the trends, consumer taking our migration

the across that. share market and seeing units margins, certainly and sales not growing categories, we're we're as So

those recent increases jewel to products the flavors, to a in trends we were fall ones. and states more in seen noted don't think across some think markets haven't the when entire in different related really still I generally think attractive prior general. face particular we I continues we available. breaking from start states, late these you first to on place, of anything that I price as the are regulations are and the Certainly a out more we menthol nationally that category off rollout flavors versus the

market really on noteworthy that gains side share sort So the gotten. than that we've of nothing other

in tobacco getting to a about doing price $XXX and range. on and at how bit you what you're more you're help million share cash Can level fuel in And these the margin time share, gaining side do the EBITDA to in you building balancing next And of flow customers, priorities? you're optimization versus think market there? get of talk that terms about you same just the

been the with and excellence price now last pricing implement the it and within playbook teams store, build It's the Tran to precision to one I initiatives and markets. pricing. have every flat system, seeking it's and a product, the all Well. that see team, store in retail build have store by their Sure. insight fuel's months, have the on need in every every while, build put say to around down thing you a that's to we data analytics a another really up And capability begun thing and in day you and Mindy Lester to result. for place would the capabilities that the XX the in

margin demonstrate, customers do yes. wanted that couple the over we thing we were first trade-offs to little get being lost some sloppy the last quarters? made we volume of we can Absolutely back we a Right, emphasizing when margin. is Have those on

just So any margin seeing 'XX? precision now, things supply can ability going And continue allow have going half get to had a fourth which second I we 'XX environment do to and impacted as like by that right? is We contribution. Are store volume kind in were a in 'XX. the hurricane grow a to in we fuel I we we by quarter think July. in both us store we're of to or to had major have don't know,

quarter. We had we 'XX, saw had in the last come rise prices in fall the the together, we year. In and OPEC third crude off

just And so, any I to XX-month look this continue over rolling to over would everyone category period. urge

customers' of we emphasized rolling as on get way. Our regaining and that initiative. gain sharper responsible certainly are the first of in in focus wallet pricing to able half and is that year, to the and we've Murphy But volume margin be Drive our do both Awards out a especially, share

we've color is emphasizing been I retail strategy. our on can main some X refining because pricing Bonnie, areas additional really just there. excellence One provide around And

are, we of at who on a we network in prices time. so, tactics which same and bottom improved optimized our reaffirming execution the also our of basis So the doing market we've have is a then store-by-store

making sets date. competitors' to up our So are sure

us affect the here system a and management. how and that price Selectively features change tighter also implementing take then our initiate lastly, takes reducing to using automation for time it a within out the performance And store.

and our improve to tools in decision-making our So accountability. consistency

tight see been those areas, optimally are is really it's between improvements we to coordination is us X in site which all that think the those priced can results. showing and every day, every of ensure So I helping

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

quick have off Just from terms of Are your on of just seeing mine coming as the refinery those benefit arbitrage gallons uplift any were outage Both from colonial? any answered, the of you there price one. market? one I guys the energy in position Philadelphia

in over pipelines' saw lot following refinery that week very demand of up was positive weak in we displacing supply product there. turn outage, filling but since first that face as What really. Europe have that briefly imports Not then been gap a is

that and so, actually have to filling globally, have supplies been contract they those open And gap. been

been any there really So, business. on hasn't our impact significant

instructions] from Please the Your line of comes next question [Operator Mandeville go Jeffries. ahead. Christopher from

open. is line Your

XXXX? wait and for sure so Hey, that for top store of respect volume. more to share you thanks do we follow-ups. the as I'm and in how back for more With the a Should half? the approach the MDR half Or to I and to first we profile, understanding want it Andrew, market so balance line year. maybe for make clearly in margin just with back we half that need pursued the better expect the

a going know, what The going there's following. environment, significant most say the in, here going first say or the errors to one to and on of pretty half. that We're sort reduce Chris, So of mentioned I our anything, to kind number given is, side errors to we to volume would would and find ourselves one right? But that baseball erred to I on the probably pricing any get as that sharper much unforced our environment think is side use dwarf I analogies. margin, half. factors be if the going market goal back you of right? the So influence is error we're I'd you're will both volume that on will are The

member and cool behavior can behavior, customers the got changes data MDR you that we've month, really how time. sign up their where any analytics some over given The see

behaving group them. group You the before seeing every know, we're like new

month. So billion up X.X up a a X month, is, we're you know, signing signing we're still not million but

and maintain or So they as new same improve we customers type to of their expect the that. add and see existing exhibit we customers behaviors, behavior

mentioned around But challenges I some non-transactional off, some rollouts. given will fuel of as our be some comping other we lower programs mentioned, of merch from burned expect we'll that get know, think that they and of be other And the on a should things, we jewel cost basis we have as the supportive we well, and as the eventually be points as standpoint. timing the but you there

biggest and half we're will The know, the had So that. last biggest be, as looking precipitous the QX forward to of similar challenge year. to we're fall the second to you we unable where see if year, comp something off

comping have some without against market. difficult You'd a that the time help from

makes in you potentially release was all sense. that it follow-up that just the contemplate Right, mentioned might from press refinancing. Mindy, And a

interest ability you greater actually practice, relates rate especially the buyback just in is leeway then that any to covenants, to envision as on what where potential some a your And you can the just get there basis? current be adjust able go-forward receive? on that could So the notes, you senior do maybe would to be

up perhaps you picked on language one refinancing. about glad might think that that Yes, I'm we day the

at we notes carve for to X.X%, no $X.X we currently you we As callable lower on I which an our act most back that declines and of coupon expense. obviously, that, to do lengthen save that think rates, annual XX four premium and to maturities became of advantage X%. the of also guys if In this to that million of of reasons, would elect to a take even at to a basis couple years in still August Obviously, of a are year, original know XXX. XXXX requirement those but left, of have with premium X% interest

of So I kind that that in range that's the think in. we're

strong before restricting do start Both demand. and of Xx the very think one. than rate would ability the demand execution take high the over at any on we covenant, rate Both have would think leverage issuance, new would current we issuance to market above we've our allow to XXXX the covenant the that record issuance original advantage in current so we new six of has issuance. a structure settle that us would strong able share advantage of track of years current be And which also we expect So premium XXXX. take trade so our with to covenant we the X% we regard since these actually that reissuance, built that mirror the in to which ones And, have low repurchase. would receive I

So that would give us we enjoy. what additional freeboard above beyond and currently

to no this now closing turn remarks. questions back further call at will for time. are Clyde I there Andrew the And

you, Thank joining call. for everyone, the Great.

can you USA. the building Award about Murphy and pretty that enthusiastic Drive that Bye-bye. program, us the tell, future the you Thank capabilities at here Murphy again. we're see our we're we As and initiatives before

This concludes today's call. conference

may disconnect. now You