Susser Holdings Corporation
) second-quarter earnings of 66 cents missed the Zacks Consensus
Estimate by 32.0%. Earnings, however, went up 11.8% from the
prior-year level backed by higher revenues and margins.
Susser Holdings has more than 600 Stripes and Sac-N-Pac retail
stations selling gasoline, diesel fuel and convenience store items
across Texas, New Mexico and Oklahoma. The company also provides
restaurant services at more than 400 of its Stripes locations,
mainly under its Laredo Taco brand. Additionally, Susser Holdings
is a majority owner in Susser Petroleum Partners L.P. (
), one of the largest wholesale fuel distributors in Texas.
Susser Holdings' net sales of $1.9 billion beat the Zacks
Consensus Estimate by 5.6%. Revenues went up 19.7% year over year
to $1.9 billion backed by sales growth in all the three segments.
Categories like fresh food, beer and packaged drinks showed
improved sales during the quarter.
Gross profit increased 14.7% to $192.7 million backed by
merchandise and fuel sales growth. Fuel represented 36% of gross
profit. Operating income went up 22.2% to $33.4 million due to
lower operating expense.
Net sales went up 15.8% year over year to $318.2 million. While 3%
of sales came from stores which were opened more than a year ago,
the remaining increase came from stores which were opened in the
last four quarters. Same-store merchandise sales was 4% higher
compared with the year-ago level backed by higher customer traffic
and transaction size led to strong same-store sales during the
quarter. Easter sales also helped in the increase.
Gross profit increased 14.4% year over year to $107.7 million
higher sales in new stores and food service outlets. Net
merchandise margin shrank 50 basis points to 33.8%, due to timing
difference in rebate recognition during fiscal 2013.
Net sales went up 15% year over year to $926.7 million backed by
increased gallons sold during the quarter. Higher average selling
price of fuel also led to higher revenues during the quarter.
Excluding the impact of recent acquisition of Sac-n-Pac stores,
retail fuel sales went up 2% year over year.
Segment volume grew 11.8% year over year to 263.9 million
gallons. Average fuel gallons sold during the quarter went up
2% during the quarter compared with 5.5% in the prior-year level.
The company is experiencing volume slowdown mainly due to stiff
competition in the industry. Including the recently acquired
Sac-N-Pac stores, average retail gallons per store declined 0.4%
(in line with management's expectation), due to Sac-N-Pac's smaller
average store size and lower fuel volumes.
Gross profit increased 15.1% year over year to $49.5 million
backed by higher volume. Retail fuel gross margin went up 50 basis
points to 18.7%
Net sales went up 30.5% to $614.7 million due to higher volumes
sold, coupled with higher selling price of fuel, during the
quarter. Volumes sold to third parties - which includes all gallons
except those distributed to Susser's retail stores - went up 27.5%
year over year to 199.1 million gallons. Gross profit increased
21.2% year over year to $20.7 million due to increased gallons sold
including the impact of the Gainesville Fuel acquisition, and 0.4%
increase in third-party margin per gallon.
Susser Holdings opened five large-format Stripes convenience
stores and acquired two existing stores during the
quarter. The company operated 636 convenience stores, of which
408 included a restaurant, primarily Laredo Taco Company as of Jun
29. Four of these stores were opened during the second
quarter, and 17 Stripes stores are currently under
In the wholesale segment, Susser Holdings opened 11 contracted
sites during the quarter while discontinuing 624 contracted branded
The company completed sale leaseback transactions with Susser
Petroleum Partners LP for six Stripes locations in the second
quarter for $31.0 million.
In April, Susser Holdings agreed to divest itself to natural gas
transportation and storage partnership Energy Transfer Partners
) for about $1.8 billion in cash and stock. The transaction,
expected to conclude in the third quarter, will provide Energy
Transfer the general partner interest and incentive distribution
rights in Susser Petroleum Partners and 50.2% of its common units,
in addition to Susser Holdings' retail operations. (Read more:
Energy Transfer to Snap Up Susser Holdings for
). On Aug 28, stockholders of Susser Holdings will vote on the
proposed merger agreement.
Susser Holdings currently carries a Zacks Rank #4 (Sell). A
better-ranked stock in the same sector is The Pantry Inc. (
) sporting a Zacks Rank #1 (Strong Buy).
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