MURPHY USA INC. 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Murphy USA reported a positive 0.5% same store fuel volume growth in Q2 2026 despite a challenging pricing environment with prices down 2%.
- Fuel margins are expected to be around 35 cents per gallon in the back half of 2026, reflecting a higher floor for retail margins and rational competitor pricing.
- Merchandise contribution dollars grew despite pressures on non-discretionary categories such as lottery and beer, with strength in core center store categories and nicotine products.
- The company expects to deliver closer to 45 new store openings in 2026, at the lower end of the original guidance range, primarily from organic growth without large-scale M&A.
- QuickChek's performance is stabilizing with improvements in food and beverage sales and margins, including growth in sandwiches, bakery, and coffee offerings.
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Transcript
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Thank you for standing by. My name is Freda, and I will be your conference operator today. At this time, I would like to welcome everyone to the Murphy USA first quarter 2026 earnings Q&A call. All lines have been placed on mute to prevent any background noise. If you would like to ask a question during this time, simply press star, followed by 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Christian Pikul.
Please go ahead. Hey, thank you, Freda.
Welcome, everybody. Thanks for joining us this morning for this Q&A session. With me are Mindy West, President and Chief Executive Officer, and Donald Smith, Chief Financial Officer. As Freda said, we're happy to welcome more analysts to the research community covering Murphy USA. We're going to ask that you limit your initial questions to one and then get back in the queue afterwards. Please keep in mind that some of the comments discussed in today's Q&A session may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Please refer to the forward-looking statements section of either the earnings release or the management commentary document for further details. With that, I'm happy to open up the call.
Thank you. Please limit yourself to one question. You may re-enter the queue for any follow-ups. As a reminder, if you would like to ask a question, please press star 1 on your keypad. Please stand by while we compile the Q&A roster. Our first question from Irene Nattel, RBC Capital Markets. Your line is now open.
Please go ahead. Thanks, good morning, everyone.
I was just wanting some more color on the updated 2026 outlook, notably around two elements. The first being the fuel margin guidance, and the second being the, relatively speaking, the slightly low-end guidance on merch. So I was looking for more color on confidence and drivers of both of those, please.
Good morning, Irene. Welcome to the call. Thank you for your question. When thinking about retail margins for the rest of the year, it's very difficult to predict where we're going to land because we're in the middle of a lot of heightened volatility with a crisis that continues to ebb and flow and don't know where that will end. While we can't predict the macro environment, we are seeing a higher floor for retail margins. Competitors are remaining rational. Pricing is reflective of those needs of the marginal retailer to maintain their required returns. That's still reflecting that virtuous cycle that we've seen. What we haven't seen so far is a pronounced decline in price, which would gather incremental volumes for us, as well as expand the retail margin. At this point, we are not baking that into the forecast at all.
You could call our margin forecast somewhat conservative. I would agree with that, but I would also say that that's intentional on our part because we don't know what it's going to be, and we manage our business to try to outperform our commitments. What we are saying is reflective of what we have high confidence that we can deliver at this point. With regard to the merch, obviously our consumer is experiencing some budget pressures, which are putting some pressures on the non-discretionary pieces of our merch business. Although, we have been very pleased with how resilient the customer has been year to date. I will tell you that target, when we originally set it at the beginning of the year, was a bit of a stretch target anyway. It was going to be very hard to get to the high-end range of that target.
In the face of all the weather impact that we had in the first quarter, excuse me, while we had the winter storms and at one point had half our network closed. That results in just a loss of demand there for those time periods, along with what we think are still going to be some pressures on our customers' wallets as we go through the rest of the year. That gives us confidence that, yes, we will be in the range, but towards the low end of the range.
Thank you. That's really helpful. Can I ask a follow-up question?
We're just going to move on, Irene. Please get back in the queue.
Okay. Will do. Thank you.
Thank you, Irene. Your next question from the line of Pooran Sharma with Stephens Inc. Your line is now open.
Good morning. Thanks for the question and congrats on posting the strong results. I wanted to get your sense on supply normalization. If current peace talks ultimately result in a durable resolution, how quickly do you think physical supplies could take to normalize given depleted inventories, the need to rebuild strategic reserves, disrupted shipping flows, potentially shuttered upstream and downstream assets? How long should investors expect supply tightness and volatility to persist even after the geopolitical situation improves?
A very good question, Pooran. Wish that I had the answer to that because all the things that you mentioned are great uncertainties in the market. Very unlike what we saw in 2022, where COVID did produce a demand shock, the Russia/Ukraine created a lot of volatility, but really had no impact on domestic supply at all. When you look at the current conflict, it obviously is a supply shock, is having a material impact on domestic inventories and flows, essentially globally. Our belief is a return to normal is not likely at all in the near term, yet to be seen is how much damage to infrastructure is there overseas, how long does that take to recover. You mentioned if this conflict resolves, I don't know that we have any line of sight to think that it's going to resolve quickly.
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