Irene Nattel

Irene Nattel sought clarification on Murphy USA's strategy to invest 1-2 cents/gallon on the street this year while still anticipating 1%-3% same-store volume pressure. She also asked about the outlook for the nicotine environment in 2026 and beyond, following bright spots in the previous year.

Answer

Mindy West, President and Chief Executive Officer, confirmed the strategy of investing 1-2 cents/gallon to protect competitive position and maintain volumes amidst lower-price environments, acknowledging continued volume pressure. Regarding nicotine, Ms. West highlighted Murphy USA's role as an ideal retailer for manufacturers, emphasizing promotion-driven sales and continued market share gains in cigarettes. She noted strong growth in other nicotine categories like pouches and anticipated accelerated promotional funding in guidance, though not duplicating a specific one-off promotion from last year.

Irene Nattel sought clarification on Murphy USA's strategy to continue investing 1-2 cents per gallon on the street this year, despite anticipating 1%-3% same-store volume pressure. She also asked for insights into the expected nicotine environment for 2026 and beyond, building on the bright spots observed last year.

Answer

Mindy West, President and CEO, confirmed that Murphy USA will continue to invest 1-2 cents per gallon to protect its competitive position and maintain volumes in a lower-price environment, acknowledging the expected volume pressure. For nicotine, she highlighted Murphy USA's role as an ideal retailer for manufacturers, emphasizing a promotion-driven approach. She noted strong performance in promotions, continued market share gains in cigarettes, and robust growth in other nicotine categories. While not expecting to duplicate a unique promotion from last year, the company's guidance includes accelerated promotional funding.

Irene Nattel from RBC Capital Markets inquired about the nature of discussions with vendors regarding promotional support for 2025 and the outlook for underlying price inflation from those vendors.

Answer

CEO Andrew Clyde stated that vendors value Murphy USA for its high, stable volumes, and discussions focus on mutual growth rather than just price. He noted that digital transformation initiatives have also yielded benefits in contract management. On inflation, Clyde sees it as a wildcard but believes the company is well-positioned due to its value proposition. CFO Galagher Jeff added that enhanced rewards programs allow for better customer targeting in an inflationary environment, turning it into a potential advantage.

Irene Nattel inquired about current consumer behavior, particularly among low-income shoppers, and what the rewards program reveals about spending habits. She also asked about the promotional strategy for fiscal 2026 and the upcoming summer months.

Answer

CEO Darren Rebelez stated that the overall consumer is resilient, with traffic holding up across income levels. He noted a distinction within the low-income cohort between stretched families and younger, early-career individuals with different spending habits. For FY26 promotions, he highlighted the return of the popular BBQ brisket pizza LTO, continued strength in hot sandwiches, and the value proposition of the bakery category as an alternative to higher-priced candy.

Irene Nattel asked about current consumer behavior, particularly among different low-income cohorts, and what the Casey's Rewards program is revealing about spending patterns. She also inquired about the promotional strategy for fiscal 2026.

Answer

President and CEO Darren Rebelez described the consumer as resilient, noting a distinction within the low-income cohort between stretched families and younger, early-career individuals with different spending habits. He stated that promotional plans for FY26 will continue to leverage food as a traffic driver, highlighting the return of the popular BBQ brisket pizza LTO and the value proposition of the bakery category.