Murphy USA’s 2026 Q2 Call: Fuel Supply Normalization Timeline and Margin Guidance Volatility Clash with Prior Outlook

Date of Call: Aug 6, 2026

Guidance:

• Retail fuel margin for the back half of 2026 is guided to $0.35 per gallon, considered achievable and conservative.
• Merchandise sales target for 2026 is expected to be at the low end of the previously stated range, impacted by consumer budget pressures and weather.
• New store openings (NTIs) for 2026 are expected to be closer to 45 rather than the upper end of guidance, excluding potential tuck-in acquisitions.
• Capital expenditure is trending to the high end of the range to support NTI delivery and proactive lifecycle investments.

Business Commentary:

Fuel Margin Outlook:

• Murphy USA's fuel margin guidance for the second half of 2026 is set at 35%, reflecting a conservative yet achievable target amidst fluctuating market conditions.
• The stability in margins is attributed to competitors maintaining rational pricing and the company's strategic asset advantages in fuel supply, especially during times of scarcity.

Merchandise Performance:

• Merchandise sales are under pressure due to consumer budget constraints, with expectations to hit the low end of the target range.
• Non-discretionary items and categories like lottery and beer are facing challenges, while core categories like packaged beverages and tobacco products show resilience.

NTI (New To Industry) Store Development:

• The company is projecting 45 new stores for the year, focusing on organic growth without significant tuck-in acquisitions.
• The decision to pull forward some store constructions is aimed at accelerating the ramp-up phase, enhancing long-term growth prospects.

Customer Loyalty and Engagement:

• Elevated customer sign-ups for the rewards program have increased, with a notable percentage being new or lapsed customers.
• Enhanced engagement strategies, such as personalized offers and promotions, are driving customer retention and store visits, contributing to loyalty and consistent behavior.

QuickCheck Performance:

• QuickCheck's performance is stabilizing, with improvements in food and beverage sales and margins.
• Strategic initiatives like focusing on the sandwich category and evolving the business model are driving better promotional responses and sales growth.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed confidence in margin stability and outperformance, citing 'higher floor for retail margins' and 'virtuous cycle' of rational competitor pricing. They noted strong customer loyalty program sign-ups, positive volume trends in May and early August when prices fell, and strength in core merchandise categories. The tone emphasized resilience and strategic positioning for growth.

Q&A:

• Question from Irene Natel (RBC Capital Markets): Concerns about the updated 2026 outlook for fuel margin guidance and the low-end merchandise guidance, seeking more color on confidence and drivers.
  Response: Fuel margin guidance is conservative but intentional, based on a higher floor from rational competitor pricing and stability when prices fall. Merchandise guidance is at the low end due to consumer budget pressures and weather impacts, with the original target considered a stretch.

• Question from Puran Sharma (Stevens Inc.): Inquiry on how quickly physical supplies could normalize if the geopolitical conflict resolves, given current supply tightness.
  Response: Supply normalization is not expected in the near term; it may take well into next year due to infrastructure damage, depleted inventories, and disrupted flows.

• Question from Bonnie Herzog (Goldman Sachs): Questions on NTI delivery, changes to construction timing, and impact of pulling forward stores on growth and profitability.
  Response: NTI delivery is at the low end of range organically, excluding potential tuck-in acquisitions. Pulling forward some stores will help ramp sooner, but full profitability takes about three years; large-scale M&A is not a priority.

• Question from John Park (Wells Fargo): Puts and takes for nicotine margin dynamics in Q2 and outlook for Q3 given the ZIN lab expiration.
  Response: Nicotine remains a tailwind in H2; combustibles are strong with new value products, but Q3 will be a tough comp lapping the ZIN promotion, with margins pressured by a resurgence in lower-margin cigarettes.

• Question from JP Morgan: Update on rewards program conversion, driving customer visits, and in-store conversion from the pump.
  Response: Loyalty sign-ups exceeded 600,000 per month in Q2, with 46% being new or lapsed customers. Engagement is improving with targeted offers, and promotions like 'spend $5 inside, save 5 cents on gas' are driving pump-to-store conversion.

• Question from Bobby Griffin (Raymond James): Assessment of competitive volume drag from states like Colorado and Florida, and signs of reaching a bottom.
  Response: Competitive entry remains high, but margins are improving in affected states as volumes redistribute and stabilize, indicating some green shoots though not a definitive bottom.

• Question from Jacob Iken Phillips (Mellius Research): Reconciling lower NTI guidance with higher capital spending, and outlook for share buybacks.
  Response: CapEx is at the high end to support NTI delivery, proactive store investments, and land bank development. Share repurchase remains a key capital allocation lever, balanced with growth opportunities.

• Question from Brad Thomas (KeyBank Capital Markets): Color on same-store fuel volume trends, customer retention efforts, and performance through August.
  Response: Same-store volume was +0.5% in Q2, with strength in May and early August as prices fell, allowing price differentiation. The MDR platform enhances customer communication and targeted promotions to drive loyalty and retention.

• Question from Corey Tarlow (Jefferies): Clarification on August fuel margins and perspective on fuel supply benefits during volatility.
  Response: August margins are in the high 30s, higher than the start of the month due to competition and timing. Fuel supply advantages are magnified in tight markets, with controllable margins (e.g., shipping assets) providing a significant benefit versus buying at rack price.

• Question from Irene Natel (RBC Capital Markets): Whether the $0.35 fuel margin guide for H2 is sustainable into 2026-2027, representing a new floor.
  Response: The rising floor for margins is supported by the virtuous cycle and rational competitor pricing; while not providing specific next-year guidance, the trend is incrementally positive for the long term.

• Question from Danielle Guglielmo (Capital One Securities): Notable changes in construction costs for NTIs or raise/rebuilds this year.
  Response: Construction costs are trending higher due to inflation but are more than offset by improved fuel margins, leading to higher overall returns for new stores.

• Question from Brad Thomas (KeyBank Capital Markets): Update on QuickCheck performance and EBITDA outlook for H2.
  Response: QuickCheck performance is stabilizing, with improving food and beverage sales and margins, deliberate category growth (e.g., sandwiches, bakery), and successful promotional execution.

• Question from Corey Tarlow (Jefferies): Performance trends for non-nicotine merchandise, specifically at Murphy's stores.
  Response: Non-nicotine strength is in core categories like packaged beverages and candy, though offset by pressures in lottery and beer. Overall merchandise contribution dollars grew positively with share gains across categories.

• Question from John Park (Wells Fargo): Reasons for unchanged volume guidance despite better H1 performance and potential for outperformance.
  Response: Guidance remains conservative, not baking in prolonged price declines that could boost volume and margin. The aim is to commit to achievable targets, with potential for outperformance if market conditions improve.

Contradiction Point 1

Fuel Supply Market Outlook and Timeline for Normalization

Contradiction on when supply will normalize following geopolitical conflicts.

Puran Sharma (Stevens Inc.) - Puran Sharma (Stevens Inc.)

2026Q2: Supply normalization is not expected in the near term. The return to normal could take well into next year. - [Mindy West](CEO)

What is the timeline for normalizing physical fuel supply if current geopolitical conflicts resolve, considering depleted inventories, rebuilding reserves, and disrupted flows? - Robert Griffin (Raymond James)

2026Q1: The market is moving closer to balance. Indicators include: increasing exports, U.S. motor gasoline inventories returning to 5-year average levels, slowing global supply replenishment... - [Mindy West](CEO)

Contradiction Point 2

Retail Fuel Margin Guidance and Volatility

Contradiction on the predictability and drivers of future retail fuel margins.

Irene Natel (RBC Capital Markets) - Irene Natel (RBC Capital Markets)

2026Q2: For retail fuel margins, the guidance is conservative due to ongoing macro volatility... A pronounced price decline to gain volume isn't being baked in. - [Mindy West](CEO)

Can you provide more details on the updated 2026 outlook, specifically regarding fuel margin guidance and the relatively low-end merchandising guidance, including the confidence and drivers behind both? - Irene Nattel (RBC Capital Markets)

2026Q1: Given the strong Q1, exceeding the original guidance is likely, though guidance was not updated due to high volatility... The guidance is now seen as conservative, and the company will remain nimble and react to daily market conditions. - [Mindy West](CEO)

Contradiction Point 3

Timeline for Competitive Market Stabilization

Conflicting timelines on when competitive pressures subside and margins stabilize after new entrants.

Bobby Griffin (Raymond James) - Bobby Griffin (Raymond James)

2026Q2: In Colorado, Murphy's volumes are down less than the market, and margins improved. In Florida, margins are healthier despite volume declines... The pattern shows that initial competitive entry lowers margins, but over time, volumes reallocate and margins stabilize at a higher level as the market finds a new normal. - [Mindy West](CEO)

How is the competitive environment, particularly in states like Colorado and Florida, impacting the company, and is the company nearing the bottom of competitive drag? - Robert Griffin (Raymond James & Associates, Inc.)

2025Q4: When a new entrant enters, it takes 3 months to a year for the market to stabilize, after which margins typically rise. - [Mindy West](CEO)

Contradiction Point 4

Growth Trajectory and Contribution from New Store Classes

Inconsistent outlook on the maturity timeline and financial contribution of new store classes.

What are Bonnie Herzog's key takeaways from Goldman Sachs' earnings call? - Bonnie Herzog (Goldman Sachs)

2026Q2: The company is pulling some stores forward to open earlier in 2026 to start the ramp sooner, but it still takes about three years for a store to reach full profitability. - [Mindy West](CEO)

What caused the reduction in New Store (NTI) delivery guidance to 45 stores from the upper end (construction delays or M&A changes), and does pulling forward construction imply a faster ramp next year, affecting growth and profitability? - Pooran Sharma (Stephens Inc.)

2025Q4: Each class of ~50 stores contributes $35M-$40M at maturity. By 2027, three classes will be contributing... - [Mindy West](CEO)

Contradiction Point 5

QuickChek Performance Outlook

Contradiction on the direction and timeline for improving QuickChek's profitability and margin health.

Brad Thomas (KeyBank Capital Markets) - Follow-up - Brad Thomas (KeyBank Capital Markets) - Follow-up

2026Q2: QC performance is stabilizing and improving. Food & beverage sales and margin turned positive... Performance is headed in the right direction but not yet back to desired levels. - [Mindy West](CEO)

Can you provide an update on QuickCheck (QC)'s performance and its EBITDA outlook for H2 2026? - Bradley Thomas (KeyBanc Capital Markets Inc.)

2025Q4: QuickChek sales are strong but margins and traffic are pressured. - [Mindy West](CEO)