Murphy USA 2025 Q1 Earnings Misses Targets as Net Income Drops 19.4%

Murphy USA reported its fiscal 2025 Q1 earnings on May 7, 2025. The company missed expectations with a notable decline in net income. Despite these results, the stock showed a slight increase in the latest trading day, reflecting investors' cautious optimism. The company plans to maintain cost discipline and focus on store growth and share repurchases to enhance future performance. The guidance indicates potential improvement in merchandise sales, driven by share gains in specific categories.

Revenue
Murphy USA experienced a 6.6% decrease in total revenue for 2025 Q1, reaching $4.53 billion compared to $4.84 billion in the same quarter of 2024. Petroleum product sales amounted to $3.49 billion, while merchandise sales contributed $999.40 million. Additional operating revenues were reported at $36.20 million, culminating in total operating revenues of $4.53 billion.

Earnings/Net Income
Murphy USA's earnings per share declined by 15.8% to $2.67 in 2025 Q1 from $3.17 in 2024 Q1. The company's net income also fell to $53.20 million, representing a 19.4% drop from the $66 million reported in the previous year. The decrease in EPS reflects the challenges faced by the company during the quarter.

Price Action
The stock price of Murphy USA edged up 1.00% during the latest trading day, increased by 1.54% over the most recent full trading week, and climbed 7.70% month-to-date.

Post-Earnings Price Action Review
The strategy of buying Murphy USA shares following a quarter-over-quarter revenue drop and holding for 30 days has yielded a modest 1.52% return over the past five years. This performance significantly underperformed the benchmark, which experienced an 82.57% decline. The strategy's Compound Annual Growth Rate (CAGR) stood at 0.30%, with a maximum drawdown of -9.44% and a Sharpe ratio of 0.05, reflecting higher risk and volatility compared to the benchmark, with a volatility rate of 6.11%. These results underscore the challenges and risks associated with this investment strategy.

CEO Commentary
“Murphy USA’s Q1 results fell slightly short of internal expectations, but all in all, the business performed admirably despite a 2% comparison headwind from temporal factors,” said Andrew Clyde, President and CEO. He noted that while retail fuel margins increased by 2 cents year-over-year, supply margins were lower than anticipated due to an oversupplied product market. Continued share gains in nicotine and center store categories, such as Packaged Beverages and Candy, are expected to enhance results throughout the year. Clyde emphasized ongoing cost discipline and a long-term capital allocation strategy focused on store growth and share repurchase.

Guidance
The company anticipates that continued share gains across various merchandise categories will bolster performance for the remainder of the year. Management remains committed to maintaining cost discipline and executing its long-term capital allocation strategy, which includes investments in new store growth and business improvements.

Additional News
Murphy USA recently announced the appointment of David C. Haley as an independent director to its Board of Directors, enhancing governance and leadership. The company also declared a quarterly cash dividend increase to $0.50 per share, reflecting a 2% rise, payable on June 2, 2025. Additionally, Murphy USA successfully completed a refinancing and upsizing of its revolving credit facility and Term Loan B, extending maturities and providing increased liquidity for future operations. These strategic moves underscore Murphy USA's focus on strengthening its financial position and supporting long-term growth initiatives.