Murphy USA Inc. (MUSA) Earnings & Analysis

Latest quarter

Murphy USA reported Q3 FY2026 revenue of $6.9 billion, above the $6.1 billion consensus, and adjusted earnings per share of $9.59, above the $8.09 consensus. Revenue rose from $5.1 billion a year earlier, while diluted earnings per share increased from $6.76.

The company’s filing attributed the revenue increase primarily to higher retail fuel prices, alongside higher retail fuel volumes, fuel supply revenue and merchandise sales. Total fuel contribution rose to $479.4 million, with higher supply margins and volumes partly offset by lower retail fuel margins. The filing said merchandise sales increased 2.9%, but merchandise contribution fell 2.8%, primarily because a nicotine-pouch promotion from the prior-year quarter did not repeat.

Murphy USA reported net income of $176.0 million, compared with $129.9 million a year earlier. The filing said higher fuel contribution and the absence of prior-year restructuring expenses helped results, while higher operating expenses, taxes and other costs partly offset those benefits. Gross margin fell to 10.4% from 12.3%, and operating margin declined to 3.78% from 3.95%. Free cash flow increased to $194.7 million from $68.2 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On the earnings call, CEO Malynda K. West said higher fuel prices were making customers more price sensitive and that Murphy USA had gained share on both total gallons and a same-store basis. She said October volumes were at 100% of the prior year despite hurricane activity that temporarily closed a large percentage of stores.

Asked about retail margins, West said fuel prices rose through much of the quarter, forcing retailers to catch up with higher costs. In the latter half of September, she said, elevated prices combined with a price decline gave Murphy USA room to create price separation and increase both margin and volume. She expected tight supply and elevated volatility to continue into 2027, although she said she did not know what would happen to pricing.

West also explained that renewable fuel credit prices are largely passed through in supply costs, though rapid changes can have a temporary effect. In a tight supply environment, she said, the company’s sourcing options allow it to acquire fuel more cheaply than purchasing at the rack. She expected the product supply and wholesale business to earn more than the $0.02 to $0.03 it expects in a normalized environment.

On competition, West identified Colorado and Florida as markets with volume pressure. She said higher margins in Colorado were more than offsetting declining gallons, while seven of the company’s top ten states showed same-store growth. Discussing nicotine, she said the category remained promotional as customers tried different products.

For investment, West said the company had more than 100 automated restaurant units in the market as a test of customer demand, operating fit and store economics. She said it was “too early to comment on any scalable performance potential.” On the store pipeline, she said timing remained difficult to predict for openings around year-end and that it was “too soon to tell how lumpy the pipeline is going to be in 2027.”

Guidance

West said Murphy USA now expects FY2026 operating expenses to end below its previous guidance. She expects some expense catch-up in Q4, partly as the company laps maintenance initiatives introduced in the prior year. West said the company intends to sustain its cost advantages next year.