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Date

Thursday, April 30, 2026 at 11 a.m. ET

Call participants

  • President and Chief Executive Officer — Malynda K. West
  • Chief Financial Officer — Donald Smith
  • Director of Investor Relations and FP&A — Ash Ulfs
  • Vice President, Strategy and IR [moderator] — Christian Pikul

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Takeaways

  • Fuel supply performance -- Fuel supply, now used as the name for the rebranded PS&W plus RINs segment, saw a 6.9¢ per gallon gain in Q1 from inventory mark-to-market.
  • Core retail fuel margin -- Core business retail margins, excluding inventory impact, reached 2.5¢ per gallon, benefiting from market volatility.
  • Merchandise trends -- Non-nicotine sales at Murphy USA (MUSA +14.30%) branded stores increased by 2%, while associated margins rose over 4%.
  • Loyalty engagement -- Murphy Drive Rewards added approximately 600,000 new members, the highest single-month increase since 2022.
  • Capital allocation -- Growth capital expenditures, prioritized for constructing 45 to 55 new sites in the year, remain the company’s first use of excess cash, followed by share repurchases.
  • QuickChek performance -- QuickChek is experiencing drag in same-store sales attributed to increased competition and QSR pressures in the Northeast.
  • Store operations expense -- Store operating expense remained roughly flat, reflecting labor model improvements and proactive maintenance cost controls.
  • April volume trends -- Average per-store fuel volumes for April are holding flat compared to last year, as clarified by management.
  • Active loyalty members -- Active loyalty program membership for March was up 8.5% year over year, with total transactions rising about 12%.
  • Promotional environment -- Promotional activity in the nicotine category remained favorable, leading to accelerated share gains within the category.
  • Fuel margin guidance context -- Management stated guidance remains unchanged despite performance “a little on the light side,” due to early-year volatility and uncertain fuel margin outlook.
  • Retail pricing strategy -- The company reduced discounting in higher price environments, with last year’s ~2¢ per gallon price advantage now localized to particularly competitive markets.
  • Supply market commentary -- U.S. motor gasoline inventories normalized to the five-year average, with ongoing tightness anticipated in certain regions for at least the next quarter.
  • QuickChek initiatives -- Efforts at QuickChek focus on menu simplification, margin improvement, and adopting a sales-oriented culture, with impacts expected over time.
  • April margins -- For April, retail margins are expected “in the low 30s” cents per gallon; product supply and wholesale are trending “above the normal levels” due to continuing market volatility.
  • Volume drivers -- Volume uplift from price-sensitive customers tends to lag spikes in fuel prices, with only 25% of stores at $4 per gallon or greater in April.
  • Market variance -- Regional performance divergences cited, including volume pressure in Colorado due to competitive store growth, and continued intense activity in multiple Florida markets.
  • Innovation and growth focus -- Strategy centers on continuing the everyday low price approach and accelerating innovation efforts in store formats and product trial, regardless of macro conditions.
  • Nondiscretionary strength -- Sales in categories like fuel and nicotine, deemed nondiscretionary, remained resilient as customers cited Murphy USA as their value retailer of choice.
  • Inventory valuation impact -- Management highlighted that inventory-related swings in fuel supply margins are subject to reversal with price direction changes.

Summary

The first quarter displayed higher fuel supply gains, robust retail margin expansion, and increased loyalty program engagement. New customer acquisitions and lapsed-customer returns outpaced historical trends as elevated fuel prices drove value-seeking behavior. QuickChek segment performance trailed core Murphy locations, prompting active margin and cultural initiatives. Company capital allocation priorities, including new store growth and share repurchases, remained consistent despite the favorable operating environment. Management emphasized that guidance was intentionally conservative, and structural market dynamics, including potential sustained supply tightness, require ongoing vigilance and program adaptation beyond the current elevated margin scenario.

  • CEO Malynda K. West said, "Volatility does work in our favor," but stressed improvement efforts are being maintained regardless of external market conditions.
  • Product supply and wholesale margins, as part of blended results, remained positively skewed in April but were expected to moderate as price swings lessened relative to March.
  • Promotion-driven share gains in nicotine were highlighted, with management cautioning on year-over-year comparability given prior third-quarter promotional spikes.
  • Longer-term margin sustainability is supported by the company’s ability to adjust pricing in response to localized competition, rather than universal discounting across the network.
  • Aggregate store operating expense efficiency improvements and targeted cost controls have positioned the company ahead of its 2026 guidance, though normalization is expected as new sites open later in the year.

Industry glossary

  • PS&W: Product Supply and Wholesale; segment reflecting bulk fuel purchasing and related inventory effects.
  • RINs: Renewable Identification Numbers; marketable credits attached to renewable fuel as required by EPA regulations, factored into gasoline and diesel costs.
  • QSR: Quick Service Restaurant; type of food retail format commonly representing competition for in-store sales at convenience retail locations.
  • RBOB: Reformulated Blendstock for Oxygenate Blending; standard grade of gasoline used in pricing and inventory discussions for fuel marketers.

Full Conference Call Transcript

Christian Pikul: Hey. Thanks, Melissa. Good morning, everybody. Thanks for joining us. With me this morning are Malynda K. West, President and CEO; Donald Smith, CFO; and Ash Ulfs, Director of Investor Relations and FP&A. Before we get started, I need to remind everybody to refer to the forward statements commentary we included in our prepared remarks yesterday. I also assume you have all read through our earnings release and the prepared remarks. We have read your notes. I have a few comments before we open it up for Q&A. First, I hope that you noticed we are rebranding the PS&W plus RINs business and simply calling it fuel supply going forward.

We provided a lengthy justification for that change along with the detailed explanation of fuel supply results, so I hope that was helpful. Second, we sent a follow-up note to our sell side analysts, but I did want to take the opportunity to clarify our comments on April volumes being flat to prior year. That metric is on an average per store month basis, not total volumes. So I wanted to point out that distinction. And lastly, as we will likely discuss, first quarter was strong, but we are focused on building shareholder value over the long term.

We are pleased with the way the business performed in the first quarter, but our focus remains on making Murphy USA Inc. better in any environment, increasing the earnings power of the company in both favorable and unfavorable environments. We will now open the call for questions.

Operator: Thank you. 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 queue. Your first question comes from the line of Irene Nattel with RBC Capital Markets. Your line is now open. Please go ahead.

Irene Nattel: Thanks, and good morning, everyone. Thank you for that explanation on PS&W and fuel supply. Very much appreciated. So just obviously, you said, Christian, this very strong start to the year. Certainly, the momentum seems to be very good. What circumstances would have to occur in order for the balance of the year to take you to a place where you do not exceed the 2026 guidance which did not seem to be updated? Thank you.

Malynda K. West: Good morning, and great question. I think it would take a lot to not exceed at this point given the amount that we are up in the first quarter alone. So I think that yes, we could definitely say that guidance that we gave is a little on the light side. But, nevertheless, we did not update the guidance, and we typically do not following quarter one, and we do not get in the habit of doing that. There is just simply too much volatility, too many unknowns early in the year to have a really accurate forecast. Our guidance, as you may remember, was built around a very low price environment. Obviously, now we are in a different situation.

But, honestly, my crystal ball is not going to be any better than yours. And this is unprecedented volatility and geopolitical risk, and it is changing every day, minute by minute. So I honestly would not know what fuel margin to put into the model to give you an accurate forecast. So at this point in the year, we are just not going to update. What we will do, though, is wake up every day, react to market conditions on that day. We know we have to be nimble, change our playbook as needed, and ensure that the business delivers the best outcome whatever the environment is throughout the remainder of the year.

But that is really all I can say about where we might end up year end. Obviously, our guidance that we gave last quarter is going to end up being on the conservative side. But the year is going to be what it is, and it is too soon to tell now exactly what that will be. So we are going to remain focused on execution.

Irene Nattel: That is really helpful. Thank you. And then just as a follow-up, and it comes back to a little bit of what you said about the fuel margin. But you know, that 6.9¢ per gallon from, let us call it, inventory gains in fuel supply. How should we think about the evolution of that number as we go through the year?

Malynda K. West: Well, fuel supply results were high in the first quarter as we explained. The core business, though, generated the 2.5¢ including the impact, excluding the impact of those higher prices. So if prices continue to increase, then you should expect the positive inventory valuations in that part of the business. If prices decline, you are going to get the opposite impact, but at the same time, that should serve to expand retail margins. Hopefully, volume as well, as we can put some of that margin on the street to create separation and have chances to gain volume.

But that part of the business is going to continue to be volatile month to month, quarter to quarter, and largely dependent on the direction of prices, but also the magnitude and duration of those price changes.

Irene Nattel: Thank you very much.

Malynda K. West: Thanks, Irene.

Operator: Our next question comes from the line of Bonnie Herzog with Goldman Sachs. Your line is now open. Please go ahead.

Bonnie Lee Herzog: Alright. Thank you. Good morning. I did have a question on the consumer, and I guess I am wondering, Mindy, if your outlook for the consumer has changed. I am thinking about in the context of prices at the pump tracking around 4 dollars a gallon across the nation. So curious to hear how have purchasing patterns maybe changed especially for the lower income consumers, if at all? And then are you seeing more consumers down-trading potentially to your stores? Is this an opportunity for you to gain share? And any kind of change behavior at the pump would be helpful.

Christian Pikul: Thanks.

Malynda K. West: Good morning, Bonnie. Yeah. Great question. I will start first with trade down because, candidly, by the time customers are shopping at Murphy USA Inc. for our everyday low prices, much of that traditional trade down has already occurred. So as a result, we really see relatively little pressure, especially in the discretionary categories even in the higher price environment. What we know is our everyday low price model is what brings customers in the door, and then once they become regular shoppers, we just do not see down behavior within the store.

What we do see, and will see, are some different decisions being made inside the store in discretionary categories like salty snacks, or really even lottery where there are just more venues and opportunities available to customers to participate in that. And remember what we said in the prepared remarks: the Murphy customer is maintaining their spend in our store.

Christian Pikul: So results are actually stronger.

Malynda K. West: Our non-nicotine sales were up 2% with margins up over 4% at Murphy stores, so we are still seeing strength in that core customer. We are seeing margin growth across most of the inside-the-store categories, but I will remind you, while that does speak to who our customer is, it also has a lot to do with our team and our offer because that margin growth does not come automatically. Our team has to look to innovate for new promotions and vendor partnerships. And we will keep at it, and do a great job because we are seeing the results. What is interesting to see at these higher prices is we are seeing new customers coming into our stores.

We are also seeing lapsed customers returning to our stores. That is telling us two really key things. First, they are changing their behavior and becoming more value-seeking shoppers, which is what we would expect. Second, and this one is really important, they remember Murphy USA Inc. as a low price retailer, and we are their store of choice when they are seeking value and low price goods in the store and low price fuel. So we know we have the right to keep this, and they are going to return to us in periods of higher prices. And we are encouraged so far by what we are seeing already.

Bonnie Lee Herzog: Alright. That is helpful. If I may just ask, as a follow-up on a different topic because I do want to comment on your newly dubbed fuel supply business, and I definitely appreciate that and all the color. I think that is really helpful. And I guess I am curious to maybe understand a little bit more about the benefit from RINs, which was really huge in Q1. And then just monitoring those prices across the board do remain quite high. So I just want to make sure I understand how we should think about the magnitude of the contribution you could recognize from fuel supply in Q2. Thank you.

Malynda K. West: Bonnie, we really look at it on a blended basis. You see the windfall in RINs because we report that as a separate category, but they are really just a pass-through because the RIN value is actually factored into the acquisition cost when we purchase the product. So with sustained movement in one direction over a quarter, yes, they can have a slight impact over a short period of time. But over time, those impacts cancel out as Brent prices move up and down. That is really just a part of the fuel supply business. That is already reflected in what we paid for the product to begin with.

As we look at the quarter, if you are trying to land at what product supply and wholesale could be for—I cannot really speak for the quarter, but for the month of April, I know we guided you guys in the speech that we were going to be, you know, 35 to 40¢ a gallon. What we are comfortable saying, with the books obviously not closed on the month yet, is we are expecting retail somewhere in the low 30s.

That would imply product supply and wholesale would be—I do not want to give an exact amount, but trend above the normal levels that we would expect to see, just because of the volatility that we are continuing to see in the market.

Bonnie Lee Herzog: All makes sense. Thank you. I will pass it on.

Operator: Our next question comes from the line of Thomas Palmer with JPMorgan. Your line is now open. Please go ahead.

Christian Pikul: Good morning, and thanks for the question.

Thomas Palmer: In some of the earlier answers, you have noted the price advantage versus competitors and how that has aided maybe some customer choices in terms of shifting towards you. I did want to ask how you think about the relative pricing advantages that you have as you watch fuel prices migrate higher. Do you think about the level of discount that attracts customers as perhaps being different—so maybe less discounting is needed relative to the environment when fuel prices are lower and more stable? And then just maybe an update given the likely elevated cash flow that is resulting from the strong earnings on capital allocation priorities and likely uses of this excess cash? Thanks.

Malynda K. West: Sure, Tom. We have said before that last year with the very low price environment, that was making our value-seeking customer less price sensitive, and we were putting roughly 2¢ a gallon on the street to hold our volumes given the low prices and customer price sensitivity, but also competition. But when we said that, remember that 2¢ is not necessarily chain-wide. It is concentrated in certain areas. So where competition is very intense, we were putting more than 2¢ on. Other places where the competitive pressure was not so much, it was less than 2¢. So I think as we return to a higher price environment, we will have to be less aggressive.

But, again, in certain markets, we are still going to price where we need to hang on to volume as we see competitive pressures. Yeah. It is going to be a good problem to have. First call on capital is always going to be the growth CapEx. So we are committed to building our 45 to 55 sites for the year, so that is going to be the first priority. We will also look to balance that with ratable share repurchases as well.

There may be also some opportunities if we need to procure some supplies in order to bolster our new-to-industry stores—you know, we need to go out and buy tanks, we need to go out and proactively buy other things—we will certainly do that. Deleveraging could be an option, but honestly, given our very low leverage ratio, it is not going to be a high priority, but that could factor in at some point. But, you know, I think what we are going to do, the priority is going to stay the same with making sure that we are managing our growth, layering in some reasonable amount of share repurchase.

And as I started by saying, it is a great problem to have.

Thomas Palmer: Right. Thank you.

Operator: The next question comes from the line of Bobby Griffin with Raymond James. Your line is now open. Please go ahead.

Robert Kenneth Griffin: Hey, guys. Good morning. Thanks for taking the questions. And appreciate all the detail on the prepared remarks last night. I guess, Mindy, when you kind of think about what has developed here geopolitically and some of the changes inside the supply market, what do you look at, or what should we be thinking about when we try to determine how much of this we can capitalize on going further? And I guess I am asking that more in the context of what needs to take place or has it already taken place to move the market back from loose to tight and keep it more in a tight supply market on multiple quarters versus just a short-term benefit.

If that all makes sense.

Malynda K. West: It does make sense. Good morning, Bobby. Great question. I would say that the market is moving closer to balance than what it was. So what I would look at is we are seeing increasing exports. Total motor gasoline inventories in the U.S. have now returned to the five-year average level. So they are not beneath it. But that has removed the overhang from last year. We are also seeing supply replenishment slowing globally. And there is a lot of market concern, especially for diesel and jet fuel. Remains to be seen the amount of damage to infrastructure that might have occurred overseas and the time that is going to need to recover.

So we could see some supply pressure the longer this goes on, which would work to our benefit with our unique ways that we can procure supply. And, additionally, I think one of the investment banks just increased their Brent and WTI forecast for the end of year by 10 dollars. That would work to our benefit as well. Obviously, keeping prices higher, that will continue to impact customer sensitivity. But, you know, I would expect that there is going to be some tightness in supply in certain pockets throughout at least the rest of this quarter and probably through the summer. But there are still a lot of unknowns there.

Those are the things that we are looking at: How long does this conflict last? When does the strait open? And how much damage to infrastructure is there, and what is the time frame needed in order to get that back up online?

Robert Kenneth Griffin: Okay. Helpful. I appreciate it. And then maybe switching gears and going inside the store, I think you called out the Murphy non-nicotine was up 2, which kind of implies the drag here on the same stores being down 1 is in the Northeast on QuickChek. I know there have been some things you guys have been working on. So just maybe curious if you can unpack some of the progress there. Is the drag still just competition and QSR factors, or anything else for us to glean out of that?

Malynda K. West: Yes. A lot of it is just that drag in the Northeast region where we are experiencing a lot of QSR pressures. It is just a different competitive situation than what we have in our Murphy USA Inc. markets. We are not sitting still, though. We are taking steps to try to improve the business. We are focusing on the core items in the food—like coffee, breakfast, sandwiches. We are really simplifying the menu, rationalizing the assortment, improving the margin. One of the other things that we are doing that I really think is going to help is we are actively working to evolve the culture inside the QuickChek stores into a sales-first mentality.

That is something that we successfully leverage at Murphy USA Inc., and something that is not part of their DNA the same way it is in ours. And it is really an intentional change supported by the leadership changes that we have already made in that business. It is too soon to really give you proof points. We are just in the early stages of that, but we are really excited about what kind of impact that we are going to have there. This shift in focus is going to make our promotional calendar even more effective, similar to how well we execute large promotional opportunities at our Murphy stores.

And we should also see benefits that will help drive all the center-of-the-store categories, not just food and beverage. But we also know we need to double down on efficiency. We need to improve time to serve, and we need to ensure our sales and promotional calendars are reinforced with products with the right margin structure versus making up ways to drive traffic that are not margin accretive. But I am really excited to see how a sales culture at QuickChek can be implemented and really drive results, because I think that we are going to be really happy with the results. And I know they are really excited up there to make that change.

Christian Pikul: Thank you. I appreciate all the details. Best of luck here in the second quarter.

Malynda K. West: Thanks, Bobby.

Operator: The next question comes from the line of Edward Kelly with Wells Fargo. Your line is now open. Please go ahead.

Edward Kelly: Yeah. Hi. Good morning. Looking at gallons, your gallon performance was not quite as positive as I thought it would be with prices rising. I know there is some weather impact, but beyond weather, even that seems to be the case. April seems a little bit better, maybe there is some lag in the trade down. I am just kind of curious, are you seeing the consumer trade down taking place as you would have expected this quarter? Is there anything else happening there?

Malynda K. West: Yeah. What I would tell you is volume uplift from higher prices takes time. And we are really too early in that cycle. Many markets were only in the mid-3 dollars range as they exited March. And, historically, we really see pronounced shifts once prices stay elevated and particularly elevated above 4 dollars for a sustained period. So in April, we are seeing volumes holding up well, roughly flat year over year. And the longer the prices stay high, the more customers we attract, but that shift does not happen all at once. It is more a gradual build. And in fact, only a quarter of our chain is sitting at or above the 4 dollars level now.

Importantly, though, for our Murphy Drive Rewards, we saw approximately 600 thousand more loyalty sign-ups. That is the highest monthly total that we have seen since 2022. And we are viewing that as a really strong signal of those customers actively seeking value and choosing Murphy as part of their everyday routine. Also, remember, though, that price-sensitive customers are only one factor that impacts volume. You cannot discount the market dynamics in different geographies and different competitive intensities. So Colorado continues to see volume pressure because we are growing there. Everyone else is growing there too. We are seeing some signs of market stabilization, though, as margins are now returning to a more new normal.

Markets like Florida—we are still seeing highly competitive activity. So that is pressuring both volume and margin in that region. It is not a single market, but there are many markets in Florida that are still highly competitive as everyone is trying to attract their fair share of customers. Then we can look at Texas, which we would call a more mature market, and while there are still new store opportunities in the market, the players are already well established, and so there is not as much volume and margin pressure in a state like that. And then when we look at the quarter, weather was definitely a headwind. We would estimate that headwind—last year, it was roughly 2%.

It is probably a bit more than that this year given the sheer number of closures that we had and the duration, but if you just say it was 2%, that was definitely a headwind that would have made our volumes for the quarter up versus down had those not occurred. And also, when we look at OPIS and examine our data, it would tell us that we are outperforming in all of our regions even with all those pressures. So I think the price sensitivity will come. It is just too early in the cycle as most of this price pressure really happened in March. Those customers have only had a paycheck or two, a fill-up or two.

They have not even received their credit card statements for those purchases yet, so it is just going to take some time.

Edward Kelly: Great. Thanks for that color. I just wanted to follow up on store operating expense. Really well controlled in Q1. It looks like you are running below the full year guide. Can you just talk a little more about the changes you made to the store labor model and the impact that is having and how we should be thinking about APSM growth moving forward the rest of the year?

Malynda K. West: Yeah. We take the roughly flat increase as a very positive data point, and we think it is demonstrating our ability to implement the self-help that we did last year, controlling what we could during challenging periods, and that is giving us benefits now. What we are seeing is benefits continuing in the store labor model—making sure that we have the stores fully and adequately staffed during the busy times, but not overly staffed when they are not busy. So continuing to fine-tune the labor model, continuing progress on shrink where we have made it a focus area. We have also incorporated it as a goal for the sales team. So we are paying a lot of attention to that.

And, also, the shift in maintenance mindset—being more proactive and taking a business mindset versus an approach where we were, in the past, just trying to clear the tickets. Now we are taking a step back and prioritizing tickets and batching tickets where possible, and I used the example in an investor presentation where instead of when one light bulb goes out in the canopy, instead of calling in a tech and having the site visit cost, the cost for the special scissor lift that it takes to get you on the canopy, why do we not wait till the second light bulb goes out? Because it is not causing material discrepancy in the illumination with one bulb down.

Things like that may seem small, but when you spread that over 1.8 thousand stores, those little things can quickly become big things. So we are just taking a different approach to the way we are thinking about maintenance—thinking about it more from a business standpoint versus just trying to clear the tickets. As a reminder, though, as our new stores enter the network, we do expect roughly half of our OpEx growth to reflect that with the same-store to trend at least in line, if not better, than our peers. But when we look at our 2026 guidance, we are ahead of that right now.

As we feather in our new stores, we do expect to get more back in line with our guidance range in the second half as those stores come online.

Edward Kelly: Great. Thank you.

Operator: The next question comes from the line of Jacob Aiken-Phillips with Melius Research. Your line is now open. Please go ahead.

Christian Pikul: Good morning, and congrats on the strong quarter.

Jacob Aiken-Phillips: So, Mindy, I know you have been in the business for a long time, but your first full quarter as the CEO, and the environment is completely— I am curious if the new environment has changed your thinking about experimentation, growth investment, self-help initiatives, or capital allocation? Anything?

Malynda K. West: It has been an interesting turn of events, one that, frankly, I did not expect during the quarter, but it does not change our overall strategy. We are going to continue to lean into everyday low price. That is staying the same. Continuous improvement mindset—we are only going to accelerate that going forward. Capital allocation remaining unchanged. We are pushing an innovation agenda. We want to collaborate quicker. We want to try and test things. That unlock was something that I talked about even before, and it does not diminish in importance just because the fuel macro environment is different. We know that we still need to improve the underlying business of our same stores.

We also need to make decisions that can change the trajectory of what we are going to be building that is new in the future. And so while it is easier to have a call when things are going like they are going now, it does not change the focus and the intensity of our efforts in needing to improve the business going forward because we cannot always count on an environment like this sustaining.

Operator: We are currently experiencing technical difficulties. Please stand by.

Christian Pikul: Hey. Are we back online?

Operator: Yes.

Christian Pikul: Hey. Sorry, guys. Apparently, we cut out. I do not know where we left off. Jacob, can you queue us up?

Jacob Aiken-Phillips: Oh, yeah. I was just going to say the question again. So on nicotine, last year, there was a concern that it was a one-off promotion activation and that it would not repeat. But, clearly, you are still doing very well in the nicotine category. So can you talk a bit about the promotional environment now and throughout the year and what gives you confidence that is actually a durable component? I am sure having 600 thousand additional rewards members helps.

Malynda K. West: Yes. The reward membership definitely does. Look, we love the category. We put a lot of attention on it. As we mentioned in our prepared remarks, promotional activity has been favorable in the first quarter, and we are continuing to see strong performance even as we go into April. We are continuing to grow share and accelerating growth in that category. It is really growing at a very rapid pace. And, importantly, customers are still trying to figure out their desired flavor and strength. There are really no clear winners yet. Manufacturers know this, so they are investing in trial.

Similar to energy drinks, you are going to see continued strong promotional activities as those brands invest to try to gain that customer. And we are going to continue to be a preferred retailer for those manufacturers to pass through savings and attract those customers, especially as they target combustible customers where our share in cigarettes is 20%. So we are ideally situated, happy to help their promotional efforts, and have demonstrated the ability with them to hold on to those customers post-promo as we continue to gain share.

I do want to remind everybody—everybody remembers the promotion we did back in the third quarter, and that is going to be a very tough comparison in quarter three when we lap that. We are probably going to want to look at a two-year stack as we progress through 2026. But we are going to continue to get promotional dollars. We are likely not going to have a promotion as lumpy as that particular one was. But we do see strength in the category, and we do have intentions and the ability to continue to grow share.

Jacob Aiken-Phillips: Great. Thanks, and congrats again.

Operator: Thank you. Our next call comes from the line of Brad Thomas with KeyBanc Capital Markets. Your line is now open. Please go ahead.

Christian Pikul: Good morning. Thanks so much.

Bradley Bingham Thomas: Mindy, I wanted to ask about the exciting opportunity here to be picking up some incremental customers. How long gas prices stay high and how high they go will matter, but can you give us any perspective of historically the company’s ability to retain incremental customers that they brought in during periods like this? And then what is the company doing differently or may do differently as the months and quarters go on here at elevated gasoline prices?

Malynda K. West: Well, I think our loyalty initiatives are key. You know, Murphy Drive Rewards, QuickChek Rewards. What we are seeing is new member counts are up, and we would expect that. We saw the same thing when we saw prices spike in 2022. But the 600 thousand new members was the highest new member month that we have on record. We are also seeing an increase in overall active members that are up 8.5% year over year in March. Total transactions up around 12% also. So you see the dynamic of those customers—yes, they are buying slightly less per fill-up, they are having to come in more often.

And so these digital programs, these loyalty programs, are more valuable to customers as they become more and more price sensitive. And as I mentioned earlier, what we are really excited to see is those newer lapsed customers—the lapsed customers returning to our site, new customers that we are acquiring because of these higher prices—and we become the store of choice. We are everyday low price. And I am sorry, Brad. What was your other question? What are we doing differently because prices are high? Yeah.

Bradley Bingham Thomas: Exactly. I mean, really just around the idea of retention. If there is anything that you are considering changing about the loyalty program and how you market to customers, etc., to try to retain more of these potential folks coming into your stores in this current environment.

Malynda K. West: You know, we continue to make our digital programs more sophisticated, being able to tailor offers to customers. So we will certainly continue to leverage that. But, honestly, everyday low price is everyday low price. It just means more when prices are high and budgets are constrained. And, importantly, we sell a great deal of what is called nondiscretionary categories—things like fuel and nicotine—where we are the lowest price out there. Customers know that, and the offer resonates even more in this type of environment. So no, we are not necessarily doing a lot of things new, but we really do not need to.

Christian Pikul: That is great. And if I can ask just a follow-up around the underlying Murphy store model, the question that investors were all asking last year was, does it need to evolve because of industry conditions? Clearly, what is setting up in 2026, it is a great model. As you consider the opportunity to expand food or, in the case of the site that has reduced labor, will there be any incremental investments or testing because the year is shaping up to be so different here?

Malynda K. West: Because the year is shaping up to be different, I feel the same way about it this quarter as I did last quarter—that absolutely part of our innovation agenda is about evaluating new formats that can profitably serve more customers and more locations. We are also going to look to think about what is the next layer of products and services and trip missions that customers would buy from us. And then, obviously, how do we maximize the productivity of the stores we have? So I think, yes, our model needs to evolve. I think both our format needs to evolve. Also, what we have in it likely needs to evolve.

Whether that evolves to a full food offer in Murphy USA Inc. locations—what I would say is not necessarily, and certainly not everywhere. And we are going to be very thoughtful about how we step into that. I do not want to really provide a lot of color on what we are testing and what we are looking at because it is very early days, and they need time to incubate and prove themselves out. And, honestly, we are going to probably hit some singles and doubles, but we will probably strike out on several things as well. But the focus has not changed just because the year is shaping up differently. We know that next year may look different.

The next year may look different from that. We are here for the long run, and we need to make sure that our format and our offer is evolving, meeting the customer where they are, meeting their expectations, and also giving them value in everyday low price.

Operator: Very helpful. Thank you, Mindy. Thank you.

Operator: The next question comes from the line of Pouran Sharma with Stephens Inc. Your line is now open. Please go ahead.

Pooran Sharma: Good morning, and thanks for the question, and congrats on the strong results. Maybe just wanted to ask if you could speak to the structural pressure on higher fuel margins, kind of the longer-term structural pressure. You kind of alluded to it in your release and on the call. And more specifically, in this type of environment where you see strong rise in wholesale fuel prices or RBOB, you would expect to see the retail side of the equation more challenged, but you have seen it hold up. What do you think is driving that? And do you think this type of dynamic where you have really high fuel prices facilitates that thesis even more?

Malynda K. West: I think that is a great and interesting idea, and I think you are probably right. I think what we are seeing is that marginal retailer becomes that much more on the margin when prices are what they are. They feel even more pinched. We saw this start when the Ukraine invasion—back in 2002—where competitors were restoring, you know, multiple times a day. They were pre-restoring ahead of what they felt was going to be a price increase the next day. We are seeing that kind of again. I think that when things get really tight, people become less comfortable riding it out and more eager to go ahead and relieve the pressure.

And so I definitely think that is playing into it—the fact that the marginal retailer becomes that much more on the margin. We have also seen a lot of competitive entry in market. And the cost to serve does not go down when that happens, and those retailers are going to need to make a margin on those stores as well. And so they are going to feel the pressure also when prices rise. They are going to want to keep up with that fairly quickly as well. So I think both of those dynamics are in play.

But it definitely is unusual that in a period of rising prices we would be able to post favorable fuel supply results but also a fairly good retail margin as well. And that dynamic is playing out again in the month of April too.

Pooran Sharma: Appreciate the color there and the thoughts on that. I wanted to get more specific on what you have seen thus far through April. The 5¢ or so of PS&W margin—does that include the current price spikes that we have seen up since the start of the quarter? Do you expect some normalization from those price spikes from RBOB? Just wanted to get a better understanding of the RBOB commentary.

Malynda K. West: It reflects what we think we know at this point with books not closed. You can appreciate there are a lot of moving pieces with that fuel supply part of the business. So all that we are really comfortable commenting on now—we know that retail margins are around 30¢ a gallon or in the low 30s, and we are going to be in the range of 35 to 40. And that is counting all of the volatility that we have seen, the price rises that we have seen, both on the retail side when I say retail margin, but also the product supply and wholesale side.

But appreciate that this part of the business can make large swings from day to day. And until we close the books, we really do not know where we are precisely.

Pooran Sharma: I appreciate that, and thank you for the color.

Operator: The next question comes from the line of Cory Tarlow with Jefferies. Your line is now open. Please go ahead.

Corey Tarlowe: Yeah. Thanks. Mindy, was just wondering if you could walk through the trends that you saw by month in the quarter? And the reason I ask is because I believe you were lapping some pretty significant storms from the prior year. So I was wondering if you could talk about volume and merchandise trends, maybe on a monthly basis, to kind of give us more color on what you saw throughout the quarter?

Malynda K. West: Yes. Started the year fairly strong. But, again, completely different fuel environment. So you can appreciate that price-sensitive customer was not quite as price sensitive, so we definitely saw some momentum as we got into March that we did not see in January, February. And then on the fuel side, obviously, the margin exploded during the month of March. It was challenged when we looked at January and February. I apologize. I did not bring month-by-month comparisons, but over the course of the quarter, when we saw the volatility return to the market, we saw customers behaving differently inside our stores. They were pressured, but they were still spending money, especially on the nondiscretionary part of the basket.

And then, obviously, the fuel volume will come with time. It just has not had enough time to season for that customer to really return in droves. But the loyalty sign-ups that we are seeing are a really key leading indicator for us that tells us that we are going to gain momentum, especially as we go into the summer, if prices are still high.

Corey Tarlowe: Got it. And then just on the PS&W business, and, again, I recognize it is only a month of data. But as you think about the close to 10 that we saw in Q1, and the close to kind of 5 or thereabouts where you are seeing so far in April, could you just talk to the driver behind that change—specifically if there is anything meaningful to call out? Is it the variability within pricing? Curious what you saw.

Malynda K. West: Yeah. It is the variability within the price environment. The direction of the price movements were magnified in the month of March in particular. While we are continuing to see prices rise in the month of April, it has not been as dramatic. And so you would not expect product supply and wholesale results in that month to be as strong as what they were in March. And then, again, I certainly cannot extrapolate that out over the full quarter. Remains to be seen.

Corey Tarlowe: Got it. Thanks so much. Appreciate the help. Best of luck.

Operator: There are no further questions at this time. I will now turn the call back to Malynda K. West for closing remarks.

Malynda K. West: Thank you so much for your participation today and for your interest in Murphy USA Inc. I hope you are getting a better understanding that the first quarter results were not simply a byproduct of volatility and the price-related impact because our team works really hard to optimize that volume-margin relationship. We are also seeing benefits in the work we have done to make merchandise and store operations more resilient. Sitting here last quarter, we talked about what a return to volatility could mean. Did not see it happening really at all this year, much less so much so fast. Obviously, a lot can change just in a few months. That says the reverse can also happen.

So we are not relaxing because the macro is going our way. What did we emphasize in the first quarter? Emphasized improving the business. What are we focused on now? The same thing. Volatility does work in our favor, and you can see that in our results, but we cannot rely on volatility. We talked about it in some of these questions. Our focus has not changed since last quarter. We are not relaxing because the environment has improved. We cannot. We have work to do to grow the business. We are very happy with our new store pipeline. So high-quality growth is going to continue in the years ahead.

We also have work to do to continue to improve our existing business, and we are excited to get after it. I know all of us here are energized, excited to do the work, to build the business, and take Murphy USA Inc. to the next level. Which is why we will continue to focus on what we can control. We are going to execute with precision and continue to grow our business and make it better. So thanks, everyone, and we will talk again next quarter.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.