Murphy USA (MUSA) 2 Feb 232022 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Murphy USA Fourth Quarter 2022 Earnings Conference Call. All lines have been placed on to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. Instructions] [Operator

is Christian to ahead. Pikul. It over today’s my Mr. to Sir, now you. turn pleasure call Thank please go

Thank President Chief morning, Andrew Good Chief Financial Executive you, me Donnie and Hey. are Smith, and today Vice Vice everyone. President Clyde, Controller. Officer; Executive With and Officer; Mindy and West, President Brent.

comments overview some from to a guidance, Mindy annual opening our of XXXX After then will comments After we Q&A. results. provide Andrew, from of an open discussion few call financial Andrew, closing including a the the will up

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

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

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

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

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

Andrew. over that, With call will to turn I the

we the business. over key company’s really past lot results XXXX. have the improvements last spin morning in we Christian. was elements of Good so established performance create how and decade, many XXXX and our executing made welcome In hard to to business since the advantaged outstanding you, These sustainable results a the year’s reflect of reviewing us to preparing a strategies Thank of call, by joining for everyone and against a the struck work I this the reflected today. spin

store productivity, We organic per improving optimizing network store adding since to cost merchandise improved XXX over the stores growth, contribution. while prioritized We XXXX.

employee engagement retailer especially addition our In substantially satisfaction. any reducing proud to customer be and metric, we of. A enhanced trifecta, fuel breakeven would

already broader industry supply advantage the on These curve, industry actions for increased position while relative rose. as further costs improved our our the low-cost

leveraged infrastructure our lower also supply capabilities our retail and contribution our and our assets excellence fuel through We fuel campaign. dollars to maximize cost pricing

format and Other significant with introducing advantage customers capability and while investments core further consumers significantly food our advantaged capabilities, offer, our differentiated acquisition on and Murphy growth. Rewards while the heightened beverage like for Drive merchandise QuickChek our enhanced new a positioning

statistic disciplined our telling the allocation. to most commitment capital reflects Perhaps

of we with our shares and repurchased strategy grown As outstanding. a steady opportunistic growth, showcasing more result of balanced have share and consistent our repurchase, by count nearly allocation store XX-XX XX% our capital original XX% than a unit

for achievements milestone long-term of these investors. significant shareholder We are value proud our created that

These investments, the our for focus company’s operational outstanding with lay on groundwork results. coupled relentless the excellence XXXX helped

market PS&W market XXXX fuel overall share. just supply per Importantly, gain volumes store advantage, and scale leveraged our a including We wasn’t tight grow margins. from the benefits to performance and about in cost

to leveraged to non-tobacco which, Rewards also that also with We along continued Murphy fuel grow categories. helped led share Drive outperformance to tobacco traffic, generate stronger gains,

as XX% XXXX, beverage to by transitions the excellent legacy by that contribution million our and progress initiatives from extracted Murphy focus contribution making combined enterprise-wide the further food $X on in QuickChek, internal will grew benefit We million. growing nearly synergies $X integration network. We our

we the been future are equally pleased both opportunities excited with performance about We have QuickChek’s brands. across see and very

our we pressures are to certainly cost us afforded format cost Looking up engagement, our program and customer the at and which substantial industry, we OpEx, leading merchandise impacting inflationary the immune low allocate incentives and out to our helped wider costs the and XXXX to COVID store financially satisfaction. reward of to in advantaged strong took opportunity structure. employee sales in employees level without This position the permanently resulted and higher on programs drive business not while appreciation

closing and operational financial intentional taken product out it’s us XXXX performance of clear discussion, that a we the management to In as the results our team. were actions have

provided improve Our right most relentless time, efforts team capabilities the extract the have place the right at the to with the value the the positioned business opportunity at in the right with to right in us market XXXX. place, from and

affordability also well to more more when the USA Murphy positioned matters very people, time a is At for future.

investments prepare Looking to in making continue results company out and better that decade, XXXX compete delivering and the to believe beyond. win are the poised over we we next and

markets. are we strong preparing building better and stores growth, for First, more store new

program the Looking in company. XXX and anticipate future we efforts addition our at high-performing earnings to material another the through raze-and-rebuild years, to plan providing stores, least investments. the current would of at That network improve in ongoing other network contributions the XX is to potential

productivity, price on the an same-store aspects efficiency remain increasing our will strategy. maintaining structure, low we improving of everyday cost all and supports Second, focused which business ultra-low across

embarking comprehensive of advantage competitive ultimately new that set investments are our will on in industry. the we widen Third, and a help extend

offers trigger The impactful customize first leveraging opportunities. of evolve digital point-of-sale these effectiveness scale the shopping of upselling our more platform, Drive help to customer and Murphy transformation Rewards at and reach will loyalty habits

at data transaction inform and will local the to level. pricing In optimization assortment opportunities, store customer-facing and addition help

campaign. few a increase These will and customers. These learnings to and from redesign what brand deliver capabilities the attract a Program we just look digital Loyalty new to examples of of awareness are QuickChek early inform transformation our

the a comprehensive stores, QuickChek’s food Another critical analysis research, and Murphy consumer new from inside and and of beverage of subcategory expertise campaign performance. involves redesign insights leveraging new existing of in-store experience

routine product breadth for and in-store the category that resets, sales. represents a effort the goes beyond higher will experience of different and This customer fundamentally better drive our offerings accessibility showcase resets our

Store store and of the over which we turn, the will new design learnings these combined decade. we full take Future, imagination next our In of will the returns in performance expect synergies and of advantage and enhance

muscles office initiatives and these beyond we as and but and with data involve technology the analysis. sets investments capital build people investments, in data go science and home in new new skills experience Importantly,

Like tangible campaigns, in XXXX investments prior benefits success breakeven in pricing deliver But new we we from these overnight. our significant benefits the coming planted from Similarly, as and results, retail wasn’t realized years. MDR, as our realized such seen years. we capability-building seeds expect investments the to have prior achieved tangible zero were

in growth mind, completed including in strategy, me notable stores raze-and-rebuilds, stores XXXX, of organic XX guidance. to QuickChek completed context through two you our we XX of our XXXX. the new XX the the with take that and centerpiece stores opened With in which of compared a remains Starting elements XXXX let a growth, total new improvement

short additions of and stores enter XXXX with in of open to our the internal able store nine new new a we XX were target quarter. stores, to backfill While fell scheduled raze-and-rebuilds first more few with

into Nonetheless, Putting that sourcing of locations in maintain new remains XXXX. delays electric we permanent a and hooking to eclipse to from robust of new stores service inventory concrete activity power. XXXX challenging up panels and to local high-quality expect store

additions to such, As remains up XX to raze-and-rebuilds. guidance XX and new store up our

XXXX with proposition per attracted stores. average in fuel price our guidance, under are of the our APSM, line everyday customers value the just representing to on month high as low XXXX contribution, report volumes more XXX,XXX fuel growth end store we Moving to pleased versus were X%

expect came we do share same forecast, XXXX, expecting our stores don’t once are Looking year eight to to in of in in for the gains our level given customers to drop ahead, looking the not that we but six value. on many expect of mega-price to a new we every market years hold

result, month volume XXX,XXX in month between slightly XXXX. As per store we range XXX,XXX tighter are per guidance gallons a store gallons forecasting a and of

performance fuel profitability. million Looking of from customer benefited from events million tobacco margin merchandise at of guided and We in promotional delivered highly store XXXX, to the above due categories attached to category. a higher impactful in $XXX the million that $XXX traffic to $XXX range strong

to and and share or in food to of $XXX we initiatives, between merchandise primarily at growth and beverage X% attributable and in is increase XXXX, growth million dollars range continued the to non-tobacco categories. for an take midpoint. continue $XXX expect In This a million driving the growth merchandising contribution to about deliver increases

within impact the of the expenses, Operating came at APSM XXXX supplemental in in included range XX,XXX WayPay rent summer guided adjusted of which program fees our and employees payment our XXXX. we excluding over APSM, XX.X% our incentive to XX.X% provided of

and While are increases growth all the factors persist XXXX, XXXX nature, cost stickier into many labor year’s service cost OpEx inflation, which including base. not our structural last are will of of built into in in impacting

per the card operating store fees a not implemented As of range a assume program increase special excluding XX,XXX on basis. we to repeat result, a or X.X% of forecast expect expenses, This rent incentive XX,XXX a and credit does in to month we in XXXX. X.X%

adjusted general range $XXX expense Murphy the the million, $XX and within was million USA guided million $XXX Foundation For $XXX administrative for to contribution corporate of cost, the million. Charitable to

aforementioned $XXX benefits Murphy and a experience, people and the XXXX guidance of the and extend into fold as reflects digital deeper package to retirement richer organization investments costs higher into in-store $XXX programs to around sunset in million addition retirement USA. transformation of technology million in planned we QuickChek to them

upfront business, marketplace our improved early over launching these Rewards, for our investments the in which next from benefits laid Similar with advantaged and model the Murphy monetizing the long-term are advantage significant the and decade. Drive maintaining to costs, further but of critical our they significantly to the developing merchandising groundwork come new stages performance competitive of

capital Mindy? of the the of hand will our the with component I time, review this over At portion normal to to results. guidance, allocation financial Mindy cover along it of our

quarter you, $XXX IT million, was for $XXX with the million primarily year projects guided and of to at also certain and and CapEx, $XXX and new and the range store respectively, low I improvement the fourth good of timing to begin everyone. morning, end Thank which full delays will initiatives. the ongoing around $XX million due adjusted million, Andrew,

new level Looking in a to with million store total into range in expected raze-and-rebuild to of $XXX million. coupled a some $XXX campaigns, higher investments be and of we transformational expect activities, XXXX, given spending of our

to results. billion $X.X billion, respectively, in year to full fourth $XX.X and period. year and Turning Revenue ago the quarter was billion the for $X.X and billion financial compared XXXX $XX.X

respectively, million year compared EBITDA and $XXX period. for and billion, to the million $X.X million $XXX was the in year quarter full of ago fourth $XXX XXXX

resulting in per was the per the share $XXX.X in income $X.XX versus year and $XXX.X million million earnings $XXX and for Net full income ago the Net period. for year reported year $XX.XX and versus the share $X.XX versus share in period. respectively, million million $XXX quarter, $XX.XX, XXXX, per ago of in earnings

year full quarter and averaged $X.XX in gallon in quarter $XXX $X.XX fourth were XXXX Average for prices the fourth per gallon versus the XXXX. retail the XXXX of in in gasoline $X.XX and per

the of within for The to and quarter tax year, XX.X% purposes, forecasting rate a effective fourth and guidance $X.XX for $X.XX. our range was for XX.X% remains the XXXX full

earnings release, which As year-end. at mentioned cash in we repurchased and in left million worth $XXX quarter, equivalents the $XX us with fourth of million cash of the shares

the with to rates be in cash days, may of are have the $X.X categories, under past bonds, million if in You help move given interest balances investments, corporate current $XX.X us and return of rate securities that of and excess one can which securities two which over collectively a year. day marketable T-bills reflects cash marketable in higher earn million the of noticed two needed. balance comprised to converted sheet to of upward non-current high-quality course, These any new assets assets, long-term

annum of current on in as are captured approximately debt in sheet the $X.X balance paid liabilities, approximately is representing of of long-term December the obligations term Total lease a per they loan million operating amortization expense. $XX at our remained XX, and which remainder the XXXX, through X% is as billion, reduction

year a approximately at leverage gross had our that These X.X Our and undrawn -- adjusted and lenders remain figures end million undrawn facility credit result we of times. in ratio remains $XXX revolving currently. zero to balance report

it turn Andrew. to with will back I And that, over

that business. away investors and and decision to Mindy. of do of short-term this In fuel investor true performance the conversation drivers our was fuel has investors time. believe impact margin rationale valuation closing, helped conversations consequently We our This to the to the about to shifting refocus XXXX. the discontinue choice over I from margins potential EBITDA better of informed the intent guidance since remind become Thanks, want our emphasize behind outcome long-term

primarily have suggests with EBITDA we Nevertheless, assist an investors, sell-side typically our guidance specific a fuel modeling, to with a for EBITDA supplemented buy-side assumption. outcome and single at margin which marker

midpoint, ends book of to $X.XX prior the swing a of that margin $X.XX per historical of a is annual opted with gallon representative XXXX. margins per we the of or provide year, around have range This volatility range the gallon which business representing and to about the $X.XX

on reference million discussed and a outcome $X.XX modeling $XXX margins adjusted and only avoid in billion, for metrics we that forecasts, point using To approximate and EBITDA. single fuel purposes respectively, of from emphasis to midpoint zeroing the these attaching guidance $X should of all-in consideration elicits investors and $X.XX disproportional the the undue official

a you and appreciate I and either. supply other volatility, of crystal shift behave of how actual and shape commodities. that is different of price those generate for how the and number the along function competitors year demand, supply-demand determinant much The events curve, with not a forecasted do the and impact environments, magnitude calendar relevant the the in volume we amplitude which restrict of a geopolitical externalities have balances ball, margin biggest the in curve, don’t any given we of measure factors,

noted, and price have of competitors basis, influencing a last we daily the year’s responded. how likely curve magnitude volatility on significant change as costs As input dramatically opportunities created

ball level environment. high reflect XXXX we in a a confidence and looking do need we perform to in we they crystal are have the different January going at and how of that with, expect what price is do we environments Where presented would a rising results, are not

and a increase environment have share. which volumes about in difficult gallon We margins retail depressed typically per seen results prices capture grow mid-December, since $X.XX to in more

before interpreted typical environment investors, benefits volumes you prices versus of X% prior disappointing up January year I may only the to per retail neighborhood of we January be as gallon about kind in and see adding tell rise. in this can While were were the PS&W margins $X.XX when

January XXXX total As year a to XXXX, of we to a integrated turned all running looks contribution out kind ahead be. know result, and be of

essential short, over In business, months off our go. generated over carrying starting built the and is we XXXX feel are across momentum We the how decade. from past XX to about the the there are realized great still in we advantages year

the With to that, up Operator, open questions. call let’s

Your comes line with Goldman [Operator Bonnie Sachs. first the Herzog of Instructions] question from

open. is line Your

Andrew, year year. last question, that you Hi, OpEx everyone. Thank I a and first your maybe had you is what lower increase you. you guess, I station expect a my I I guidance. mean, on this than think -- reported highlighted

peaks marginal at the pressures now? to cost to I that such margins Is start pressures bit could Is that as for walk heard So, is? regarding be first, impacting I key start a just maybe right then and not possibly it how may -- us some is pump, marginal operator squeeze or these puts industry? that inflation and give that the want which possible this of a to to you make through ease players guess, high so fuel it correctly. it of smaller the price this? breakeven is And sure could you sense for forced dynamic I margins, the takes And then could especially

Sure.

start yeah, OpEx. let’s with So,

things the at and that building a transformational at bigger QuickChek XX XX both is to are then of One doing USA, year. we stores Murphy rebuilding plus most raising and and stores,

even And more so building stores drivers the cost very attractive higher labor merchandise have have contribution, big the fuel we attractive current one the is fact that of a environment. component of returns, that volumes, are higher that in bigger

big that drivers one is there. the So of

summer, more higher allowed labor over competitive into competition, and increases, staff to many The didn’t et more. sell or bonus noted, build component, cetera, we WayPay structure that permanently appreciation had our earn cost but the other our as we salary hourly with the

a changes our the QuickChek that in benefit the extending into are as we transition G&A. those that’s acquisition organization deeper is, of standpoint from us of consolidate IRS has some One period plans with the and

favorable With contracts. respect to other costs, we some certainly had

Some areas some make et might deflation, XXXX If be versus may of be there’s so those be in are it expenses. will like portion bags, smaller pressure of XXXX cetera, those a there of in consumed up renewing the hydrocarbons but upward garbage and area one typically where there.

industry, margins your peaking, year-over-year forecasting that I the there don’t of the inflation, breakeven this marginal out but What I anyone are think is to going is, and for player for rate really the for is us. see think we does point impact -- How ultimately change deflation.

to going go year-over-year not negative. changes are see We

I would get think we those be to X%. changes to happy X% the see down to

rate We have a go of way get to X%. long the Fed’s down target to to just it

increases do easing, are two-year, a going year. three-year, smaller of significant have are just want So the starting prior you four-year from some pressure cost base, while one-year, to to increases mean, stack, see I from on a we if you increases I

don’t easing really cost help that I is operator. pressure see this anything from So marginal to a going

tell talked to you transactions me after and accelerating. rate Food we sustaining Let a transactions about and challenging is it lower accelerating. going increases beverage OpEx are be up fourth what our seeing. In January, quarter merchandise fuel is year-over-year are volume X%. just We the

is across that numbers and accelerating, industry is same the suggesting that’s go when industry, the The merchandise or am that the for getting look reported the industry, those seeing the better. firm the with to and opposite continuing other fuel and is volume. by business I not me are same result so across industry, entire at suggest data we of probably food and anything the points our up. I beverage to is of to level not that But trends seeing would some the breakeven

we at in what actually the are seeing year versus And they are proof points so of we and margins one increasing year-over-year look would January -- we ago. is, a

still understand years last higher but to cost built smaller I question. to cost hope that’s be there’s increases over years. three might base on I significantly two answers up the pressures your So going a that ease,

Andrew, margins helpful. complex dynamic of that’s a margin are this know just provide that given super will am the year again, in gives talking again, I your versus far I know trying seeing down beg confidence you one then, Just first, touched maybe question structural I confidence it you maybe how just in little modeling within the change that industry? modeling kind you I the a and And provided And the terms may is Thank are this XX% just out second that my And I industry January do guess, question about so does is, this sort in play That’s with, the dynamic kind No. that final even and guess of far, you the range to in we incredibly question of I on of range? you guess, second, year? the curious be but for you range that December think, play to margins of that and it’s where how on month purposes, are your Right. there’s a through have through out, and rest think purpose this I you. of what so fuel trending. year range? the why little much margins bit chose

Yeah.

of I just you if an you to the in would make sequential perspective. and significantly, that would September on see margin judgments margin all, not off mean, come to erroneous changes. I have you else First fall to October done everyone and prices huge you when encourage based back

trends. look say, I at would broader So the

about $X.XX last to there over probably that and sustaining we there what levels. as a the COVID disbelief at is have discussion three margins around current But were Look, was years? much in prior Murphy seen is we XXXX, around having

mean, we doesn’t fourth the the analysis, volume changes, survey sustains a that inflation, industry, reduction, the increase there’s sort especially looking and smaller NAC $X.XX and do gallon adding cost merchandise per at at entire when represent itself least the our players. of NAC’s I Structurally, quartile

kind $X.XXX was three-year our of the average. $X.XX, $X.XX solid a result. It’s actually XXXX XXXX above and that

curve, can of we structure, that has way are believe which of kind stake new the today standpoint shows the we the up think that supply industry in a floor margin represents in I marginal the in players triangulate persisted the et cost kind we ground for from is, us and cetera. putting every

the for off for back unique You in XXXX. to actually with XXXX. once book walk to that fall you I and or in seen that have we XXXX $X.XX we that $X.XXX the eight-year again, price that except six-year frankly $X.XX, $X.XXX had in think every hadn’t But

that so right? under $X.XX gets that you range, And

crude a say are of back $X.XX there we that range into to a nice set we plenty people going we There based stay saying have base of they as prices and $XX. are what provides between bookends are others case. be a believe to on of north are $XXX. that Now I can $XX what to $X.XX seen, talk

means at others, there and And when trends we look downside more again, the where, be share. than are Once we frankly, seeing we may within for sort trends gaining upside of that given are it range. the

how got It’s the a of to that’s versus once range. But to a anyway, a in case, base range we provides nice point. effects kind kind XXXX minus and actual single eight-year XXXX a every of six-year

on you move the thank question and we next will So to

Appreciate you. it. Thank

next Wells line Anthony Bonadio Your Fargo. of comes from question the with

line is Your open.

Hey. morning, Thanks my for taking guys. Yeah. Good question.

that the elevated a some I prices and some obviously potential realize consumer move last of per want you to on lapping I sort you general bit offset help are within gallon we but benefit quite share with I to have of So trade slightly guidance from store seen summer down think, to number gallons. around, suggests start flat, and extent. down softness

can bit your So assumptions a more just you little there? elaborate on

Sure.

to really you expect that the falling our a differentiate go to positioning. we big don’t So us price allows price environment structure,

down et But recessions, there. much might think is We pressure don’t a trends, cetera. around demand there’s some we I recognizing and total there question see. how sensitivity predict

of deliver. gain people and flip need there’s more we when we what affordability that’s is pressure that The there, because side customers,

the single of those one are repeat of the factors, the that but couple fall probably biggest price a is just biggest expecting So off. not

last what a a food you looks QuickChek, bit quarters move little that inflation running on XXXX. what say, into acquired quite or just part. have the put bit like expecting at, below been on it then more five since playing can merchandise dig you the on XX.X% to trend you drove about margins, talk we are But is how And in you we side up as seems and cost in a that QX, effectively Okay. that

Sure. we I is and including pressure, cost at saw the news other QuickChek absolutely and certainly us ag’s mean on outages some improving. led that that’s impacted that commodities good

the really The second we is thing establishing brand high quality value the for QuickChek are as products it serves.

And pressure so standpoint, up held price showed market it transaction from we price and in the a results. broader longer than

give you transactions I That foodservices, Breakfast X.X%. example. and was about at QuickChek that the not in QSR X.X%, were we in of QX, XX% will well. represents off, up industry as and differential, is down has an broader that price January after are making strategic our only transactions but X% down paid where decisions

and momentum paid in So establishing market, broader it that maintained continuing off in XXXX. our the that position brand longer showed we pressure, in cost that is transactions price felt into the we up over

Helpful. guys. Thank,

Thank you.

next comes the line with Griffin Bobby James. Raymond from of Your question

is line Your open.

Thanks Andrew my congrats year. everybody. and the questions taking another morning, on for team, solid Good and

Bobby. Thanks, Great.

in I guess, some SG&A. the about the details you off, gave first just step-up

going to the side as I this Is to this is year XX% think about? ex about take XX%, a one-time that’s talked that benefit growth wage think versus or place the on on probably you it applies donation. X% investment just the right way XXXX kind step-up of a year-over-year the multiyear in

Yeah.

One, components there. capability-building two these investments. So

Drive you move There some to up as away mode. right, you to Rewards If operate of capability terms then in remember peak Murphy were goes back stand required costs, into the build the days. that

build experience, bench that peak of in-store sustain. costs on up of some data science, some there’s as the data So have we costs we built, there the there in around capabilities Certainly, support. as here, will analytics some of like, already on deeper one-time leverage third-party are we top of some some a but and some great the

to time go about the to go you the we plan And as set we those as employees, It line a interesting and had are plans. an into higher. a get years, the costs normal result G&A the to one. align early our years, down where actual does attrition just period, design. by of on But think five-year G&A of some is where you for new the cost Benefits in items benefit outer over the retirement the XX-year new

So, kind investments the you sense. mode. into goes They examples a some two give future. to is hopefully, are those both One that operating of just peak

other it is shifts over alignment, in et retirement, one attrition, with just normal The cetera. but time

for you the Okay. square helpful. the mentioned kind margin, Is in remodel to think, rolling place are going on X,XXX bit just start existing maybe And I is that sort touch then, that’s stores to very on, take just new foot expand stores. new program secondly, a prepared out Yes. That’s that. you a or to your little design future a of this of a store store there going the and of maybe on

could but store of typically excited analysts, to rolling I type Just out? as about and we about and anything, how be that wise, the designs like retail hear, think timing that new get to pretty

Yeah.

but So in is that the Murphy prepared So jumping square and adding minus plus food QuickChek, which not right, we at stores. some think to or a the X,XXX footage, kitchen about are beverage, chasm right? not

do if dispensed beverage where beverage. on consumers innovation prepared we brands frozen how and QuickChek implementing want dispensed right we packaged food like are on to a ours, what win engage of have kind already you beverage, and But the about with think to

have lighting, we now out, body the the for, looking of the things square are say all when within translating that, different about terms that taken USA XX,XXX some footage. how things we or we plus What it’s they Murphy customers survey laid our that into minus of box, a and are huge they store are work in

versus oftenly player the the doing context where where we out not to experience the we it the in participating customer win higher you growing all of drive are for lay much, for sales in where right that but experience, would How have as the to don’t. categories maybe we

of in I brands. before, did think or we the to of The the the not grills even national right right? as retail the sort package out have known But customer regional win we I value are on us give play. mentioned space are to right as roller brand with and best that

as so the with that already open and how the the air grab-and-repeat results customer our of And some go grab-and-go, think re-imagine wants of cooler, [ph], seeing interact resets. and to from we how we that to are some about

at good differently resets you The things the team in easier operator while traffic the flow, incredibly out how has might gotten the layout, making terms within lay store and but it of like. same for fixture

kind of opportunities the broader that as X,XXXs, gives a well. So also sense. foot but lessons into new X,XXX translate stores will we square there around our you The be that raze-and-rebuild big

Thank XXXX. you. here luck of in Best

you. Thank

with Your next the from line question Bienvenu of comes Ben Stephens.

open. is line Your

Hey. Good morning.

Good morning.

I’d I initial was bit you to on hoping little about in-store, start and if to on results talked hear then XQ. a quarter to and revisit the to quarter could, the love the you fourth extent during commentary the cadence

or is variability the As the we and month-to-month in that quarter with first a across is contended the that the in Southeast in fourth weather weather results nonfactor? creating now quarter,

more big because you and weather Look, extended nonfactor the a it’s much unless becomes have you you post-buying got ultimately and got usually like, Yeah. a a so event not factor. pre-buying,

the was over as in price December. versus October traffic in Look, well. certainly, standpoint, the impacts off of started off turn gallon from inside the where period that fall because stronger, a same That it store

three probably months. there’s deceleration the within some So

are merchandise to start really then, to impactful. year. X.X% I of us up what XX.X%, top merchandise and total, transactions margin double-digit growth is trip has the and XX%, on got really If on about volume the growth X% at I think look the Murphy up leading the January sales side excited in

up Look down at we weighed that’s QuickChek, deal constraints the we and of working of some Murphy minimum New has team still Jersey. are been in with within seeing transactions and some state centralized nicotine X% our that being by products

the year, within the but little quarter, seeing Board. across acceleration the So, we deceleration certainly, nice a start we as new are

little about bit statement. cash in the investments gears was Okay. you talked a Shifting up to new CapEx -- SG&A. Great. flow

of midpoint, sense of you investments from it of Is spend of grow? us million kind would some kind years your new the expect continue the CapEx to now for in give long-lived peak about several like? CapEx might talked You look look Is things. the this also we as what kind to normal CapEx us $XXX out side

Yeah.

I between some a probably like expect growth line in think What initiatives around like more went capitalized, more the Murphy Drive I digital some little IT and normal. Mindy the if be sustaining bit over transformation. new with it’s look Rewards. across I episodic buckets, to things some peak Those of around the initiatives, of would tend the corporate

choices we We Common the the call our both making we across it, project, also future our, Murphy USA, and have looking for Systems Environment the QuickChek environment. and where are systems about

that as come get initiatives that some we corporate of So one-time down some could done. of work

to build But sustaining you if puts a stores those some in a takes standpoint, From things network, reduce more are standpoint. there. from new that raze-and-rebuilds, some programs continue the and the sustaining the and growth, have there’s we of programmatic

From are store growth terms potential think, not still new standpoint, our of is an overall opportunities. at, true in we what I

the had through our opportunity launch have partner productivity to or raze-and-rebuilds. backfill the that we contractors gap Fortunately, maintain and general are building of

inflation the with to stores. cost is that even this we us, an for are time attractive build having, But

on inflation you our we every that. call our of be $XXX,XXX of One was about the $XXX,XXX need may for for $X.XX cover to $XXX,XXX the per seeing raze-and-rebuilds builds, but things gallon to last talked new and of about capital, margin we

but another $X.XXX, over $X.XX we maybe So need have seen well margin. you $X.XX, consistently

even So the even threshold. that though land that threshold, above and capital are they our projects below Raze-and-rebuilds economics had the an economic attractive. were more return now look

we on one to behind continue think more play grow that forward. us cadence I evaluate the that we that talked raze-and-rebuilds going to is the stores, could so out the as And we our some continue bottlenecks see we get about that and area we of opportunities

Okay. Thank you.

from of next Your is question JPMorgan. line the Royall John with

open. Your line is

Good Hi, question. for guys. Thanks the morning. taking

you stock cash light in cash out, on and allocation as your now. there’s as so you pointed past been of drawn balance XXXX buy a a flow, back your more shape. good than right on holding capital is certainly you good quarters, you in one and about and have CapEx free particularly might your think another cash where budget, free higher sheet buying So But three excess we the in actually back down should my in the return year first stock is of cash have

currencies So thoughts just on just for looking be and buybacks maintained? can

Sure. that. front-loaded than frankly, no $XXX $X billion Board, the We certainly the authorization million authorization before and got got we different from we the

long-term of average buying our certainly $XXX. is of we $XXX the weighted is -- that by part and fact confident the stock at treasury are evidenced that for We cost about are

long-term. focused the are So we on

we As we more on flow, about than that. talked cash about there is think where margin, the upside downside free

pressure We adding have retailer, not that less, the volatility typically more less. more marginal events are versus to seen

there can excess above cash and wildcards what of continue flow case free generate beyond be. that base to a plan there’s our So might

said what it, free when one when the that we is earned bank, cash that. we and the number for So past, as excess have XXXX. it flow we received it, get When in our allocated in we when priority share is we we we allocating put in it repurchase did

So you cadence going same that for should look forward.

also as machine. are The a Look, cash still of that free our algorithm, Mindy flow leverage I ratios business would highlighted conservative. is say, our part very long-term

part stores share we growth a We think balance balance entire want our have around board with always so algorithm a manage balance both for conservative lot how about of and sheet our sheet and the we free new repurchase. and to

about hope So into thinking some I how provides we insight are it. that

to I the to and side Andrew, people lower that just up when same-store Yeah. back have fuel you share picked suggest last Thank the back think healthy given you the market trading think, comps her of you and prices I price maintained players. some year, steel go very wanted mentioned down are that, back looking comps come share as you, you That’s to would from helpful. down. you XQ comments In it midyear in haven’t a noted fuel on volume Andrew. sort And have side,

and about dynamics can the you comp? maybe those share So strengthen talk at fuel holding on to that

have to Yeah. about us and blessed them of close things we Murphy of have panel just great talked are the XXXX. insights is XXX,XXX we pay I and to into close since consumers this that who one have to Look, month from we Reward our very every consumer Drive bought through mean, something attention

that cost any we And new of buying means noted is that goods steady seeing bringing them of are us are Murphy basket as doesn’t they changes in at much as Their their that good. from significant the the consumers. are terms peak, in holding behavior we we buy and USA volume and it which as we did fact during not on growing

they inflation They alternatives under et consumers so don’t have think I more gap of these a get between really consumers. consumer feel feel the than to and They cetera. we they target and than end to that how higher wages the higher pressure. inflation work, continues consumer income are that a earn for be have lot more the the

saw from with both current elevated I grow the lower we as XXXX but about for price the consumers, the environments that, the lower peak, think from XXXX. low in we prices, while we be feel significantly did an are to in So think are going even there to standpoint them continue XXXX, outlook, prices these because and like they John, are confident economic we affordability we very versus still January,

think in, than out like is consumer affordable need think there the the going more to This rates those to having going So interest our opportunity higher we I there raised to ever you are with consumers are be going that that are model. factors like. I and be all that and impacting to rents serve more us

you. Thank

from of with Dickerson the Rob Your next question is Jefferies. line

open. is line Your

of so and history. ago, out into is so a at an this of you year. flow or how are might we materially independent COVID, terms coming of that of just kind accelerated inflating, Thanks to year a I said in through kind was the have a remember I question trying to component basis, maybe national right, maybe increasing these maybe rate had costs of on a some this other prices players relative where we rate like of, the maybe kind Great. were much. CPG feel guess, at had just I follow-up competitive activity

of or seeing have past quickly are maybe prices also month gone little the the it a data you Now gone than up prices we more little bit, retail down that of see, so. up a over bit I come guess but some like has RAC looks some the

share kind year as isn’t to vis-à-vis you the the market I of maybe a say just curious right, So right would am now if like ago, about Thanks. try think everybody kind competitive move some those dynamic you prices quick wants the is hold if back up, back obviously and because spot? goes in to up wholesale consumer of maybe the best to not

there’s There’s lot Yeah. actors Look, a there. of moving and different also a markets always pieces. out of lot different

about rate breakeven So for the from one significantly. gone the the hard requirement we of the the question, player inflation, up industry it’s rate it’s kind marginal talked say of of generalize. to it have would I cost first and very

same that on the pressures it the The better, much health to isn’t rate that have consumer are but normal continues so still to. that we rate up isn’t retailers serve. go at the a at go lower we and at increase going pace. wouldn’t consumer more all least but probably to of the you But prices, there expect really it up, And

versus prices of down card some we the you there, that things would on got other routing that fees front that pass-through. credit where affords a that is that’s say, largely there’s that and as over investments a several see player, work that’s made is more pass-through. One the largely do because but I have doing are we the versus, of of are last that and peak scale debit the three the advantage a we million the team us saved our say years dollars have result

credit fee that. bit, and margins card are compare out always promotional hey, little if impact some some There’s where say, pricing someone the lost there up say, of I down wake a share. you the may have activity well, So and year-over-year competitive

that all episodically, a to see try behavior and so it. you I go What up look think, is, I rational me higher X% Let continue would might January, while from you at are if the to in contribution see grab is basis I year-over-year Board. across we say margins

Rob, something And else…

Okay.

in January XXXX. add in with restoration mode essentially only what the has from saw perspective, but Andrew’s not environment relentlessly it’s for been with to similar upward we a would five retail of …I May pricing market’s been the also weeks, comments, particularly pricing to

So prices when it’s a also function the are week. rising during of

start position had weeks the that with if margining until on and the the days market intended price can your three weeks, and you when So five the the those to you of freezes trolls last in get through essentially and the jumps back track. of in right place, heading go weekend double of restore December margin five multiple and following into week weeks begins a digits lower January, week sometimes

was, that saw we structural occur really was and leading versus have price jumps. what that May, dynamic pressures peaked same to are end-of-week just we which it margins So last many worry alleviating

rebounded to So above May a $X.XX below for month, our in margin, the gallon XX% example, side but it June. on was retail that

pattern seen Groundhog it’s ironically, So as we Andrew said, and have before. Day this

timing function right we occurring logical now. the that’s not concerned January just really the So as the pricing rest of really dynamic it’s are year a with and of or the even results

helpful. where And extremely was We then it guess up. for I kind kind That’s I Okay. clarification and of thinking summed own maybe headed. just That’s of my [ph].

and a than far relationship so up despite seeing have fuel kind a kind I bit last because they all-in said think in coming year and of little the of down PS&W retail do you had January, the maybe margin RINs go of you different are better kind some.

RINs just explained. obviously a helpful. That’s is bit PS&W of and a you. quickly which you of still be explain kind like That’s Thank kind So and kind higher, of just it. maybe separate just piece little simplistically, how might

Yeah.

in positive. PS&W rising on typically is a environment impact timing the So, price

that pressure be any expect side to would on within we product margin are for the up seeing we So made supply.

end were they least the quarter. fourth of prices RIN the over at at elevated Also, are what

looking we So first be we first results what last to year. balance expect to results, our but are was just would expect those January, comparable again, on that quarter at would it we quarter

Got it.

And certainly, last a they what be little should or comparable to year higher. were results January’s

guys. Perfect. Thank you,

a slightly higher is And margin than the year retail-only ago as well.

Thank Yeah. it. Perfect. you. Yeah. Got

call to back Andrew this There are time. to It’s further questions now over my at no Mr. turn pleasure Clyde. the

January like Great further the long-term this short-term, that call. spent Great. seen kind acceleration and think margins I business. and about we the it’s as to have lot of questions. talking the Great near-term time business about environment I of of feel talk about across as a we the reinforcement we we think why

wonderfully, January a doesn’t and Mindy great of of year and one As what make highlighted is example of follows that. kind month a the because doesn’t I make comparison one quarter, month May, a think,

longer and we on. be industry view other the of a I about feel about like players that investments for we as the for term year outlook XXXX, marginal that to player the excited the advantaged area whole, advantaged breakeven investments of gets decade we do focused this really last think on that us not the a good really for the where top ahead. fuel for going making requirement but retailers is And just really Murphy next USA is is decade the have, and of are the XXXX

great of Take day. a we have with calls So, forward your from care. rest to any people follow-up that, and look

gentlemen, and call. you conference today’s thank This participating. Ladies concludes for

You may now disconnect.