How much energy does Susser Holdings
That's not to say its results were bad. Revenue increased almost 7%, to $692.8 million, and operating income rose almost 9%, to $9.2 million. Per-share earnings are difficult to compare, since the company has more shares outstanding now than a year ago, as a result of its initial public offering. Speaking of which, it was nice to see the company use some of the proceeds from the stock offering to repay high-cost debt, thereby slashing its interest expense.
The only sticking point? Despite an 11.8% increase in merchandise sales (6.4% on a same-store-sales basis), fuel still accounted for almost 84% of the top line. The company operates gas stations and convenience stores, and it sells food in Texas and Oklahoma. It also sells the fuel wholesale. Many customers buy gas and other items from the company because it's quick and easy, despite higher prices than discount vendors such as Wal-Mart
All in all, this is not a bad business. But with the summer driving season ending soon, and gas prices abating across much of the country, Susser may have trouble achieving substantial growth. Its Laredo Taco restaurants, with eight new stores in operation and another seven under construction, are doing well, so that's good news. But the company also benefited from a higher cigarette sales tax in Texas, and I'm eager to see whether the company can continue its current pace going forward, when the benefit wears off.
Susser is a small operator, lacking the geographic diversity of rivals such as Valero
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Fool contributor Larry Rothman is happy to receive feedback, and he promises to read it when he's not being wrestled by his three children. Feel free to email him at [email protected]. He doesn't have any positions in the companies mentioned.