Murphy USA (MUSA) 3 Nov 192019 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Murphy USA third-quarter earnings call. [Operator instructions] I would now like to turn the call over to your speaker today, Senior Director of Investor Relations Christian Pikul. Please go ahead, sir.

Great, thank you. Good morning, everyone. today. us joining for Thanks With me, Mr. usual, are as Andrew Executive Officer; Vice and Chief and Mindy West, Executive Officer; President Controller. Smith, President Clyde, Vice President Donnie and and Chief Financial Mindy some will financial After comments coming from results. provide overview of opening an the Andrew, close discussion on with we'll and our Q&A. little call the up to a will guidance, then, Andrew open

Securities be keep Litigation in including the call, in during made this defined XXXX. of mind Please Act as portion, Reform that considered will comments the statements some Private of the forward-looking Q&A

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

other of see factors, please discussion USA the further forms risk SEC X-K, recent filings. Murphy For and latest XX-K, XX-Q,

update any to takes statements. forward-looking USA duty no Murphy or revise publicly

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

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

I'll that, it With Andrew. over turn to

view, rewarding QX as high-performing new Thanks, of since thank improvements, growth, morning our to my everyone strategically. store balanced Christian. goal value its joining today. we spin, Murphy of financially delivered, was and in our toward allocation. Good best us XXXX demonstrated continued quarter term you longer shareholder productivity through capital USA for and and one progress fulfilling maximizing both and

continue making underpinned investments our hard fourth Strategically, business success and with USA that of we fired strength October long-term. position the build capabilities suggest on our the company adjusted Murphy teams have for all quarter. $XXX will and of are results work by to been million, results the over Financially, cylinders in the the the third-quarter EBITDA into

same-store year-over-year to evident as comps in store once again over impact the generate strong While an will time, grew saw we the on merchandise. average fuel X.X% and and representing these benefits of straight same-store QX their quarter, on X.X% third capability-building per fifth volumes continue quarter basis a in basis, investments fuel was very month growth. year-over-year

contribution fuel our as successfully $XXX.X pricing volume excellence and we growth both achieved increase XX% margin million, showed to unit Total retail a dollars through tactics.

fourth in the fall a gallon off difficult be quarter perspective the see will year, to October While roughly last margins. good we a QX larger at per volume comp improvements continue in year-over-year given $X.XX from

$XXX both as Merchandise as total over tobacco dollars with strength improvement just nontobacco contribution just in category. and X.X% were million, impressive to grew

share which increases We in up with higher continue and to take unit all were margin sales both dollars, respectively. XX.X% driving and tobacco XX.X% categories in volumes

nontobacco X.X% to rewards Murphy Total members reaching million in continues with certain enrolled who and quarter, another programs. strength X.X margin dollars enrollment categories were X with snacks, of drive beers. million access on merchandise, value tobacco the at could still end general in third up participants decline, the

more frequent program, early we including more purchased, merchandise of said to trips, prior we sales. calls, with continue As and behavior customers higher are engage gallons and seeing signs the changes, in

increase our in a As significantly on we the second in increase a last projected call, normal the quarter from basis per-store X.X% expenses more moderated saw X.X% quarter. operating to this

cost We frequent per less maintenance continue and on resulting various dispatches to see in benefits processes and average. initiatives from dispatch lower a

in to bringing and five X,XXX the the $X.XX per offset goal. operating a the fuel partially record stores. the quarter, our gallon, milestone added significant total breakeven annual to network improved higher As merchandise of volumes metric on XX stores expenses, basis way to quarter We and higher points on fuel breakeven our and by seven to result we zero lowest total new contribution, our third a higher

raze-and-rebuild for to prior down stores X,XXX year-end. square-foot seven that have to currently stores will return We

If the will higher and in release, figures you are XXXX, stores built per sales, service stores XXXX in of as newer the on gallons figures, are store-month to XXXX December the include see versus meaning that accretive of XXst, at press look our and they average you earnings the class which Page averages. all same-store merchandise X network of providing

reflects bulk positive X,XXX-foot our represent benefits improving of of from going This selection a our will indicator strength capabilities is new the which the of our and site format stores early the forward.

ability than confident more value. potential drive are we profitability team, management our improve to and ever a shareholder As of and

the we flex we the these result, the a the the capabilities sheet benefits for to and shares. up reducing future. our building in the on quarter, will million this As continued roughly new have our by To ourselves balance see debt are of we share facilitate we as in highly third million invest X.X repurchase investments, successful restructuring. stepped activity, Mindy on share count $XXX more deploying

of part the can strengthened on you in income As and the balance statement see, quarter. sheet, business every the

power even from was more it the some didn't ability quarter shock, earnings an What event hurricane result generation cash highlighting our fulfilling of a like and externality the or made oil that or business.

quarterly set This and well good review. to up XXXX finish I'll in provide guidance our Mindy an us through on shape, takes us quarter after financial XXXX the update also

Mindy. it with over And turn that, will I to

XXXX. slight $X.XX Average by lower the and billion third offset the $X.X higher billion versus gallons quarter and morning, quarter in partially sales. merchandise during is everyone. gasoline decline gasoline $X.X higher per prices retail Andrew, The period. fuel year-ago for attributable sold prices, Thank was revenue $X.XX retail the you, good gallon Revenue in a versus to were

depreciation and expenses Adjusted for higher than and primarily to the earnings higher $XXX.X EBITDA the year-ago period, taxes, merchandise versus and total by partially Adjusted due XXXX. amortization third contribution, quarter million higher operating $XXX.X million in before higher was fuel offset was or SG&A. EBITDA, interest,

year-ago discrete from related share-based rate excess was tax the stated year-ago item the versus the quarter tax in in to And release, rate quarter benefits in quarter. a the payments. was The effective press to XX.X% for XX.X% as due the lower tax

take we quarter, the market strengthen transactions conditions During balance and of several favorable executed did sheet. to further our advantage

$XXX notes with a X% XXXX coupon million due we and notes reissued our $XXX XXXX. due new million, First, X.XX% coupon of called

we our to facility to and since we Additionally, facility access line, capacity our overall ABL dropping us the lower lowered five million, the rarely to and $XXX side is us this renewed for advantageous which allows facility fees. years

and of also We renew March to the of took maturity opportunity from loan, extending to term up the top XXXX. XXXX August our

And strength that $XXX balance and performance million financial is facility the current comfortable the approved felt $XXX million. our term from our sheet, we $XXX increasing of million at time, to on facility. drawn loan Given

the lower also implemented hedge principal our high-yield swap also over years. and rate LIBOR the loan, issuances. LIBOR rate, $XXX effectively we an a than cost an into by four on entering with locks transaction locks In in current rate than term connection standard lower interest of million This all-in

result extinguishment but a interest early debt on $X.XX $XX.X The in million. result bond loss will annual in reissuance of did million savings of

term in transaction loan also while Additionally, while favorable resulted transactions savings locking rates our more bundling fee in we in ABL maturities. in the linked

the in including covenant minimize liquidity corporate sheet, is our The adequate increase to share to intent expense purposes, order behind this add appropriate general for balance provide interest flexibility, and leverage repurchase. transaction to

long-term as our September $XXX the total million consisting balance As debt was was $XXX.X on value sheet of $XXX due X.XX% a XXth of of primarily result debt of term million of carrying expected these loan; in value our $XXX sheet. $XXX current as and due loan amortization broken million million notes transactions, million XXXX; term follows; are notes that carrying of on and million in addition, under $XXX XXXX; of we X.XX% remaining on million balance $XX liabilities the and carrying out

in we our These adjusted report result figures approximately ratio leverage times. an which X.X lenders to of

a cap approximately to base ABL $XXX that determinations, is which borrowing limits new us time September At periodic Our million the $XXX is currently place facility facility in undrawn. to of as present subject XXth. million with

XX, equivalents debt cash the totaled in at net of And there common as million million end and quarter. $XXX the shares September $XXX second of million. outstanding approximately were of XX.X Cash resulting

$XX was year. general to consisted $XX initiatives, and growth. for Capital EMV the million quarter $XX million which this maintenance, of about about expenditures approximately including million retail expect we corporate where were The $XX for of programs, remaining spend our million, strategic

still is $XXX to $XXX Our year, end and a up for year-to-date of $XXX the million likely million roughly midpoint capital closer we total execute between full range. budget million, capital will that the suggesting to and spend that we are

back That the it concludes financial update, I now to will turn Andrew. so

Thanks, Mindy.

total we As to expect wrap out store putting Starting with a look growth, in year within with likely I'd where XX relative guidance of is as stores us end our raze-and-rebuilds, like in range call, update announced custom on the our XXXX the close to new projects to up on quick for our guided January. we to year. XX this organic with

on of XXX,XXX million. averaged guided gallons $XXX fuel exceed a us month. we to to through on third $XXX million volume guided perspective, to putting totaled million a per month over store track $XXX XXX,XXX quarter, dollars us exceed Merchandise the range track the through per XXX,XXX of putting gallons From third contribution our have little quarter, to our range

$XXX station initiatives end Due X% range million X% the new will range other $XXX the retail as come guided full likely year maintenance to a OpEx be costs, of guided to increase. SG&A quarter, lower excluding closer cards of to a X% some increase, transformation credit of million. will spike in the and in for we second implemented toward the to above the

range also end effective the EBITDA. We spend million. and or end $XXX fuel will XX% guidance low guided lower margins to any of not come our midpoint be believe financial anticipated of the and adjusted guided specifically toward rate also including million between in $XXX income provide net metrics, our around the XX%, that of tax will capital did of or range to We

our gallon generate guided fuel a year, midpoint when EBITDA. at that the first However, of other $X.XX January all discussed we in would about per to in we $XXX expect of margin XXXX metrics, guidance we said of this million all-in

several maintain be be would it gallon prudent through a our that Given guided come per that in EBITDA performing better-than-average adjusted would chance that current around margins levels better if we there to conclude are $X.XX $XXX key categories, range million. would year-end, in than above fuel

the performance need from or macro event level per of to A that is the natural, business. associated don't geopolitical major the financial and a we generate takeaway margin, fuel And gallon key a XXXX in $X.XX from trends, can while business. next only gain the months about EBITDA XX current to at comfort month long-term to our two this certainly, rolling need to investors look happen of anything earnings change the

a will revising excluding had margin result. short-term But than year more focus, everyone a as was refocus the to practice. fuel and important continue have we that remind we investor value we elements our forward, and conversation this margin creation discussions this to going expect guidance are on forecast intent long-term I of with for better investors believe

success to to is ability stores our The viable, merchandise average. our productivity rather on higher dependent from gains and build to and margins, of network fuel dollars are and high-performing both business sustainable generate our not our increasing continue across operations, higher bottom-line accretive higher fuel contribution economically that top but and and to consistently

belief to that the continue our and create come. in to things, invest for can value share confidence have we Given to do shareholders in initiatives, the future those today we and years repurchases growth our to both

the And on that call I up open think can to note, Q&A. operator, we

from question the Ben Go from [Operator first Bienvenu of your Stephens. instructions] comes please. ahead, And line

is line open. Your

guys all, if want quarter. in quarter morning, the we saw you a ask that a vape, quarter, of MDR And to One, been In help of, us question. that Good an MDR kind lot the contribution particular, give does business. to play thanks. same I update in the degree the was lines, around that its to in frame that everyone. that. at the the Hey, in kind you exposure the I can along into up on headlines strength tobacco know elaborate contributed of result and what in and multi-part there's have

Sure.

on with manufacture which can members, fully And ways. program was number to side, ago that us So And that having loyalty begun continuing we on those those give programs allowed and the of burning identifier to on And So if aren't you unique well that it to say MDR, over on without tobacco MDR-related number have would really MDR the year by benefits contributor. number. that benefits, of Certainly, a you strong in a benefits. think million that program a I a builds gain participate them earning on X same that argue additional enrolled tobacco, participants is having about meaning, top fuel. that

the customer participants the And – they for not because stickiness shown ability they're tobacco from the dollars more gaining come in discrete demonstrated marketing and XX learn roll not and the do months. from reward to and when want members upside upside to that and focus manufacturers other can scale automation. then, those behaviors from as programs to over those there's target and that going the And change, changes. better categories off we've that more real that with I that think how very full behaviors, is do we only ourselves, we time-to-time those as on a better we lot

So the I hope question front. that addresses that on

initiatives and there's customers lot I we to as more some so on into talked path of benefits going clearly with think MDR, attributed And well. our higher that well. know, about fuel the to pump, volume, it to fuel then, purchase, excellence supports the then the side, there. going as retail you attributed stores a That of pricing our and

to announcements vapor, haven't any seen the out. come that we from relates headwinds it have certainly yet As

of part well, line the efforts with it a of very was one that. that through end to it the In brands, had fact, but were we as lot an of increases seeing. mitigating our around particular, some And already dollars manufacturer third associated product introduced of a that promotional sold we in

So a XX. Tobacco We're watching something big of this very we're supporter closely. is very,

had what ACE above compliance terms do of well bar We our average have in already the further in raise in compliance industry terms of stores. and we on

those responsible product to with to be respect this So we want category. of one retailers

that do question you know in how are of about does this I achieving optimal for in kind balance past a about profit per you. gallons. gross gallon line in between the Okay Where on Mindy, journey manage fuel that you talked XQ cents say and we then the hone you think and on in balance? what

capabilities fuel's really a we pricing our have Ben, now. great I and for, question, year That's been guess, a evolving

learn quarter, So what in have us we the and is every more more optimally. we're last four doing, done store quarters, every allowing single which price successive to about

first and I up have think quite years, the months what emphasizing past we that in because the volumes, been needed back. and six the to year, saw giving we of we volumes several make certainly stand take were for we frankly, a

smart do so what optimize emphasis the store think the the trying third quarter as a in I volume, is at we impact saw continued that also it you our to also on very well. in but way can margin

the getting, the of if that at that regenerating, and just volumes $X.XX kind makes impact the to we we're the can obviously, a Because were a make $X.XX quarter it to meaningful improvement margin in result.

So say to not we that We want where realize a and we're would marathon not the is this yet. that way all sprint. I a be

we working really consistently are in to we pricing apply network. the across can create so enduring that an And capability fuel's

So optimistically, say there. I would just maybe we're halfway

unleaded just to can and continue we capabilities that And other sell refine that think with products that can we that not I we regular do do. all we yet those there's So to have with too. but uncovered then, also things not diesel still

certainly is not of view. my improvement over the point So from

other strategic Yeah. optimization mean, and I Ben, I'd thing add loosely. as people pricing word one price use very, very well. the

There's the our into type lack the volume and of marketplace my Mindy, critical and price in no get margin getting. continues environment, achieve magnificent Our that. both what Tran, that we're have position be margin the to think, able of optimize store with the they're consumers. different terms I the every associated very Lester we're every to are put margins strategy low-price right strategy in the store-by-store that team or what off the price has volume to for eyes pricing that in that that what And making and is. consumer-facing doing capability the of customers have and and – And find to the to and able effectively then, be But and point trade-offs we're is our the going across in differential place. that others retailer and this is of is of to clarity higher in we abandoned everyday eyes optimization hats

great. great best Okay, detail. Congrats of luck. That's and

of Raymond question Your Bobby the with Go line next from ahead, James. Griffin comes please.

open. line Your is

my thank and taking everybody, quarter. on questions, morning, a you Good congrats for great

Thanks, Bobby.

Thanks.

much want can you it were sense Was go how around get driver in strong of dollar's just strong industry commentary tobacco, I Do biggest category the some what you and guys the the to Or market out have traditional top you comps drivers us a of share able the to back to the combustible of the the a First, quarter. what on itself? then parse we that, XQ? the the tobacco from comp? for of basis e-cigarettes? MDR, And in sense over a did of Can help take quarter? was comps the of tobacco maybe secondly,

Yeah.

the I think the down X% the range X% quarters. for that suggest numbers of last that's on been our to the on trend couple cigarette volume, kind certainly industry side, and in think is I of

year. gain a end our really of XXXX started definitely declines when side, back share program arresting the Look, started – toward side. in trend it's reversal. quick call a our cat this we it that So seeing we And we saw of on introduced, on our we

critical. of to per And in the to we've programs tactics about and timing able our a pack part big be and those I it. get sense been think started point. And participate chosen at that's we back in, shares months being carton So of what gaining were that

one that day burn. You that as And as, doing I ads. just for up additional the also but know, were creates largely MDR as doing targeted mentioned, getting that, stickiness they those within participants million well that, they're customers XX points MDR app. to you do building allows they're could

program, to that's it rolls when think important that especially end I an off. So

We underestimate differently on in volume state in growth we tobacco are of about manufacturing there that their the or fuel certain what states minimum – states those have enhanced like pricing when price the you states have made, been this well capabilities states, same around you team's certain the quarters within really that X% to gotten probably we a do know, choices we prices store-by-store our have versus the that we've all five our smart as well. partners. pricing, store think And invest, where And basis. significant. and investing and those as have increases, And where brands certainly, our portfolio as don't don't tactics fuel with for regulations driving traffic specific really products about

As – we the addition vapor manufacturer third of margin mentioned contribution sales it saw we on in introduce the had. continued vapor So we significant existing the we that products and that, side, did we on had growth in was top a and from

together. cigarettes, So really, combination the of our business some no our in environment. Bobby, on certainly offset It's got We're that's I'd attention out as parts say lay that implications vaping plan, cetera, well, has thing. of that a all et that watching been those bans as XXXX we lot playing current introduced in the it's discussed, to of knowing things of menthol legislation the we've to leverage paying products, that's house, for a one so been

Was then, dissipate I at XX little it unit a drag to margin I it starting in XQ? a on basis detail. from to MDR believe, appreciate that in little the bit, less things, point of XQ. side are drag was you're starting the see And

how get about points non-transactional to able that. terms continue of more transactional same. efficient reward in do and It's There's customers, be to and I think, as the And we'll points. we there's we smarter

full getting and about customers year level I cetera. we points promoting through there. There's, think sign in higher would et a one terms as in enrollment, and in go of probably to say, up non-transactional So MDR

to So while our we we'll continue the be the able the to for customers. of find optimize got front benefits maintaining ways to that in program

high-level Okay question. kind a and then lastly, of

a When X% Is up down walked it a work tobacco market comp price the volumes, the some a through because flattish with these of share? been like? manufacturer to steady a in frame a of what is then, state? into we some get comping Is a more environment once of entry that you're it guys category increases, business help more as doing, we us cadence taking participating anything more normal low of were and programs. and comping have levels itself, environment, the sell-ins that you in look On normalized single-digit MDR,

Yeah.

just of too think it's particular be this, terms to there category honest this legislative and much on environment sub-categories. the too There's I noise out the tell, to early regulatory with what in is you.

provide differentiated, components, they can customer positioned buying in to any the of We've that insights know will iQOS I see front. help manufacturers else we're current small longitudinal going navigate it. So side buying and going what especially the innovations, more to marketing level iQOS see part been we're if to through on continue we described big toward uniquely the believe in retailers support the continuum that I what than basis. the refills think and We risk, those out And more the continue rollout of in an as a as safer around help we're in about well. innovation the before, of that addition to And a to not manufacturers to the buying other were there, cigarette to on they're I retailer environment the continue products, see certainly And think of Atlanta.

the the and best fourth in Okay. quarter. I all appreciate of luck details,

Thank you.

comes question ahead, from next line Jeffries. the of Christopher Mandeville please. Your from Go

is Your open. line

in some hoping press I loyalty the that to reflect performance how the the far morning. of guess on get for stating yet, model. to metrics everything end confusion pretty morning this the those release has specifically do Hey, notable you a business there suggest contributor that sales MDR same-store introduced compare just thus would to I'm itself, good program. Andrew, the my in stated I been you here. overall clarity a comment two. But apologize not But

Yeah.

describe average the discount you same-store confusion – basis month, The so all totals, and the The was The numbers. quarter, and the a and per for the the store average in the I for it's not deferral. discount would on sales, sorry discount sign have is a similar gallon store is that, of million and way deferral, and XX $X at metric. this points of in constant customers like it. in it reflected that here So burning fairly rates, per The are same-store deferral for earning merch in number $X.XX been per now shows is total a it which month as fuel. up And total members and points the has effective the programs.

So various were and from chose standpoint, those to treatment accounting take. an accounting the selections that we

it's at So are higher deferrals while will And the dollars both that. margin contribution cetera. the reducing done and contribution fairly we from value constant, numbers, and evaluations total discount the and from is of and when I one guess that absolutely adjustments for sales, the volumes it's of merchandise, et ultimately, fuel are breakage, point, sales actuarial look on time, it other in supporting the make down to kind based we up time points the to or total

that do some that. clarifying the hope future, We'll better confusion. up footnotes about I so our cleared job in sorry So a

least to contributed correct the in to I No. of wrong that fine. of kind And maybe think off the X% very here, if have just that at of past, the there. may you terms fairly gallons. color I'm MDR, but appreciate That's building I then, me referenced in

in-store to how guess to I contributed up dynamics. I'm much it trying So frame still

give to volume initiatives So then, attribution fuel now beginning are we of from we the and believe that that insights a better an set. working new merch. on We'll tactics, XXXX X% kind Look, have are back both we the have pricing would with expect levels stores the still better knowing longer, as X% year much fuel and at and range, our excellence, that I online. I retail And standpoint that coming of And coming well. the data Yeah. in guidance. supporting higher raze-and-rebuild in are improvements are

the at trend I side, part able And merchandise distinction relevant. we some that their to the becomes, think customers that's if to the have, phone our was and less be or we'll see On it ongoing tobacco former point, numbers number, entering we continue that So that. frankly, between are it program do that MDR is of that's supporting the

valuable incredibly get. insights can data also is the What's and we that

where across members So surveys, can longitudinal performance. attach if a to member link specific, imagine data that SKU you do the and to to category-specific, ability consumer then, can financial world products, got vendor-specific, you've you specific behaviors, back

for for lot your deeper a on on our this got on that of You've wealth certainly I'd the end and create consumer the goods have that. that a stir work we packaged insights we'll But to doing coming to are the things the partners that insights given we've got body customers in to and most how work value to going an of lot already a on of stickiness the look, tobacco and with significant from next manufacturing value them, is side. of We're us, seeing them call front, so lot on. a say,

nitpick Okay results the seeing actually some are the we two-year overall. because basis, on a turned I to so pretty strong did But still touch hate one And it are notable categories. in then, a last it just as for the slow comps, slightly nontobacco to though do basis, percentage me. the on margin appears and negative. contribution just then pressure

type value hope that just cost to part drive you overall is some it of or greater a pressure? push your on and traffic or on, competitive a and decision can additional greater going maybe or provide color strategic to basket So what's is larger there some in general

have sales they nontobacco participants, given, that able the the store the paying that candy to see had MDR knocked but stand say same with engagement I'll you comes candy. XX% We over on your out additional hey, the associates through them program of any they associates Yeah. bars. two move those let's customer focused behind honest and promotional park. we whose of top X when October, really and in it haven't some store so associate. just many we to about focus some and to at the things. encourage million drive one doing that, amount because they a – points point, become out they We've do say I'd on let's ask them we'll to the there's campaigns put we and you, managers only to members on And been members priority, some without the been quite can participant, with get go learned can categories intensity a Candy customer member, was contest side. of a decided, is Over running be MDR of their a with having XXXX sell our In on they've that. said back points, contest to emphasis to just where

so number expect it's think And put QX We I to I So in focusing there's blew getting that improve. So you on. that out the of on focus would water. intense number things only many back that, to really And given level of can back

a to them in beverages, you coffee, customers grow stores been The much got cetera. They we but in store to that have dispensed that raze-and-rebuild ability get store. it the to when investing other lot the the category, got that we've the have to only beverages, of et center teas, see category. need that our store, A larger represents we sell iced selection, dispensed

investments those promotional in categories. did And so make we some

and explain improvements should those some I So those. chunk it, in think see we big of a two things

the the rest the color, best and I Perfect. year. luck of appreciate on of

Thank you.

Go [Operator Your John line Morgan. come of spend the Royall from ahead, next instructions] question please. J.P.

open. Your line is

Thanks impressive taking guys. morning, good for my question, really Hey, quarter.

you. Thank

albeit $X.XX quarter. just a fuel And mentioned quarter, big seasonally initiatives the this kind long-term point, of wondering drove that in think this in to external have on you a margin, about range. event strong got But didn't $X.XX any has long-term structurally higher range as if at $X.XX-plus you place. given the you talked moved margin, you there previously So that you the

fourth Certainly credit this year breakeven of environments, higher first guess Yeah. providing significantly. the costs think up if their retailers you long, third not kind fees. in we're an the fuel range, with but you I of, the and second, if ACT thing at from see what going look requirements about survey, quartile term that the we is card

kind look be made around that there's at certainly the cost lot kind there's pressure of retailers of comments grocery up in to margins you of some of environment. anecdotal a the suggest of If that this, move by going would upside to evidence club some and future

position, So retailer, low or defend the maintain and those to But position. in were taker look we'll that margin, a able factors price as certainly, that and marketplace, maintain more capture an higher we're are we're everyday volume, if factors that. than factors pushing I And the toward lot to say back grow to So structural lower price look underpin a And structural margins. margins more going what do that? there's that

refinancing. out of number just the cash about program, a then And thinking seems relatively you debt big buyback you. it net with from the quarter Thank Okay. in buyback, the the the on but million frontloading $XXX took in-line was the

Or if drawing might is change was XQ? option? of question the be pace my equation from the you after today, same guess you stock down slow I would always the idea and the put movement maintaining the to cash aside pace an So as how

I'm kind sorry, question, it part up? repeat the the last you of of can broke

Yeah. I'm off got I just the sorry. headset.

the today, drawing slow after was you was fact to the put is the cash part idea always be down if XQ pace to last the the maintain aside buyback you would of up pace? the So the that or – stock potentially same XX%-plus

of provide going the to guidance share on timing any not So we're repurchase.

limiting And have think years. XX% return compounded the course the we've done what over on And do as about five in the that year, to be we've run. what program I cute too capacity whenever about get we to of we we in to come $XXX to authorized. We're smart we buyback. talked report the But price, in want, five want out can, for much not factor. what And sheet too back we'll February as next years. the the our in first the we're to to balance need get But even what maintain our our share as to do did the if wanted us do on sheet on of at to attractive a looks this do annual to allows do certainly, maintain going or try not as to level, that million we and do we about savvy we That's able the that. balance board over that, talked and long – QX. front

you. thank Great,

the with comes J.P. Morgan. Your from Casella next Carla please. question Go of line ahead,

Your line is open.

was taking then follow-up. sequencing have gas for on is month-to-month on color This wondering give you prices Carla. the I some the fuel I Clark and from for And a Sarah margins. if could of question. more thanks Hi,

just I every would margins say, going work Yeah. and but inversely. fuel into month, get to not prices I'm single gas

go are smaller. and our are when up margins wider, prices or down go So margins prices

you so with see And track the of beginning pretty fuel that prices margins. good time, you if will correlation since

say. prices we So is like normal of QX you had upside I sense seasonally see in quarter the don't than or movements a in to else kind really more This that in good know QX. what downside typically

see thank you you. any competitors? impact or the then, And Got of you storms do it, on

In We've place. lot got storms the particular of what over all a region?

such as Right, Texas.

look, When affect number running flooding needle. couple they're Yeah. up and didn't have had back stores. really of quickly. too supply almost and abnormal. I We've the of mean X,XXX a a But It small stores nothing to move a it's you environment. pretty really in network the

all something that, going or unless Irma lost like are or have get Harvey the or things to Michael something you're like an on. other to really that So in going it's going a

as we which any on didn't infrastructure. Sarah, storms we hurricane peak also of similar major inflicted see And to really damage season, saw with year last the

our the have been have in to you a would that detriment case more would seen results. which meaningful So

pretty the the gets and normal Yeah, then, storm, normal slowdown during we just quick. saw back to then, pre-buying, the it and

And with some for comments. that, over final there are turn no Andrew more back it like questions. I'd to to

you call. Great, joining for well, today's thank

for they've that said, working two rewarding has hard been well for I very really us. really you thank long-term, investment the and for and fulfilling this This been Murphy thank last position our I was the years an so to three team. team and quarter joining. done all And to As want a to stay the to on for

and call. your conference thank you We today's gentlemen, for do Ladies does participation. this conclude

You may now disconnect.