“Based on this strong first quarter performance, we are raising our guidance for 2011 for same-store merchandise sales growth to a range of 3.0-5.5%, and we also are raising the lower end of our guidance range for new dealer sites to a minimum of 20,” says Susser CEO.
Retail net merchandise margin for the three months ended April 3, 2011, was 34%, up from 32.7% in the same quarter last year. Average retail gallons per store per week increased 3.2% year-over-year. Retail fuel margins increased to 15.3 cents per gallon, versus 11.1 cents a year ago.
Adjusted EBITDA increased 66.5% from a year ago to $23.1 million in the latest quarter, driven by higher margins from both retail and wholesale fuel sales and from merchandise. Total gross profit was $115.7 million, an increase of 18.5% from the first quarter of 2010.
Total revenues were $1.2 billion – a 24.6% increase from a year ago – which is the result of a 29.5% increase in combined retail and wholesale fuel revenues and a 6.3% increase in overall merchandise sales.
The Company reported a net loss of $23,000, or $0.00 per diluted share in the first quarter – which is one of its two seasonally weakest quarters – versus a net loss of $5.0 million, or $0.29 per diluted share, in the same quarter last year.
“During the first quarter we continued to benefit from a steady increase in fuel volumes, same-store merchandise sales and merchandise gross profit margin,” said Sam Susser, president and CEO. “Based on this strong first quarter performance, we are raising our guidance for 2011 for same-store merchandise sales growth to a range of 3.0-5.5%, and we also are raising the lower end of our guidance range for new dealer sites to a minimum of 20.”
He noted the chain’s West Texas stores continued to lead the growth, driven by accelerating oil and gas activity in the Permian Basin and the completion in March of its Town & Country rebranding program. South Texas also delivered same-store sales growth, albeit at a slower pace, with the majority of those markets enjoying increased traffic in the first quarter, reflecting steady economic improvement. Average fuel gallons per week sold at the chain’s convenience stores continued to grow, after contracting slightly in the first quarter last year. Both retail and wholesale diesel gallons were significantly higher, which is evidence of increased freight movement and stronger overall commercial activity in Texas.
“Many of our customers continue to be value conscious, but we’re successfully growing merchandise sales and margins through diligent cost management, improved shortage control and a more favorable mix of higher-margin food service and beverage sales,” Susser added.
Susser Holdings opened two large-format retail stores during the first quarter and closed one smaller store, raising the total number of retail stores in operation at April 3 to 527. Two additional new-build stores were opened, a third acquired location was remodeled and opened and one smaller store was closed in the second quarter, bringing the current retail store count to 529. Five additional Stripes convenience stores are currently under construction.
In its wholesale fuel business, Susser added five new dealer sites and discontinued supplying four sites, for a total of 432 dealer locations at the end of the first quarter. Six additional sites have been added to the wholesale network so far during the second quarter.
In April, the Company generated proceeds of $3.7 million from a sale-leaseback transaction for one recently completed convenience store. In addition, Susser completed a $20 million long-term mortgage facility in early May with a regional bank.
First Quarter Highlights
Merchandise – Total merchandise sales increased by 6.3% from a year ago to $203.0 million. Same-store merchandise sales increased by 5.6%, compared with a 2.5% increase in same-store sales in the first quarter of 2010. Net merchandise margin was 34%, versus 32.7% a year ago. The margin improvement was led by increased contributions from packaged drinks and food service. Merchandise gross profit increased by 10.6% over last year to $69.0 million.
Retail Fuel - Retail fuel volumes were 4.5% higher than a year ago at 191.3 million gallons for the first quarter. Average gallons sold per store per week were up 3.2% versus the first quarter of last year to 28,207 gallons. Revenues from retail fuel totaled $618.1 million – an increase of 29.1% year-over-year – which is the result of a 62-cent-per-gallon increase in prices at the pump, along with the increased gallons sold. Retail fuel gross margin averaged 15.3 cents per gallon in the latest quarter, or 10.3 cents per gallon after deducting credit card expense, versus 11.1 cents a gallon a year ago, or 7.0 cents a gallon after credit card expense. Retail fuel gross profit was 44.5% higher year-over-year, at $29.3 million.
Wholesale Fuel – Wholesale fuel volumes sold to Susser’s more than 430 dealers and other third-party customers increased 0.8% from a year ago to 121.0 million gallons, with higher diesel volumes offsetting slightly lower unleaded gasoline volumes. Wholesale fuel revenues were up 30.3% from a year ago to $336.4 million, which reflects a 63 cent-per-gallon increase in selling prices. Wholesale gross margin was 5.1 cents per gallon, versus 4.2 cents per gallon a year ago. As a result, wholesale fuel gross profit increased by 23.5% to $6.2 million.
Source: Susser Holdings Inc.