Murphy USA (MUSA) 2 May 212021 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Murphy USA First Quarter 2021 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Christian Pikul, Vice President of Investor Relations. Please go ahead.

Great. good and Megan, you, morning, everyone. Thank

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

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

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

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

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

today. everyone us to Thank welcome you, Christian. morning, Good joining and

of through otherwise our by retail which period that business our factors, prices, strong the network; severe but not our heart least, year last X/X February, able comping may typically in are investors. quarter extra geographic of fuel the We reported a not day impacting storm margins; over leap XXXX. not in rising but the and anticipated number overcome surprised a including compressed was winter footprint been came delivered very pleased, where The fully of to have first company detrimental especially performance during the such results

than Additionally, we is only that mind. first of and impact. of of of our to But performance. the QuickChek results, of model review performance QuickChek the X I'm continued quarter benefits there acquisition, that strong a advantaged appreciate the this bit our reflects the reflect and a in as is which the deliver months business unique noise, to more impact key of through financial results X quarter our resilience in points ever, operating going with first noise

are will impacting First, higher and industry margins, breakeven fuel fuel industry benefit. to positively economics we continue

on from categories to are gains like focusing highly critical and on beverage. and Second, share we market in holding tobacco encouraged are early efforts food

including are Third, areas, about the confident synergies. extremely G&A and acquisition fuels, our ability excited estimate merchandise synergy the and we to increasingly OpEx of $XX our QuickChek achieve across million remain in X-year reverse

First, I'll talk fuel. about

behaviors, only an changing their enduring Fuel our the acquired response been we impact high-volume to is last lower the store and volumes in seeing release, the higher combination have X dramatically these typically being company generates for this timing the which reflecting of combined offset reviewing tables in that peer year. as effectively When sales first periods combined do out gains. price results benefits supply gallons X that of baseline, group the prices, remained which metrics forced time base Page rising of different what March, in were first first the but the COVID are X earned to All-in a When we of earnings XX in business stores sales, $X.XXX but do the positive higher average some were change of the time results we believe Even lower of performance impacts for and less structural rather XXXX gallon elements from customer and product further store customer industry acquisition, from more marketplace, I we ongoing lower higher of sales versus and on to impact factoring is on otherwise given advantaged than retail QuickChek was and capture the complementary to year-over-year showcasing from more the Further, quarter. will it our to price differentiate us pre-COVID early would Murphy accounting core our margins. markets all period capability, volumes the in in that during inventory margin. months were in retail margins the these during traffic margins players cost For a the point will they March temporary of the accentuated double-digit of the the are The not both results. despite in hand, sold. impact From as encountered future. the model the periods. our until particularly same margins rising achieved to of per in per the excludes history, X January XXXX on month company compress prices impact these environments comped same-store months metric clear USA which quarter Murphy other impressive, months, the that nontobacco initial and over

and from the As see X% table, including volumes when you were QuickChek. down XX% can roughly year-over-year for MUSA

to X% relative on volumes month basis over a past store in are market a showing baseline, demand pickup per the capture within April XXXX and share improving month. of Importantly, the

let's tables. are taking only the not results review merchandise is these in fuel we so share, However, area

dollars and particularly experienced was took on we growth nearly in only nontobacco categories X%, the grew the up share same-store strength on results, a sales where year grow or by surpassed even both about both fuel and MUSA respectively, we X-year recovered only in the by a as tobacco merchandise X-year stack can are X.X%, to X.X%, hold, COVID-impacted margin attached grew in sales last category further XX.X% stronger to, and see to margin stack not of gains and indicating continuing last year's sales results. where we COVID but Tobacco evidenced You XX.X%. complemented and basis as contribution performance growth business, was nonattached holding XX%

general and $X growth lotto in Murphy's helped the dollars packaged beverage about first together, only tobacco, in merchandise lottery, million by drive Taken margin quarter. contribution higher

pre-COVID innovative carton We are continued bulk through delivering higher these preference levels. results for and continued which efforts and consumer pricing than purchasing, remains promotion

million food XX% food have seeing this be want that is that business, I more acquisition to existing to quick point, merchandise capitalized $XX consolidated been opportunity could to million, opportunity. contribution. margins. initial million integration focus that QuickChek on initiatives, value the and Of the assortment food Engagement longer-term the attributable high, to around team in validated QuickChek. than between and this $XXX excitement will the supply a XXx and thoughtful of first execution of more both already Obviously, gross In benefits merchandise not efforts we that the approach beverage on as improvement business, in Of with with not $XX that The beverage That $XX unique a roughly of has category we lot is increasing. contribution impact Given brand. unfolding and and of my in was care capabilities efforts amount has the and value roughly nontobacco assuming the store-level reiterate we of we early that QuickChek the core category Murphy better million is results. deliberately little I creation beverage QuickChek for want at pleased is to and coming includes generated our quarters. new provide are and color the $X.X which positively wins distinct chain already this teams our million optimization, core growth have and the on Murphy results, platforms a the million in our coming synergy the appreciative taking product from final integration $XX opportunities and dilute quarter more and was contribution, of efforts

different add each accelerating the across strategy leveraging some I'll respect see through scale, give range our obvious opportunities color leveraging drive business, materially you of easily we scale, from different X to example areas management's critical As actions, sharing initiatives. the to and practices lenses attainable of opportunities. value we around to integration the perhaps area more but process. With benefits an of apparent, less best

deeply significant source company. lower we For area expiration enhancement rates preparing are the in margin engaged insurance bundling upcoming of scale addition of example, provided at some in a address to by consolidate fuel and the combined the contract coverages as in procurement to

informative highly Sharing helped savings XXXX. renewal Additional exercise in across that in opportunities. both parties organizations vendor coming both revenue and opportunities been remain unlock for has a later other best practices for early and has contracts XXXX

and proof that future some we other From integrated technological as difficult first are externalities our has eliminating some on over results activity. and For months creation utilize our in we that capabilities the further of their Mindy computer-assisted pace such The summarize, efforts these sets home very and fuel Mindy? will we us are advantaged, price-challenged functions stores. further ordering, deploying that can streamline identifying it the against will some QuickChek economic variety accelerate exploiting strategy own self-checkout achievements QuickChek. results financing development in use fact currently and turn agile proof the in and financial automate I foster challenging detail and how our we a competitor outsourced a into to common technologies environments To and tactics, enhancing system otherwise of of and of drive Further, where help redundancies on Murphy quarter business will on successfully the review services results market-based deliver our remains and growth their quarter of in at data with pricing and results. provide quicker instance, value strategies an of years. a expertise deliver With at are the net model to pricing by achieved a our perspective, that, recent performance. scalability as the apparent coming well such to focused certain our develop back-office help weather-driven are fuels calibrate to pricing position efficiently processes, customer-facing

funded XX, of good million January QuickChek due by morning, We XX-year the the Thanks, Andrew, and acquisition senior X.XX% $XXX XXXX. of notes issuance closed everyone.

was We due to in of the had under balance a prepayable pay million place. that we loan term loan, also new previous term used issued part the $XXX which

total facility Additionally, at around flow With to the those from XX $X.X facility. revolving a ABL $XXX with billion credit went to to we sheet, transactions, December new add our billion. replaced around balance further debt million flexibility cash $X

include does $XXX obligations You will of notice sheet balance on that debt. QuickChek we have long-term lease million long-term billion figure considered the and $X.XXX are debt, under that this

you of lease changes balance combined operating include items relates now right-of-use item recorded the noncurrent a assets items threshold of balances, operating $XXX.X sheet, included in balances intangible notice name. immaterial. QuickChek million They those lease effect other X The to meet net When were assets, the section previously intangible of of value and in of operating in of the all primarily presentation. they part to for incremental the operating offset leases as of prior a acquisition intangibles. long-term is line added that company increase the to X and will the leases accounts trade which our and Additionally, the The Total the new assets on balance liability has the assets corresponding separate are $XXX.X are QuickChek-related million. their sheet those of line right-of-use includes assets. the

from week, it QuickChek as You is will are the some clarity goodwill the will resulting first you later XX-Q the when but those be I want More information time filed to items disclosed also to notice this seeing $XXX.X them. did acquisition. in million of add this is

during Adjusted QuickChek. first quarter compared months versus So in earnings $X.X and for million interest, before ago, the impact in gasoline in items. taxes, to include which $XXX.X a EBITDA, period first now quarter billion, X of standard or million not per year inclusive XXXX revenue prices roughly were same the for a does billion $XXX.X of the of retail $X.X Average XXXX. XXXX. Total quarter amortization, was review some $X.XX depreciation QuickChek of in gallon versus $X.XX the was

as net additional income to QuickChek, coupled of first X our the as $XXX million from depreciation obligations quarter $XX.X million those interest on out million of which Total costs, onetime million due March expense acquisition. broken versus billion, result loan debt in includes $X.X of of was the the $XX.X of Additionally, XXXX. QuickChek of was and $X.XXX, XXXX notes issuance, lease $X.X the B outstanding acquisition-related with XX balance and as term long-term a approximately million in sheet debt of $XXX our

captured Additionally, and $XX operating annum lease the as obligations representing the expense. X% million reduction are of in amortization remainder liabilities, per they of term is long-term through paid current in loan

Our of cash approximately expenditures of were the X.Xx, leverage for allocated capital result equivalents a quarter and first quarter $XXX which facility Those store balance approximately undrawn. March we had in was million a million Capital ratio, which credit currently million, and outstanding growth gross is construction. $XX as cash the to and $XXX totaled the of to XX. of majority new lenders our X figures revolving this of adjusted end as report still

back over Andrew. thank I call will to So everyone. the turn now you,

Mindy. Thanks,

I I activity. Before quick on second with close want a call do Q&A, up to to quarter open comment the

earlier, increasingly per And long-term improving are performance. within excited not deliver will for nearly per and X% the and QX value to we multiyear our average levels second a in does margins support to view the that the for giving grow momentum generated line growth up will firming while operator, ability strong EBITDA of creation quarter business about the we year, up in a store shareholders. XXXX XXXX are strong that, single our open With have Q&A. and gallon, $X.XX make confident a April quarter noted very start averaged our fuel month retail of volumes As us

[Operator Instructions].

first question Inc. from Your Bienvenu Ben Stephens, with is

want business. I the about to merchandise ask

now, think move the that kind you've share XXXX. you pretty of compares, I'm like, get expect a the strong and COVID. some challenging market in hear year these through year of incremental that's quarter, seems more last even your retention -- last of as love over to start of move I'd bolstered wondering, some maybe several it and the case results gains into lapping as lapped of sustaining over accumulated first You're March we you share over we Do you these the deeply into as to obviously from as growing you're years. numbers sense best compares? strong you market the your deeper that on of how in

This is a question. great

product high to the the products, that that demonstrate promotional innovation areas XX%. category, future the the of tobacco we're initiatives the to noncombustible activity, that think the growth. some at I in And that continues in results QX behavior for new example, to are led especially contracts, the hold the close level, seeing very and funding, the certainly, the the carton XX% up

seeing stores of products, and general on sensitive, the fuel factors sort newest attached in the cetera. et rebounding Certainly, but encouraged very the continuing are that a during fuel we'll think will start value street, the and put recovering around job with the in conscious the other able the USA done and the We're is X replace more these behavior we categories well. we and best think team beverage essentially Murphy be customers as with has we Food nice that to drive new on to waiting those strong. periods. margin a fundamental was be for them PPE there volume offers some customers be on Certainly, categories with merchandise to and is comp, will of harder to that. So being changes the become price by nicely as items the the value some more inflation, consumer

the have have that's induce to new ever incentives we've there, over done all trial, cetera, product, of good. to easiest contracts, feel really we comp the new Core-Mark resets So that some et the go the the we'll and

including we the some different can transaction of you the comping growth so will merchandise I business, we're are think be QuickChek And to I the the those But that periods as than offsetting made that go also developing haven't more factors. in the been basket throughout recover pickup. declines by that year. to their is tell main in and Similarly, sales XXXX April delivery come store center already recover levels, their been that's quickly. omnichannel the COVID seen innovation along capability, are their up. food driving still their sales an and during We've food supported

We daypart, to down have not quick and -- down late early seeing shift. slowing introduction slowed but daypart night and the are driving drinks morning is recover, the beverage as dispense certainly delivery the in growth

And so we're continuing nicely to recover see comp. that against its business

of the by driven last to So versus some we comps that continue drivers think put improvement show main will us different allow both year. of I up signs to or businesses exceptional sustain customer grow

level headlines question you from this I'm this be that to category menthol-flavored could to it is think, FDA's second to opinion about just your might will you to to in related poised of proposal My step sure offer is other fundamentals, tobacco helpful. products. on morning the switching ban pushback or the your manifest exposure the the down probably it, it's consumption to your cigarettes. That's face and extent business heavily But Okay. how reduction itself the litigated. whether a if in implemented, industry

us get sense help hypothetical Just a of here?

Exactly. manufacturers, X process. a industry process, announcement see from our the is challenges X the which organizations. Well, typically We'll look, rule-making expect pretty starts year grueling to to experience is

of had there Smokers in our about look cities store. and happened Canada, what where implement similar state place, have cigarette you've this, at counties bands local you by nowhere we June they efforts that you menthol example an see but as has so a Quit. but passed of they regulatory business. some to It's bolstered announcements When California Massachusetts of can XX% look in and law, And banned and And ahead rule-making XXXX. process, it's faced effective you go Sometimes out bans delays. some like XXX with cigarettes a the and you about got

So there threat is a there.

one And past We've the products. think space growing Murphy Awards, noncombustible with the assortment of to years. we to of Drive products. comprehensive customers those. benefits we the value. the a efforts the of shelf grow is through noncombustible now, have intentional allocating over resources our got I that promotional most differentiated We're our We're X business deliver can lot those providing

the and a us capturing of well marketing along targeted position efforts allow will the market-leading to be continuum in that that. we're risk on positioned So products new

positioned to processes, we're processes these for adapt So and it's go I to it shift, as through. important long rule-making well takes that just category, a time anyone an as think to knowing the

my Okay. if In stock you it Perfect. the quarter, or around buying you when market of any you back in wondering, be shares have the so. back guys there And last question. Did XXX,XXX related or confirmation to first quick stock the did windows any I'm blackout QuickChek deal? the the in could buy provisions were as quarter?

No.

levels typically, as place, you that plans XXbX-X once we that about, So have and have achieved, talk we they locks out. in

I So the the we'd have opened the transaction. certainly, until wouldn't and it the for window the are if was closed objective the an by example, already buying year, the next But would We believe end of new QX then results. announcing, been we and I we announcing QuickChek next week, the achieved our first in of window. year. January open part after XXbX-X week, XX, had following we have believe,

that year, if just blackout, we the it started finished would been before the blackout been only that really new helps. would have have what we of the had a wouldn't So beginning we have

next question Fishbein Matt from is with Jefferies. Your

I the as So the losses, out further we all Interested terms in, it all through on all that? volume pandemic. just And after pandemic on a lap a macro longer takes question metrics to or your U.S. fuel your march of in lot of fuel what growth broader thoughts Interested including long-term noise Is hear volume volume guess, and down? puts thoughts same-store Is flat? on latest up term. consumption. it latest on gasoline we are

can defining be answer, how more with precise Yes. my And Matt? So term? you I are longer

Yes.

the lap we volume after pandemic So impact lingering of was.

et be down you terms to going things in said when of still, X% people they should out, April. cetera. are way So I in think the Further we're work, to back

than X my more guess. than -- but within a X, X So is year less to

Yes.

long-term volume growth? Just like of the fuel run rate

periods the future. Yes. was we few the above and CAFE about would Look, miles it is I last a standards. we a off, did that think work where with periods XXXX growing we mean, faster and and growing be if to Murphy was fuel COVID demand et few higher you the back was CAFE fall But And positive markets, or XXXX, category investors, to that that, plus to at years spun some going that. over had post it's in below outlook traveled When XXXX shared said We heightened big I think and there a foreseeable standards, the into cetera, demand X.X% X% saw year variable minus coming we in vehicle work, a recovery CAFE we national some standards, between X.X%, X.X% we the a we said the saw the since year. level. back economy the switched lower in population

still range. that So within

we so that. And guided

by that be of We're XXXX to expected back that. now. X% We the of up XXXX volumes end around marching kind of levels. We're within to

people price value us we're that sensitive, putting price, other with bit part on higher comes high-volume a the think the low volume more advantages I more the with retailers. become and street or prices, little of to the

so Works continue Murphy for I we our think And engagement promotions, Drive with to there. have

going it halfway back through be to going XXXX we into that about when really it structural but be we've will when those think So margin the Don't talked to I XXXX levels? environment favor XXXX? that regardless get place. takes Is know, exactly of us is to

GDP. really built plug-in And term, that fuel hybrid have you're longer that the the been to of vehicles, of back of electric what's into auto It's kind which back the I and our the level, standards of a especially model drive CAFE into cars, the demand. introduction it's kind think fuel once vehicles, driving how electric mix then of prices basic of over you projections. get fleet, all

are And environment. to to X.X% that's noise minus out going people economy of asked time. vehicles. We think back driving, and know is lot a way or so we It out there a all gets if we're electric get Murphy terms nationally, where being of shifting the impact, today, certainly auto of there don't having lower there's But preferences, registered that markets and see the adoption cars just an X few within was X-year -- period. fleet. There's to plus the in within about going a the certainly, we the that year customer effect because

very longer helpful. to And a That's second Okay. sticking the term, question. just

amount I number being new stores you're coming bunch seeing? a the cumulative inflation Given square to know construction built Any online. of this there's shortages. you of owing can for materials building been and costs supply year provide that cost of footage color on

and your you supply construction your material seat? see chain that how wondering impacts now of where right new-builds kind from Just that

Yes.

they're we So USA stores, eye built. haven't our certainly on. modular the something seen for It's Murphy Certainly, we're keeping that yet. that

where days fairly in and place gets the process couple And contracts so in pretty underground, and a dispensers preparation cost a in then it's those. got of amount is tank around goes of And set the up within the brought site and of go. the construction large we've a straightforward the store the

ramp averages. that store or Murphy very up volumes established I efforts the and Their that year keeping and fuel on in nicely. contracts, an stores So say the that above will last we our procurement have continue built new to inflation. certainly ramp the still eye before, year the all we're

X,XXX we we're that square stores in remain encouraged very markets the so of And by performance in. those building those the foot

from next Goldman Bonnie with Herzog Your is question Sachs.

remind here. touch is Bonnie. you political especially watching actually would just actually, environment quickly that potential you of increase to base on in could And we of another of that if could Congress? the be I topic for closely. then could store us Sam the wage to the commentary have wages last see at We're for play to increases, separately, the your as wage us This a wages? and federal the might night I Reid compensation your to expenses out you how in see obviously maybe employee effort level, wanted structure heard longer-term guess, were impacted and pitching level we address in here might and light some how be on update what and at concerted

discussion Sure. that wage start what bicoastal an higher the national of urban areas issues. wages, different to rural but need there's $XX about the lot you with hour areas the country. And need The interior support of folks a than you in fraught is minimum our in is what

hope really so all fits And make go there. lot would of I again proposal, the wouldn't try a path size down one we to comment be sense. doesn't that would that that the a of And

the pay the biggest seeing of all labor at -- are level labor we're low for the other at XX I to received. We the hitting of say that availability tax of challenge at the many vacation on short now time. your all-time supply fuel retailers, between local benefits a that taking facing it a and in people wages. of credits, state level cetera. It's of they've unemployment windfall an once, period pressure would our this right is from that is us, workers, very because would affecting stimulus the checks, of they've only amount weeks received basically And because think our work benefits about of truck I driving of carriers, not et

out all on have some And is given work back that of stimulus so to there. pressure wages, people attract those trying a natural just to you're challenges to come the and will

sharing do. managers hope also They in participate they the level based at They have are on all on in structure receive to medical profit wage beat. salary. Our store commissions We are incentives, XXX(k). benefits. They try which they

our was by during in And many the not there so to period even certain are place, valued counted of components within may be abilities those just are shift when components formulas. workers put higher they but in that, though FLSA like the

hourly, wage with it's the For mostly a hourly benefits.

So self-checkout adopter those are XX technology an did has eye QuickChek on. that the there's years. had customer-facing keeping an reference for in as I early things that we're over

new have technology our to QuickChek about have but all labor And the certainly, around to stores, levers think that. we when have age-restricted we do there for self-checkout. at have so be able that products, And to you stores

other thing the industry its $XX We pass convenience it don't Certainly, wage, has gasoline the and $XX prices. ability we to it's pandemic. prices. falling of industry The that most do the through during with if to plus million demonstrated nationally, to every ability that do think day is headwinds to I other the higher the probably that a went rising industries minimum ability the to pass-through prices we because our to implemented hundreds already time, our mix headwind. have stores into see lower higher technology And higher that have to will our industry of expect business again cost for advantaged to should us which that allow those the costs industry the in at model labor leverage our over and once stores, we face would consumers. have

it. lot our that all regulations, of a understand into in to a around sense. size levers. approach make We'd doesn't least do like one business those industry force a we got at to we've fits head country where a try see the have if and We So that put don't place whole

side. just could one the alcoholic super all If sneak I helpful more beverage That's color on in around.

XXXX, to kind of guys given look color here, non-tobacco a strength see seen of merchandise XXXX? have You alcohol retail mix in some outlook great step-up we especially side might of expecting particularly in guys the merchandise see today. a this in slowdown on wanted that given premise, have your maybe I the here That business said, a on if into across we of ton are in to you for your

I on -- at don't particular point. have view Yes. that this We don't a

our resets pricing the singles done, have that. think help the that, helped on have we on on I that

So to at this talk that we're our having are or view changes nothing those seen the stores that in about provide where And that where increasingly And more that get the we're on I've stores able able there's licenses. teams product. point XXXX. to licenses in required, we're

James. Bobby Your Raymond next from with question is Griffin

driving resets sales margin the product help Maybe the wrap dive a around sales are referenced? performance they those, off product for to areas our Andrew, of head me, in sales? or accretive First are little that margin anything stores just aspect non-tobacco us they some -- maybe side are of these can that the in resets of good accretive? more Just you there the you and what to merchandise some clearly of and categories the in bit

merchandising I the on lose across Reducing now able sense. pricings just see XXX, mean truly we brands. innovation and There's the promotions the insights, volume, to every pricing around, introduce that our we're space dissect people board to of We visual there. capabilities, part new support just seeing in take core Yes. where merchandising, product a the take where of data, out not can have move combinations management, makes the category. lot going and we're and every it's store it knowhow and and the the tools, decision

those being insights products that. it's sets. Rewards I category, a So leader allocating promotional across Bobby, be dollars mean, particular about the in getting leveraging do space tobacco the able we talked noncombustible the the any not and get sets, X sets, it's and that, to the and to We Murphy from center items Drive beverage really advantage store to more

say I'd across really it's the board. So

offerings, customer store? much a Murphy's basis, new this than points Okay. And and with standard consistent seeing you a on then customers a the bit, some on maybe of price to but Drive Rewards more model able in a on the seeing that, to you new your do on touched quicker Murphy in historically data, follow-up are new so maybe faster, little basis or now, Murphy coming

and don't it's we've multi already we about single packs. that's just pack. someone also a They incentivize are, before, who's targeted, buying to talked individual need want We much buying incentivize but the and more this to so

things. that us of especially go try And on able new expectations longitudinal we with allows where partners. that that surveys exceed those to the do, offers, the our combination that we're in products and across have to have data products the to match It's CPG really willingness can survey targeted insights. you we so preferences, really indicates data data the that With all desires, with

targeted towards time. so risk funding which transition are against these new helps the but putting and products in that not over And this products doing more us it's often, more only low categories, to innovative new -- more behind it folks grow more

March, impact a to similar that then we as did stimulus see see -- hit? around And the checks Okay. did of started type any you April did you kind of year last

didn't. We really

we muffled we I that kind saw et looking initial those at for think that data And then saw might itself. of working. amplitude some but have we one been from it really last check started of in, coming the the payroll things was just year other stimulus impact, the the cetera, unemployment of with not checks the

broadly within bricks-and-mortar online is money that well. of and a across so and as different And lot store spent our being outlets

everything repeatable it's would as a So there, continue bump because I business. unemployment, to all one But the see as stimulus, we of not that's out think big just think.

Okay. structural for than environment, seen little you side, you me, And margins. retail changes Andrew, on on in is guys touched the bit how this and then and the the lastly normal a higher fuel about

you gaps the Given seeing smaller your some versus actually peers? even but advantage of operators, gap structural widen of the bigger you're peers that in price pressure a actually also your seeing are to margins, price versus that terms at where above-average these

That's behind in about more you're is be we that, periods, to trying happy coming I safety stock you store-by-store doesn't, level. that where we won't. aggressive just during getting makes largely had it But challenges it you're those back when we we were can I'm inventories going Southwest will. your the not blizzard Where at stores imagine to of market Certainly point Southeast. replenish one up. sense really market say having to a environment mean us. that to Where that, the phenomenon. and had by out we do environment XXX

that's decision, capabilities that and while the sense it that enhanced So makes to customer actually where it's really to more, sense do benefit everyday know retail it and low-price where how We and maximize perception. of when, to a makes our position widen pricing top-of-mind maintaining differential. contribution the store-by-store where a to larger maintain

John JPMorgan. is Royall with from Your next question

this missed away affected prices, to double not margin. said by in RIN net I for where in RINs if bit, more Apologize and very from typical margin, earlier, past that in but offset confirm you've by the PS&W that just than I did weakness strength the the amount is step plus the to which strong $X.XX wanted RINs are have is a

coming just long-term gains just make -- with -- to were want on kind margin, inventory to held place on And the sure has excuse so the price in of $X.XX commodity between I around $X.XX the and relationship that inventory me, and the $X.XX up. prices the difference on

for you and thanks thank it. for asking John, getting it,

you know but confirm to I don't just about like wanted it, talking I it.

and No, the of look a reality said product And over of the Historically, net couple and can immaterial we our our gallon business. are to because X-year we've per that of is have made on annual results, do RIN $X.XX RINs. back headlines prices RINs beat and RINs. was last supply wholesale to you $X.XX

butane And during average, and that that the benefited. negative generated equivalent bit of of over we $X.XX, rack of to a the was to net we little of so a other per blending $X.XX, margins things due gallon about the we but quarter $X.XX netted on some the and spot RIN,

supply If negative. $X.XX. gate are margin to spot So whether high the or rack of net RINs margin at and price are the refinery it above that sort is And going gate of this to RINs. was net it at like they're our in see is refinery RINs call we're of high, $X.XX quarter,

matter don't RIN we are flat So what environment. The spot in market reality you're that held It on. prices live up. is the equilibrium a is really doesn't

We have volatility.

reflected the accounting rising next of so until benefit environment the the of where price at end And the the book the the month. month isn't into trading

inventory about way, that the back QX, last by equal there. in And in quarter. the variance, a an year was rising the because if price to environment, we're go there negative was worth gains. opposite So $X.XX getting we're you getting it timing and effect accounting That was

it's don't So return environment, balance. falling, is $X.XX the the margin plus about And then going RINs matter. the RIN will quarter, prices to it about on got And The was whether to a to nice explain supply $X.XX. supply this or price product be net other things about rising worth we've points. and $X.XX invested $X.XX, of RINs XX we've worth was in, that and worth the margin XX that some

your and added thanks everyone I else. to So for hope question, clarity that

one perhaps $XXX was big related, this a And working capital quarter, tailwind million. more

what Just wanted some you periods? see there? talk of dynamics through reverse may the future to And in

up. was mostly and pick it I that Yes. payables, let I'll believe Mindy one

balance a up results Sure. the John, what our net of QuickChek you saw with was that we picked transaction.

to or bulk And the no and just And a timing the at the large million payments our quarter payments million explains remainder fuel of couple then comparable year. that payables roughly were due so simply that had $XX payments end the $XXX we at of So in difference. was bulk of end. of located

see on it fuel when day quarter. we it timing just -- quarter-to-quarter. the did there. to week we And what a end depends So difference was during we're towards the It of on quarter depends strictly ends. always the if did It going procure that of the

have balance, ability change speak on a But the things shift no So all those of. of real to around quite bit. that number actually to

Casella is question JPMorgan. Carla with from final have We

locations that or you if the that as some if just you And difference you're about beverage, a maintain integrating follow-ups the business, fuel whether if Can the talk performance? without you number margin that Just get of in on an those locations into And -- ones opportunity? of QuickChek. that's and fuel? in merchandise terms see food versus have

Sure.

the but I quite the And the XXXX. performed to stores sales, roughly that out fuel think well have the have to not same stores of So XXX And about. as merch-only some April it's relative the XX difference merchandise fuel in very we had like seen stores, extent. well, have in

think I stand-alone it's destination, and getting a traffic part some is that of And fuel. just of associated once so with

XXXX well lapping So results. April, not both done in a But have surprise very there.

that than look in into in Great. there fuel, at mix but of any Okay. I business, And -- more you is nonfuel just changing obviously, as thoughts then growing, your fuel? mean other the overall given Murphy getting food, terms adding or of terms

Yes. All fuel. have new the will stores

made believe. back think that on the XXXX, I I was something a leadership in decision QuickChek

stores customers closed were of be new and open, catchment X,XXX a as positioned were stand-alone expect area feet. in QuickChek see, store. that stores square run smaller we in the be the high-performing markets, the that to out about to would be same would Many would store for And would leases a fuel so

And so current store. smaller there than are about X,XXX model square feet the

over and And our number certainly to build of up would are stores, new proposition the nonfuel stores decline quickly stand-alone expect looking driver. our well average. fuel not see you So volumes network our And value important gradually and an part above time. to Murphy. ramping traffic It's that we're overall at

at You it speakers time. back remarks. closing this turn have to questions further I'll for no

challenging your great our for as everyone, you momentum Thank hope business share not lot see in excitement you, great key I support. you a a the only into delivering environment results discussed for thank a Well, QX today. day. we of by around we that and joining Great. QX April Have metrics. as carrying

This today's call. concludes conference

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