Murphy USA (MUSA 1.12%), a leading operator of convenience stores and fuel stations strategically located near Walmart, reported earnings for Q2 2025 on July 30, 2025. The most important news: earnings per share (GAAP) reached $7.36, exceeding estimates by 12.4%, while revenue (GAAP) declined to $5.01 billion, missing GAAP analyst expectations by $116 million. Cost control and healthy fuel margins supported profitable results even as both fuel and merchandise volumes remained soft. The quarter showed a resilient operating model but highlighted a modest sales environment and the importance of ongoing execution in both fuel and merchandise operations.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP, Diluted) | $7.36 | $6.55 | $6.92 | 6.4% |
| Revenue (GAAP) | $5.01 billion | $5.12 billion | $5.45 billion | (8.1%) |
| Adjusted EBITDA | $286.0 million | $278.6 million | 2.7% | |
| Net Income | $145.6 million | $144.8 million | 0.5% | |
| Total Fuel Contribution | $393.0 million | $390.3 million | 0.7% | |
| Merchandise Contribution | $218.7 million | $216.5 million | 1.0% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Focus Areas
Murphy USA operates more than 1,700 convenience stores and gas stations, with many located directly next to Walmart stores. This model generates high customer traffic and allows it to offer competitive pricing on fuel and everyday convenience items. Its stores are typically smaller formats, using company-owned property and lean staffing to keep costs down.
In recent years, the company has focused on expanding its store count and boosting the productivity of existing locations. Key business drivers include fuel margins, merchandise sales (including key categories like nicotine and beverage products), and strict management of operating costs. Access to favorable fuel supply arrangements and close ties to Walmart remain central to its strategy. Sustained ability to capture value from new stores and maintain cost discipline will be crucial to long-term success.
Quarter Highlights and Operational Developments
The quarter was marked by margins that were above the prior year and showed resilience even as both total revenue and volumes came under pressure. Earnings per share (GAAP) rose 6.4% compared to Q2 2024, despite GAAP revenue slipping 8.2% compared to Q2 2024. The earnings beat was driven by a combination of sturdy all-in fuel margins (32.0 cents per gallon, up 0.3 cents). and reduced selling, general, and administrative (SG&A) expenses, which fell nearly 14% to $50.9 million compared to Q2 2024. This highlights success in areas like professional fees, incentive costs, and wage control.
Fuel sales, the largest part of the business, saw gallons sold at the store level drop modestly. Retail fuel volume per store averaged 241,600 gallons per month (down from 247,200 in Q2 2024), and same-store sales volume fell 3.2%. However, the company offset these headwinds through margin performance: total fuel contribution grew 0.7% compared to Q2 2024, while renewable identification number (RIN) credits more than doubled to $59.8 million compared to Q2 2024, helping counterbalance ongoing weakness in product supply and wholesale (PS&W) contributions. PS&W, which measures income from broader fuel supply operations, was negative ($25.9 million), an area management noted as under pressure from industry oversupply and low price volatility.
Inside the store, merchandise contribution climbed 1%, with total merchandise sales passing $1.09 billion for the quarter. The merchandise margin held steady at 20.0%. Key product families included nicotine products (such as cigarettes and smokeless tobacco) and food and beverage lines offered through QuickChek stores, which have shown growth in sandwich sales and rewards program membership. Still, same-store sales (SSS) for merchandise and nicotine both remained essentially flat, pointing to stable but unexciting customer traffic and spending patterns. Non-nicotine sales also showed minimal change.
Cost control remained a highlight. Store and other operating expenses totaled $275.2 million, but SG&A savings were notable. Operating expenses per store month—excluding payment fees and rent—rose 1.7%, reflecting maintenance and employee costs tied to new store growth. Payment-related fees were lower, thanks to reduced fuel prices, tempering this increase. Aggressive expense management helped support profit margins, even as new store builds (which take time to reach full productivity) added short-term cost pressure.
The company continued a robust capital return plan, repurchasing 470,700 shares for $211.9 million, lowering the fully diluted share count to below 20 million. The quarterly dividend rose 2.0% to $0.50 per share. Share repurchases and the dividend are matched by a willingness to take on more debt, with long-term borrowing at $2.07 billion as of June 30, 2025 (up from $1.78 billion as of June 30, 2024) as it finances network expansion and buybacks. Leverage ratios remain within stated targets, but the rising debt level is a focus for the balance sheet going forward.
Store network development pressed on, with six new stores opening (five Murphy USA/Express, one QuickChek) and a net increase of five locations. At quarter end, 39 stores were under construction, with management reaffirming plans to add 50 new stores over the next 12 months. Store productivity, especially for newly built and rebuilt locations, takes about three years to ramp, temporarily impacting average store sales and margin leverage. New builds are performing above average, especially on merchandise margin, but initial costs and ramp time weigh on short-term results.
Though cash and equivalents decreased to $54.1 million, reflecting high investment in capital spending and share buybacks. The effective tax rate dipped to 24.4%, down from 25.1% in Q2 2024. Liquidity is supported by a sizable credit facility, with only a fraction drawn at quarter end, offering flexibility for ongoing growth projects.
Looking Ahead and Management Outlook
Management did not provide specific forward guidance for upcoming quarters or for the full year in this release. On the call, leadership reiterated its confidence in delivering 50 new store builds over the next 12 months, emphasizing the role of store growth and merchandise innovation in future EBITDA gains. Comments also projected that PS&W margins, which have been negative due to excess industry supply, would normalize in the second half of 2025.
Key areas to monitor in the coming quarters are same-store sales trends—especially for fuel and in-store merchandise—and any shifts in underlying customer demand. The company will also need to balance ongoing growth investment with managing higher debt and sustaining capital returns. The planned expansion of QuickChek stores and the continued build-out of digital initiatives and promotional programs are central to management’s long-term strategy. The quarterly dividend was raised 2.0% to $0.50 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
