Murphy USA (MUSA) 3 Feb 222021 Q4 Earnings call transcript

Thank you for standing by. My name is Sheryl and I will be your conference operator today. At this time, I would like to welcome everyone to the Murphy USA Fourth Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President Relations, Vice your may conference. of Pikul, you Investor begin Christian

Sheryl results. everybody. President Mindy President overview good us. Thank and from Vice and Great. you, Andrew, Financial Chief morning, After Officer; West, as the Officer; of some are President comments and Executive Smith, With usual, an Thanks Controller. Andrew will Chief Clyde, Vice provide and Donnie Mindy financial Executive and me, joining for opening

then and that we open will comments of review considered guidance We as in Please the mind XXXX call forward-looking the in made including defined Act Q&A. XXXX. be the some will to portion, call, our up the will Private Q&A statements Reform during Securities keep this of Litigation

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

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

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

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

position Good win record price our this Christian. low us morning to advantaged joining a and to year model in you, Thank USA was welcome to continues environment. business today. Murphy everyone us and for XXXX everyday

contribution as stores December, lean to This $X.X reflection low-price billion over contribution. of of performance customers to million capture month which record structural our from $XXX of increasingly recovery and ahead Our a tactics. ability believe into slightly margins to and our low-price our in higher QuickChek, share our and fuel transition we quarter retail excluding XXXX where competitive the Murphy noteworthy which merchandise to volumes, positions the period drive led higher margin. We pricing fourth particularly a and intentional COVID and of decisions COVID was model through prices of benefit evident supports and are December twice direct were to inflationary volume to is nearly of take to results

position market categories bottom Our in long-term remain tobacco driving price our other to central and fuel, value. to

First been and foremost, value. built the has brand Murphy USA on

highly to brand of responsibly and challenge seek and our managers As expectations. and associates over-deliver deliver to customers we stewards engaged to value over our reputation, customer store proposition our on versus

income appropriate to in engaged sick keeping commission competitive stores programs our Cost keep our our and efficient, offer we markets and our and demographics, disposable a associates in in store a last, other customers value-conscious position us serving attract help range most Second, certainly in, pay workforce the And pressuring method and pressure, customer will model value. segment estate existing of new With across we low-cost as the who cost front that customers retailers sales. hiring lower rising operate to an customer. evident fuel associates an highly especially where facing priced increased reward incremental acquire where supply the seeking are us of customer merchandise serves low-price is inflation remain environment marketplace and customers. inflation enhanced remain to in further of We've and are Walmart to real loyalty across demand that underserved ensure the best with chain and and we new growing our the well-staffed. serve taking driving positions, in across was expanded actions

ever us discipline in into are in of we mindset some is supporting vigilant our which costs with low-price as our everyday carrying we model. cost as these While XXXX, critical remain

volumes. as wage estate locations, is margin on our of in for our said of where a As cost. well formats competitors, model positioned pay are during to we many benefit inflation adjustments advantage subject more we we are of advantage to us proportionately a cost also fuel our Versus before, disproportionately big further our periods becomes low-cost we've in are lower cash real rent company-owned period and not Because labor-intensive from cost the through higher forced higher inflation. to not most model inflation occupancy to do pass our

capital As both a capital that our operating store flows, shareholders. strong result of to and cash enabling trends, generating growth of prioritizes is new strategy company allocation the these return

Additionally, stores push the is new growth through accelerating to the remain new power working pipeline current sheet optionality environment store free the through how business of and committed is and in positioned hard cash our We raze-and-rebuilds in up the to XX incremental creates earnings supply team best chain the well flow. XXXX. and XX deploy challenges to and balance around given deliver and permitting to

in to We 'XX share come not through just the shareholders have but increasing dividend, and opportunistic to cash free flow. repurchases continue use which to excess highest committed be the returning years our of in to to return excess capital

This our anniversary which the continue the view the potential capital long-term call report levers flexible utilizing generating is forward. of in remain to marks increase. strategy, shareholder schedule very We our and synergy of our I'm value most capture going and are QuickChek of to allocation ahead proud we first continues also will accretive will our confident effectively acquisition

fuel regarding transformation, and through thoughtful the to the of grow. existing both brands of the synergies our continues $X $XX billion As is total of ahead over in time due validated frame, From we made of the our tracking are a year QuickChek. of three perspective, which achieved the a other $X.X fuel same been pricing assets, schedule most has QuickChek see the Murphy our same synergies QuickChek's none approach power leverage opportunities, XXXX, Murphy have in of potential of had right M&A have and business having the record our synergies quality we retail accordingly. better or our Murphy's elasticity that within over internal million future Moreover, for earnings optimizing contribution synergy we our of diligence The embedded primarily pricing confidence scale we targeting footprint acquisition from QuickChek in understanding begun to come and potentials million implementing of principles and network, store-by-store excellence we initiative excitement the future incorporate tactics to which dollars. in demand

carriers. with secure renegotiating Secondarily, in favorable we've more inventory our while contracts terms fuel supply able leveraging to management been technology

leveraging elimination of QuickChek achieved of advisory G&A and processing board the back-office costs, we Additionally, and executive scale have synergies. with through $X million

and early As back-end reverse our and on beverage integration synergies of remain both merchandise assessment messaging, we but communicated direct food growing. weighted the opportunity and in set our is

consumer align This we We to also distinctive have to offer strategic items, leveraging as will brand better well demand identifying now work understand have of inform dynamics, do to shouldn't NTI our helps strengths as will market improvements. preferences the undertaken I'll that will the segments. and within strategy inform and Mindy? opportunities to the we work Murphy body while guidance. continue some right I These our This after importantly, customers what with where review efforts QuickChek generate to hand our brand. the we review within it of Mindy future can work and as in-store help which what and the over to important some financial to exist each should do greatest brand. categories XXXX productivity win

quarter December averaged $XXX.X prior fourth million gasoline versus as the liabilities, Cash representing And expense. prior XX, cash you, current billion on period. fourth Thank debt I'm of prices approximately the in morning, captured to the $X.X X% the taxes, remainder year annum versus the Andrew some to Total XXXX. Retail equivalents as a the lease quarter the December and period are per ago Adjusted balance $X.XX million XXXX of XXXX, million million and of Revenue $XXX.X quarter of before $X.XX through full was gasoline year in of sheet versus in totaled $XX.X respectively, the billion, operating quarter year, of full fourth in paid year. is million $X.XX year or was our versus were review compared which good $XXX the for long-term $XXX.X reduction amortization was per billion was obligations year XX. $XX and gallon and $XX.X they the $XXX the gallon earnings retail in in per adjusted the prices quickly depreciation $X.X items. EBITDA approximately in for as XXXX. in loan million and during and everyone. Average billion interest, for full XXXX. and amortization, going $X.X EBITDA, standard billion, and $X.XX term

Our These figures balance revolving adjusted lenders report a undrawn. X at result and facility our we currently credit X.Xx. ratio of in $XXX to gross that million leverage approximately had outstanding is quarter-end

initiatives. Capital for that QuickChek spend, including $XXX Express of investments million full growth $XXX the IT the revenue-driving $XX annual total stores, including year, both $XXX to with roughly was and across approximately approximately million stores on was for five Turning and $XX capital, $XX other projects, Murphy on including projects. corporate Of enhancements the million million expenditures MDR million infrastructure and fourth other raze-and-rebuild quarter merchandising XX set new remaining QuickChek new the maintenance CapEx. capabilities, were XX $XX million networks million and totaled absorbing critical spend. and combined

in spend which as XX new XXXX as and since of in range construction. of by of, stores year delays have supply issues. level remain currently from completed in and that the pipeline original this program, been we new opportunities in temporarily the year-end can our and of Our billed primarily address over guidance impacted adjusted stores stemming chain will activity execute under early new build Despite Andrew into our total XXXX XXXX much in and two is was guidance, does other are below

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

Mindy. Thanks,

context of and forecast. against organic growth. insight Starting our guidance close with I'll with a our Let's 'XX 'XX performance then some provide metrics review and around

originally new July we we adjusted between XX added the Mindy new guided five and range our XX and both As QuickChek and of our in in stores This raze-and-rebuilds. and included reported stores range guided and XXXX that raze-and-rebuilds. that stores XX was XX level below noted, XX

of shortfall XX one three and of along higher-than-normal stores was As Since underway, and are the new beginning QuickChek new the in raze-and-rebuild placed permitting in with service resulted Express and in have largely store activity construction Murphy January. to two store delays been has attributable but noted, that new year, a already the level in projects.

have already XX program, to program. build are hurdles QuickChek XX up the targeting and in seven prioritized XXXX to we NTI which backfill been Given locations including start our up our chain strong stores, to supply to raze-and-rebuilds and permitting ongoing new

Our stores, real the to to projects estate raze-and-rebuild team XX over new build few this up to to and between to along next with and capacity of XX organization return the level and support expect annually activity we has years. class XX

XXXX fell gallons volumes fuel guidance fuel range stronger margins XXX,XXX to fuel robust of our of Delta Moving contribution; Omicron recovery, to year-over-year dollars. contributed to XXX,XXX hold XXX,XXX full contribution adjusted as store short a per gallons continue on back to the although month average and variants of

in ahead gallons gallons basis. between roughly increase XXX,XXX we volumes X% fuel to or XXXX, month per a on X% store expect to Looking XXX,XXX and currently

our margin to the within X% tobacco second to for fees or increases increase in month the of million and in expenses contribution, $XXX guided $XX,XXX in rent our at by store our continue range merchandise $XX,XXX adjusted guided a APSM. wage in range. growth half $XX,XXX food attributable and and of range which $XXX APSM experienced at We primarily and growth range supplemented This is contribution payment to guided merchandise categories, between of onetime XXXX nontobacco was pressures plan in year in that an $XX,XXX of average store Looking and of above above XXXX contribution. we profitability; XXXX, to to between X%. million just delivered growing $XXX in of million our and continued due came per excluding $XX,XXX original items to Operating inflationary in beverage

like $XX,XXX up a or $XX,XXX of feel positioned well potential for to a challenges well we basis XXXX, into month are and range disruptions store Given businesses relatively prudently forecasting wider that X.X% together trends, materially ongoing higher heading are yet a USA. labor market and on as chain like between these per cost the we regulations supply on Murphy effectively impose given as increase future could

whereas QuickChek, impact. XXXX XX our As included expected metrics XXXX a months year the reminder, full only results of guidance reflect

comparisons. when Just year-over-year something to keep in at mind looking

bit capabilities range on expect $XXX primarily ended In rate investments we was costs, XXXX, $XXX our that spend and $XXX of capital to million support enable For and general we the our our as critical XXXX, Last to in initiatives. effective to below up XXXX, of processes total within a people delays we $XXX strategic a already $XXX our range new guided between to range $XXX expense administrative million of expect of million, $XXX In within and remain XX%. million continue to XX% to for million to range discussed. higher allocation our guided million, to XXXX million corporate due tax million. move $XXX make and

The in a for XX this five million. locations. majority activity stores, accelerate of QuickChek current approximately growth, with store Given million activity, as is earmarked to million and $XXX we $XXX expect $XXX million our to seven we of including be raze-and-rebuild to to capital up to range $XXX spending new new total

We of $XX range corporate expect maintenance strategic and capital for and $XX million a to million investments between initiatives. $XX million technology other million ongoing $XX for to

using $XXX plus EBITDA this At level a higher fulfills repurchase. yet and billion margin growth, prudently incremental gallon continues see we fell of share XXXX. potential since wrap intentional around higher minus but past, on helped for a current EBITDA greater $X continue primarily typically to at XXXX of per dividend volatile provided guidance conversation a capital our up planning would store upside an the I call an the the allocation ranges area about since believe benefits structurally midpoint intent we variability conservative having conservative comments, announced $X.XX conversations rather less have to just become estimates look operator, are shifting million. investors, sell-side has specific decision our planning quarterly XXXX to buy-side a In the gallon, ready valuation. of discontinue assumption. the of the have to program can From the we more clear margins this This capital Q&A. structurally focus the would lay aside, per margin of better just in want share business to internal a and the terms the repurchase in we in continued $X.XX to supplemented range internal margin If allocate higher which outcome earnings year investors moves our environment. margin stress or this gallon, in generate As fuel continue to practice we $X.XX than which discussions suggests the our sight level we higher but for tested outcome could from a of open expect modeling single and in how We to investors in investor given perspective, And that of the see assumption. a spinoff. long-term XXXX our the fuel remind helped of our conversations objectives our marker $X.XX performance choice prepared To was with we do to the and to that, groundwork elevated our Those short-term generally we informed be expect business up upside of trends and investors with see as with fuel business productive within our EBITDA line guidance and certainly provides recently assist trends, a that I earnings. they of

Thank you.

from The question Please go is of Stephens. ahead. Ben Bienvenu first

open. Your line is

your related consumer. to is question first my So

I end stimulus cycle elements think here we've lot the of all we consumer as seen on And a this we year. lower past some year inflation. of broad-based focus today, last the of there's that across life saw really

what potential existing or think relative You When versus in share existing by consumers you incremental a from you you you relative the your of these in the environment. higher consumption to we point, share like environment might take your do finer think an is? response consumers down the as in stores market see that gainer about reduced market consumers talked what about net positioning prices then the this by your that environment in are a just in your today And this, stores in as the market? seeing trade

when you Sure. our able Ben, you I a expect, same customers it and it's of a things hard. rising data we of we versus you macro analysis prices fall that was In doing we're But type to the a pick what a than, only apart to got really gallon, $X prices deeper existing view and really gas and saw to with approach lot in buying that customers, you're try elasticity think when we Murphy insights, to XXXX. period, et patterns, new off. there's say, that if $X kind a $X.XX the Drive variance until might saw get Rewards demand experienced gain cetera, XXXX prior of about gallon

So to trade a getting sensitive. the think That Premium still you go their way brands those the absolutely start makes seeing like you as demand lower-priced really down, customers before mid-grade there's there's for other is a cents, above low-priced a find wouldn't but out also I said, shift that out more customers that point Murphy $X.XX, the flock room customers start brands regular is there. when And gallon, and and difference. price a go you customers of more that become $X.XX first to see few $X macro impacted.

When When Drive Certainly, dynamic. fill down. our up that we see So some is XX look go about customers, far they fewer as how XX or Murphy gallons. think go expect what take buying at down rates say, data, and can we X% share they're see trying gallons. to you $XX XX%, doing our $XX gallons things. They're to to Rewards they're we to continue part interesting they're of on to at

the and but one think that's change that and was the noticed lot to is the last year I more quarter in they're nontobacco of recovery have they people a is same really I over attached So nice left amount things making of And trips. that transactions. have that of the the fuel hope

would net take so a expect And we see from you when together, this it. all to I think of benefit

Our essential need to the work. their They're going customers going of They're positioned they buy. get go find most that products to to to value. still still best and be give them that way to buying we're have to out value to

that think of Okay, I 'XX, business My margin what fuel gave what look kind very second oil question you might remind million Can revisiting XXXX guys us you guidance outlook assumed EBITDA EBITDA into like. in in and March helpful. margin $XXX and is of around guidance? some was fuel -- the

Certainly.

So like where that before about, But year used that margin the look well, to period. back figure seemed I talking in normal have $X.XX one level. I that exact to spin. and some gallon. sustain of us return the you we in we we remember give world will the 'XX, And has since margins structurally that were were then expectation you coated a Christian all stretch still the changed. per -- was given mean we might certainly we to XXXX, can certainly

we're the a a seeing pricing We're higher seen so we're sustained our market higher levels. by volume that. much seeing ability lower we've level volume the capture and residual the recover margin pass-through And the structural that to in but seeing

level been downside that then. XXXX to that can think that as $XXX volumes. purposes, I we But at for in $X.XX $X.XX planning $X.XX, been past, upside any plus gradually noted seeing or that $XXX at minus EBITDA minus million on back marker we looking have million the was what more plus our doing. or higher $X.XX might we're for in would number we getting in get at in stress and We're the probably past, than assumption testing we're the marker have we probably at And so conservative

Okay, great. much. you so Thank

of next Sachs. Goldman Your go your ahead, is line open. from question Herzog Please is Bonnie

thank All you? right, are Andrew, you. Hi how

Bonnie. morning, Good Good.

I maybe Good just to do morning. about your perspective, might curious this you purposes you to hear I thinking stay know guess, fuel guess think we've actually for context $X.XX you're recent seeing the ultimately guess versus what that seen the called elevated but I'd assume that about But per of I wanted how performance? historical with I for cost should we conservative rising the margins sharing your from only. I'm ask be your out. be? we're margins that I realistic down, gallon environment, highs from fuel modeling the or step

able then headwinds given of price a the competitive to are of one terms going especially forward, dynamics, our mean, calls I to cost what challenge to think sustain which the the to and where effectively through the might we got think credit about is to should we a retain ourselves, give we Look, being on think a we from happen do volume to to to structurally where that what simple you that larger of $X.XX, forward we've given breakeven we Sure. historic we came in fees full are higher as quartile lot serve, up amount from high I be higher biggest would that $X.XX. the was significantly the rising to we at market, just say, gallon marginal pass with seen from to that just and walk $X.XX look going if ask that, and environment I And especially a $X.XX prices. some what to we And I walk said, but assumptions, you the how player these card third everybody. are the used able in a it hey, look QuickChek next need you using, their structural benefits do, higher-margin margin residual. and ourselves

$X.XX. through there's is that and two much look a at to I needs think We higher not as $X.XX probably our to market But get repurchase if plans. a allocation that's to, a capital last got you sure make to the we line our growth, want that to as we're sight prudent share our $X.XX a to evidence plan board, because dividend, number lot has it priorities, passing another we've and around. years, a that the so company, able of to our retain to level as very marker, of And

And this so a prudent use. number marker the But why very I've months past, conservative probably last minus investor we than noted that's meetings always few the a that is there's to in over a like where in plus as kind that more looked of downside $X.XX. upside at to or

then, Okay. guess will the see No, to question... certainly be that's plays helpful. And And how second interesting out. year my it I

of rising all seen saw of things throughout One December we've prices only that in we but XXXX. the

think fall And that mind we we of in steep rising out saw achieved where I so level equaled price else of keep off. the in that's to margin something XXXX primarily environment, a

going that are know go, don't have prices going to at where they'll further some higher, right? oil just keep if to I means So And they fall. point,

more volatile that areas so the And in high upside structurally period in there's price the some future in for future. environment, in margin

it's is the volatility key and good Yes, point there. a

program. focusing And then up is interesting. at guide my about be will and billion the buyback is got growth. aggressive then $X certainly I you're time, you've thinking second that But the same Andrew, guess So CapEx question on this which

right that all M&A Are the on appetite think of and continuing M&A? still QuickChek. do integrate future more in context exploring about now cash of it you you've your it's or further think we for and had should you maybe free guys seems QuickChek success the given especially to or with flow -- focusing that still how So open

Yes.

around we've build a the try food a we such a we for better we've and try buy about when And can leverage building. fail So do such the of acquire brand it capability, insights than And and it. all but capability would that seen lot we to unique we seen that take and asset, acquisition. made felt QuickChek that companies we'll to was was decades to the a succeed positioning back go of try and beverage It others know-how, capability that. future. messaging do be How to couple and strong a

And deal of acquisition. the the people fluent. by that And the prepared in and real We last do saw transactions you're year. like something Certainly, that been absolutely was lot purpose you of flow surprise, we've that deal a but so after in had nothing that as that. catch close the we we in something earnings did quality the noted capability said, remarks, that to learn we leverage potential really nor "Wow, of could came QuickChek see earnings, that the of a assets, the we from and

here And offering, One that didn't of of could which brand some to regional the their well, formats. it noted leverage capability, maybe for things frankly, the quality see or anything was. we was and QuickChek other we that, midsize change we all above the brands those

about would we're while else so -- acquisition we've strategic that with nothing And look, going a a never seen a QuickChek just say never very focused And was purpose. to I reemphasize on out to from feel trying a asset close on something to capability different standpoint. a that good that there that looks comparable anything capability really we of standpoint leverage or quality or from

area future capital So for is a not allocation. M&A target

growth. And so really our permitting we're frustrating. focused on The process organic been has

got You've that short-staffed, that delays local even process. DOT that a for periods remain offices and of lot just closed

to getting XX look to had that to talked we NTI we forward up And range that about. so XX

look more candidates. attractive in than or Fortunately, -- they mean, portfolio environment, current ago. three NTI they even we've future got years And candidate raze-and-rebuild I great the two of sorry, did a

do higher-performing focus able we're So, raising to rebuilds that to from few than that announced for repurchase our kiosks higher do certainly, a small-format we have typically would I announce. think that some of additional it's a to year we've see to towards our line range sight nice be sooner and And if or we where frame EBITDA time clear convert to $X.XX program. structurally we that and years marker I that the margin even hope go $X.XX going shift next or folks the share margin for those year, And to noticed gave. those one the completing just of we of good performing with investors newly every history stores. a CapEx And within ability given

I Super Okay, appreciate that. helpful.

Thanks.

Instructions] go from JPMorgan. ahead. [Operator is question Royall of John Your next Please

line Your open. is

thanks for entire quarterly the year four-third Hey my beat. of taking Congrats on guys, question.

So really impressive.

appreciate I and update sounds on encouraging QuickChek far. the really So synergies so the

million said then of end $X bump there a target expect to a at you this may little And the be it kind big of backing million thoughts the on what need I Is see where great. any just now. you be early chunk a think little? would to there I to a point. year? you're be number to would But that of is up why $XX know at understand by you wait

not announce think have That ready our we to lined something I beginning will be group. year forthcoming that We're will two be up numbers. the in investor Sure. which March in conferences

more are what business, what help versus fulsome really good at doing is this just something So QuickChek to time. we're we'll that it number it talked for update that taking raise the a about. we've have making doing business effectively USA on and recognize better. business At the is the we largely Murphy does what a that Look, point $XX million, for

transformation it probably think business thinking growth cadence the continuous part opportunities, we're that's now. year. through about And earnings right parcel thoughtful and Going improvement that how the approach, to every I identifying making

promotion, improvement, talk nature different range of end making we you'll the -- year, strong just at together. start to delivery more continuous in is from that and a we're saying up they what the XX bump the but than really I'm to I from combining productivity pricing, this of businesses number hearing opportunity us rather two going get about think hey, hear loyalty, it improvement, So additional

the we year spin. be of the our of the the characteristics it So didn't that that, and I lot some think did just that there's to hope of that into future whether to that's at same spin we But business hope I that opportunities business to did you business build a helpful. it our same the time see at additional call or But at synergy time, guidance. going just the another we applying same mindset share can hey, that

bit call flowing into think some growth. long what it's a as it point, earnings little at I less as you it relevant, becomes through

a helpful. driving a for I'm merchant really [ph] you number it a what could And XQ was talk same-store mix up you some That's about bit margin perspective big is the wondering pretty can from non-baccar see little categories just And are number. for there? then, margin that?

This non-tobacco on is growth... the

Yes.

think same-store on had the I growth margin. XX% like back you on

Yes.

snack category saw really candy And come the delivered big there, then promotion what of So beverage, there really, really in component in October. massive attached packaged is strong. we that And just were was the on the we to John. drivers it to back over the fuel

early that recovered weakest the engaged nicely, you COVID. engaged XXXX area promotional with attached the our and back in was QX in also fuel was that saw in so the those really which And staff 'XX customer. come along as But but in activity an categories our increase

a a when that was constant as team higher we note in I'd a December only is, thing number the year October, that higher had worth than one talking is on number November we're than remember I a can't APSM was think full like, basis. the I

So, Year. nice into sequential New quarter the a through we're acceleration the seeing

was categories lag we January in and there feel a that attached about some we see think really I last But good that to stuff burnout shined that year. we the in good the weather holidays feel and really QX. of little saw about really we versus in February fuel

Thanks very much.

your of go James. Griffin from Raymond Your Bobby ahead, line next open. question Please comes is

back smaller Good But of the place, different environment your bigger -- operators And couple just you structure taking gaps even would is I advantage you. able of and out bit we price their when do this a bit. your prices stable maybe you they're your everybody. highlight seeing this Andrew, on the guess, that cost have to are gap Thank a look a to are to little peers come price stay for environment? little having different questions or start a -- kind raise that's for at fuel you angle. why in of actually first which price want morning, you I and gaps

become our environment. cetera, by differentiated whether all market in to more tobacco, et a pricing it's science type of we in fuel going generally, not Yes. Look, there's because we're one But store-by-store our or market. pricing, fits this do

in And But the of widening differential pressed elastic to that's and signal that that pick the right additional notion a lot gap the and more widening the of is be want margin. we everyday of that environment, on going to are That's creates value. close this function staying average. which price, be up So now. differentials absolutely a customers reduce could last doors that two sending the inflation right? the key $X.XX you low Even and or

of or be value it times. some it's So of maintaining the these is really our that focus additional during to to is And reputation and when cemented going customers. gets increasing in our our the brand This pass it on customer. to eyes

$X.XX, the then That's all-in Absolutely. kind you performance, the quarters, terms first the margin lot $X.XX last does has margins have it or monthly a to in numbers. than When around levels kind of stable, also more historical of month? versus month look today your you when from lot of look basically been stable fuel helpful. historical is like over to a And incredibly historical at three in been round bounce monthly

but prices seeing it's probably Bobby, a just It's more little because continuously. probably rise stable we're

certainly and mean retail -- price I you right? volume fourth okay, have in fall at the OPEC the happened are I June, then prices little what in break if typically is XXXX one fall most look have, the rising or an $X.XX used then going less I like Are of and than always season they in in the to think going QX, a driving mean, a in summer the looking you they And off environment at going we'd would pretty in so or of fall of year. rise got We about you quarter. if think December. then did price May and where than low to announcement we we of a off. to late good in see higher were in XXXX. margins, I prices got see fall history, And And less bit rising prices kind mean, the fall margins. year, in to with maybe changeover maybe we're some then, April. XX% But

And my prices Bodas know was so price that described hit the in helpful the around think peak we we're the guess don't is and equilibrium the to that's I fact, some would even way and the be at going are crude. to a price some falling margins get supply quarterly structural yes, we're pick in there and volume. going check. environment. better and where in be see to gas banca point, it We'll month-to-month and the -- of main patterns of environment demand I reason like, would a at more companies and that's or capital. when there'll some margins bottom quarter-to-quarter ability we're with see and demand of back geopolitical stable. consistent seeing be to new anyone's some achieve It's but it I point, the more going sure in period supply but globally past. oil if historically, And kind month-to-month up more. you to bit to more for same comment I'm -- price think up I to a characterizing cause will see And signals a have higher point, And go We'll deploy some at little quarter-to-quarter will

it's So, year the accomplished given we I even the nature what price last impressive think structure. of

kind a has why of performance in for incredibly that's mean the the in and been -- solid. have whole Yes, year were and margins environment I that rising been impressive the we rock

I for in Obviously, Paris. And category. of tobacco the very on me guess, digging into. what just that's base I kind was So lastly

type So think are then buying kind starting during to stuff, cartons behavior basis where But a -- of normal more are of as back we're about see it people the and like the going year that some you two passed on well. the more and back through that of come pandemic single from precoded category terms of was to go stuff category and as starting like to getting behave down behaving industry in an the and maybe back pricing perspective? stuff units packs on in

Yes.

more going what normal that's gain here's to cigarette say. I think saying see as is with And able to the year So look We I didn't a really kind result. flattish to trends, hold and pain back what even the -- is as would the two right numbers starts stack in at. the volume we've thing share certainly of so, QX, been

during differences when say you're standpoint, are not you're loading social of and probably about I'd early that the two and a you that saw standpoint -- to seeing the work that from think big level not lockdown So the seeing you COVID same return pantry consumption period. -- the the

customers better at we to loaded cartons, and kept carton consumers elevated discounts And see rewards, multipack get pantry to period cetera continuing USA, are was We business. benefits, Murphy we've drive other and Murphy those I a demonstrated think sales. et the on value they gained what of during their some

smokeless QX, was in know also nicely. up We

poly-use go may consumers that non-combustible choose but a where probably of environment a of habits to they some they product to. some of smoke in not the so And reflects return-to-work may

growth as kind as as category even on migrate well still kind contribution on levels, we're normal industry margin standpoint, the of from products. returns bullish board innovation to bullish risk to So also across customers of a lower the the the

Thank you. Congrats, again.

you. Thank

Andrew further will at are I remarks. questions closing call the There time. no to this Clyde over for turn

Great.

and So up Ben, in to our Investor the your bar we to in question, kind over raise used slide $X.XX an Day, period. that get ramped $X.XX just back to started of that the we've

average. little over in million a would gallon $XXX be the example that $X.XX so And per

So you take period. over that that see walk place

to the capture to from residual given the contribution organic look, obviously, given that can be the the structural a quite ability margin that, we're four So the currently higher and outlook, next year five bit growth doing. than

So question. that that addresses I follow-up hope

we'll continue to week shareholder environment since and going we're questions in We're forward for to that that look calls everyone, today. future achieved the very and questions and that to our those capabilities we've but generate we've in. regardless business to leverage be that this continue thanks Thank confident are value follow-up you XXXX the the ourselves and of to of comments Take again, operating -- and So later find any achieve able to excited care. kind spin your the we next. us and built has results allowed to in about XXXX

concludes for your conference This call. today's Thank participation. you

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