Executive Summary

Mixed headline: Adjusted EBITDA beat but EPS and revenue (ex excise) missed consensus as low price/low volatility constrained fuel margins; Q3 Adjusted EBITDA was $285.1M vs $276.2M consensus (beat), EPS $6.76 vs $6.95* (miss), revenue ex excise $4.50B vs $5.08B* (miss) . Values with * retrieved from S&P Global.
Merchandise was the standout: contribution +11.3% to $241.2M on 21.5% unit margin (vs 20.0% LY), led by nicotine promotions and improving center-store trends .
Guidance tightened: full-year merchandise contribution raised to $870–$875M, fuel volumes lowered to 235–237K gal APSM, OPEX/SG&A reduced, tax rate narrowed; capex maintained .
Capital allocation catalysts: 19% dividend hike to $0.63, new up-to $2.0B repurchase authorization through 2030, reinforcing 50/50 growth/returns framework; CEO transition to Mindy K. West effective Jan 1, 2026 underscores continuity .
Fuel profitability resilient despite trough conditions: all-in margin 30.7 cpg (retail 28.3 cpg) vs 32.6 cpg LY; management cites structural uplift offset by unusually flat pricing; October quarter-to-date commentary points to margin/volume responsiveness when volatility returns .

What Went Well and What Went Wrong

What Went Well
- Merchandise outperformance: contribution +11.3% to $241.2M with unit margin up 150 bps YoY to 21.5%, driven by outsized nicotine promotions and +~5% center-store margin growth .
- Cost discipline: SG&A fell to $55.3M (vs $60.0M LY); store OPEX/ASPM +3.0% YoY despite network growth; restructuring sets a leaner run-rate .
- Capital return continuity: 19% dividend increase to $0.63 and new $2.0B buyback authorization; management reaffirmed 50/50 framework and leverage target ≤2.5x LT .
What Went Wrong
- Fuel margin compression and flatness: total fuel cpg 30.7 vs 32.6 LY; retail cpg 28.3 vs 31.9 LY; unusually low volatility limited “value capture” and volume opportunities .
- Volume softness on a comparable basis: SSS fuel per store down 2.6%; APSM down 1.8% as sub-$3 prices reduce elasticity and convenience dominates trip choice .
- EPS miss: $6.76 vs $6.95* consensus, pressured by lower fuel margins, $12.6M restructuring charge (~$0.49 per diluted share after tax) and higher D&A/interest . Values with * retrieved from S&P Global.

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Total Operating Revenues ($B)	$5.239	$5.005	$5.110
Revenue (ex excise) ($B)	$4.637 (5.239–0.601)	$4.405 (5.005–0.600)	$4.496 (5.110–0.614)
Net Income ($M)	$149.2	$145.6	$129.9
Diluted EPS ($)	$7.20	$7.36	$6.76
Adjusted EBITDA ($M)	$285.6	$286.0	$285.1
Total Fuel Contribution (cpg)	32.6	32.0	30.7
Retail Fuel Margin (cpg)	31.9	29.2	28.3
Merchandise Contribution ($M)	$216.8	$218.7	$241.2
Merchandise Unit Margin (%)	20.0%	20.0%	21.5%

Segment and key drivers

Metric	Q3 2024	Q2 2025	Q3 2025
Total Retail Fuel Contribution ($M)	$395.7	$359.1	$354.5
PS&W Contribution ($M)	$(24.2)	$(25.9)	$(31.4)
RINs ($M)	$32.7	$59.8	$61.7
Total Fuel Contribution ($M)	$404.2	$393.0	$384.8
Retail Gallons – Chain (MM gal)	1,239.3	1,229.3	1,254.3

Operating KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Fuel Vol/Store (K gal APSM)	248.4	241.6	244.0
Fuel Vol/Store (K gal SSS)	245.2	239.3	241.7
Merchandise Sales ($K SSS)	$211.4	$210.5	$214.1
Store OPEX ex fees & rent ($K APSM)	$36.1	$36.1	$37.2
SG&A ($M)	$60.0	$50.9	$55.3
Store Count (end of period)	1,740	1,766	1,772

Notes: Q3 included a $12.6M restructuring charge (~$9.5M after-tax; ~$0.49 per diluted share) . Adjusted EBITDA excludes restructuring and other non-operating items per reconciliation .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
New Stores	FY25	Up to 50	45 or more	Lowered/tightened
Raze-and-Rebuilds	FY25	Up to 30	23–24	Lowered
Retail Fuel Vol/Store (K gal APSM)	FY25	240–245	235–237	Lowered
Merchandise Contribution ($M)	FY25	$855–$875	$870–$875	Raised/tightened up
Store OPEX ex fees & rent ($K APSM)	FY25	$36.5–$37.0	$36.2–$36.6	Lowered
SG&A ($M)	FY25	$245–$255	$230–$240	Lowered
Effective Tax Rate	FY25	23%–25%	23.5%–24.5%	Narrowed
Capital Expenditures ($M)	FY25	$450–$500	$450–$500	Maintained
Quarterly Dividend/Share	Q4-25	$0.53 (Q3)	$0.63 (declared)	Raised (19%)
Share Repurchase Authorization	Through 2030	$1.5B (rem. ~$358.7M)	New up to $2.0B	Increased authorization

Drivers: lower volatility dampening fuel volumes; stronger nicotine promotions lifting merchandise; labor/loss prevention initiatives and restructuring reduce OpEx/SG&A; discrete tax items and energy tax credits lower ETR; build programs on track .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Fuel environment & margins	Q1: total fuel cpg 25.4; supply margins below plan . Q2: all-in 32.0 cpg; low volatility persists .	All-in 30.7 cpg; “trough” with unusually flat pricing; structural margin uplift vs prior cycles; October showed margins ~low-30s cpg when volatility appeared .	Structural resilience; awaiting normalization
Merchandise & nicotine	Q1: contribution +2.3% to $195.9M; nicotine +2.8% dollars . Q2: +1.0% to $218.7M .	+11.3% to $241.2M; nicotine promos (e.g., pouches) drove >20% nicotine; center-store margin +~5% .	Strengthening
Cost/OPEX discipline	Q1: SG&A $60.1M (down); OPEX up on labor/maintenance . Q2: SG&A down $8.2M YoY; OPEX/ASPM +1.7% .	Restructuring ($12.6M) to streamline; FY25 OPEX and SG&A guidance lowered .	Accelerating efficiencies
Capital returns	Q1: dividend raised to $0.50 . Q2: dividend paid $0.50 .	19% dividend hike to $0.63; new $2.0B buyback; reaffirmed 50/50 strategy, leverage ≤2.5x LT .	Increased pace
Store growth pipeline	Q1: 8 NTIs; 14 under construction . Q2: 6 opened; 39 under construction .	8 NTIs; 40 under construction; on track ≥45 FY25, 50+ in 2026 .	Accelerating
Tax credits/policy	—	Bonus depreciation and “One Big Beautiful Bill” seen funding reinvestment .	New tailwind
Regulatory/legal	Ongoing nicotine legislative risk disclosed .	Risk factors reiterated (nicotine, EVs, cybersecurity, macro) .	Stable disclosure set

Management Commentary

“Take away three things from today’s call: continuity, resilience, and momentum.” — CEO Andrew Clyde .
“We are pleased with the third quarter… EBITDA was $285 million, virtually flat to the prior year despite all-in margins running about $0.02 lower.” — Mindy K. West, President & COO .
“We firmly believe the current margin structure includes $0.03 to $0.04 of structural uplift since 2022… which would translate to materially higher fuel contributions in a return to normal environment.” — Mindy K. West .
“Nicotine promotional dollars have grown at a very impressive 12% CAGR since 2020… performance that we would expect to replicate going forward.” — Mindy K. West .
Capital allocation: “Board approved a new $2 billion repurchase program… [and] continue to grow the dividend payout 10% annually… with an additional 10% increase… to $0.63 per share.” — Management .

Q&A Highlights

Fuel margins cadence/elasticity: October’s brief run-up (refinery downtime) showed ability to expand margins into mid-30s cpg and lift volumes to ~100% of prior year; volumes lag in sub-$3 price, low-volatility environments where convenience outweighs price sensitivity .
Nicotine promotion (e.g., ZYN) impact: Manufacturer-funded promos leverage MUSA’s above-industry loyalty and upsell; halo to center-store exists but core benefit is within nicotine; nicotine pouches running ~120% of prior year in October .
Capital allocation/leverage: Reaffirmed 50/50 framework with flexibility to lean above 2.5x leverage near-term (covenants at 3x) to capitalize on dislocations; prior $1.5B done in just over three years .
Cost structure: One-time restructuring a major reset; further opportunities in automation, workflow streamlining, and loss prevention/labor model execution to sustain lower SG&A/OpEx .
Capex outlook: FY26 guidance coming in February; bonus depreciation expected to fund incremental reinvestment; balancing NTIs vs remodels/R&R .

Estimates Context

Metric (Q3 2025)	Consensus*	Actual	Surprise
EPS (Primary, $)	$6.95*	$6.76	-$0.19 (miss)
Revenue ex excise ($B)	$5.08*	$4.50 (5.110–0.614)	-$0.58B (miss)
Adjusted EBITDA ($M)	$276.2*	$285.1	+$8.9M (beat)
# of estimates (EPS/Revenue)	6 / 8*	—	—

Drivers vs consensus: EPS pressured by lower retail fuel margins and restructuring, partly offset by strong merchandise and lower SG&A; revenue softness reflects lower petroleum pricing and SSS fuel declines amid trough conditions; EBITDA benefited from merchandise strength and cost control .
Values with * retrieved from S&P Global.

Key Takeaways for Investors

Core EBITDA power intact in trough: flat YoY Adjusted EBITDA on 2c lower fuel margins underscores structural uplift and self-help; normalization in volatility could unlock upside .
Inside momentum should persist: nicotine promotions, loyalty capabilities, and improving center-store trends support higher merchandise contribution into Q4 and FY26 pipeline .
Expense discipline is compounding: restructuring plus field initiatives lower SG&A and OPEX run-rates, enhancing operating leverage when fuel recovers .
Capital return visibility: dividend +19% and $2.0B buyback authorization provide a durable shareholder return cadence through 2030, balanced with ≥45 FY25 NTIs and 50+ in 2026 .
Near-term trading setup: narrative hinges on any rebound in fuel price volatility and holiday traffic; October read-through shows quick responsiveness to margin opportunities .
Medium-term thesis: leverage disciplined 50/50 allocation, structural fuel margin gains vs prior cycles, and accelerating store growth to sustain EPS/FCF compounding, with risk balanced by conservative LT leverage target .
Watch items: nicotine regulatory trajectory; competitive entry in select markets; execution on accelerated NTI/R&R build plan and ongoing cost programs .

Asterisk note: Values marked with * are Wall Street consensus figures retrieved from S&P Global.

Murphy USA Inc. (MUSA)·Q3 2025 Earnings Summary