Dive Brief:
- Murphy USA’s full-year revenue last year dropped by $1.3 billion, or 6%, compared to 2023, according to the c-store retailer’s annual report released on Thursday.
- Murphy said the decrease in revenue was primarily due to lower average retail fuel sales prices. Late last year, the average price of gasoline in the U.S. dipped below $3 per gallon for the first time since April 2021.
- These results come a couple weeks after Murphy’s leadership called 2024 a “disappointing” year when it underdelivered against the number of new-to-industry and remodeled locations it hoped to build.
Dive Insight:
This marks the second straight year in which Murphy’s full-year revenue has fallen. Between 2022 and 2023, the retailer’s full-year revenue dropped 8.2%, which it also pinned on low retail fuel prices. In 2022, Murphy saw its full-year revenue grow 35% on the heels of its acquisition of QuickChek.
Murphy also saw net income fall by nearly 10%. In addition to low fuel prices, Murphy also pointed to higher store operating expenses, depreciation and amortization expenses, and impairment charges as reasons for the net income decrease.
Still, 2024 marked the sixth consecutive year in which Murphy’s merchandise sales increased by at least 3%. The company saw merchandise sales reach $4.2 billion last year compared to $4.1 billion in 2023, primarily due to higher retail prices in most categories and an increased number of larger stores in its network, according to its report.
Murphy also pinpointed the nicotine category — which grew 4.3% on a same-store basis last year — as a driver of its merchandise sales. The company touted its gains in this segment for most of last year, noting last summer that tobacco had become a “non-discretionary” purchase to a growing base of customers who continue to trade down for value. At this same time, Murphy’s President and CEO Andrew Clyde said that units remained healthy across all nicotine categories, and that he expected to see more strength in the tobacco category.
On Thursday, Murphy said it will lean into its merchandising strength to boost total revenue moving forward.
“We expect to further expand merchandise revenue and margins through our primary supplier relationship with Core-Mark Holding Company, Inc. ("Core-Mark") and in addition, to optimize our promotional planning, merchandise assortment, and pricing effectiveness, in order to help boost overall store returns,” the company said.
