Murphy USA (MUSA) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income rose to $144.8 million ($6.92 per diluted share) on $5.5 billion revenue, up from $132.8 million ($6.02) on $5.6 billion revenue in Q2 2023, driven by record-high retail fuel and merchandise margins despite lower fuel volumes and higher expenses.

• Adjusted EBITDA for Q2 2024 increased to $278.6 million from $257.1 million in Q2 2023, reflecting improved operating performance.

• Merchandise same-store sales and margin growth were robust, led by tobacco, but full-year merchandise margin growth is expected to be around 4% due to a slow Q1 and softness in discretionary categories.

• QuickChek markets underperformed expectations due to increased QSR competition and persistent inflation, resulting in a 2% year-over-year sales decline.

• Investments in store growth, technology, and customer loyalty programs are ongoing to drive future performance.

Financial highlights

• Q2 2024 revenues decreased 2.4% year-over-year, primarily due to lower retail fuel prices and volumes, partially offset by a 3.0% increase in merchandise sales.

• All-in fuel margins reached $0.317 per gallon, $0.022 higher than the prior year, driving the highest Q2 retail fuel margin contribution in company history.

• Merchandise contribution grew 4.7% to $216.5 million, with unit margins rising to 20.0% from 19.7% in Q2 2023.

• Q2 operating expenses per store increased 6.2% year-over-year, but this was a sequential improvement from Q1.

• Depreciation and amortization increased 2.6% in Q2 2024 due to more large-format stores and rebuilds.

Outlook and guidance

• Full-year merchandise margin growth is forecasted at approximately 4%, reflecting adjusted guidance of $830–$840 million.

• 2024 capital spending is expected at the high end of the $400–$450 million range due to accelerated store construction.

• EBITDA target of $1.3 billion by 2028 remains in place, supported by core category strength and new store growth.

• Fuel margins are expected to remain strong unless disrupted by significant price volatility or geopolitical events.

• Ongoing effective tax rate is estimated between 24% and 26% for the remainder of 2024.