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Susser Holdings Corporation (SUSS)
Q4 2008 Earnings Call
February 26, 2009 11:00 am ET
Chip Bonner – Executive Vice President
Sam Susser – President and CEO
Steve DeSutter – President and CEO of Retail
Mary Sullivan – Executive Vice President and CFO
Ben Brownlow – Morgan Keegan & Company
Anthony Lebiedzinski – Sidoti & Company
Jeff Blaeser – Morgan Joseph & Co
Andrew Berg – Post Advisory Group
Mike Smith – Kansas City Capital
James Berman – JB Global
Previous Statements by SUSS
» Susser Holdings Corporation Q2 2009 Earnings Call Transcript
» Susser Holdings Corporation Q1 2009 Earnings Call Transcript
» Susser Holdings Corporation Q3 2008 Earnings Call Transcript
At this time, I would like to turn the conference over the Mr. Chip Bonner, Executive Vice President, please go ahead, sir.
Thank you. Good morning, everyone, thank you for joining us. This morning we released our fourth quarter 2008 earnings and our news release was broadcast to our email list. If you would like to be added to our list, please contact our investor relation firm, DRG&E at (713) 5296600 or send your request via the IR page of our website and we will be glad to add you. A replay will be available both on the web and via telephone replay. To access the replay on the web, go to our IR page at www.susser.com. You will find the phone number and an access code in the earnings release if you would like to listen by phone.
Today's call contains various forwardlooking statements and includes information that is based on management's beliefs and assumptions. It includes Susser's objectives, targets, plans, strategies, costs, and anticipated capital expenditures. These statements involve risk and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in our 2007 10K and our subsequent 10Q filings. Please note that we expect to file our 2008 10K on March 13.
We will discuss certain nonGAAP financial measures that we believe are helpful to a full understanding of our financial condition. Please refer to our news release, which includes a reconciliation of each financial measure. Information reported on this call speaks only to the company's view as of today, February 26, 2009, so time sensitive information may no longer be accurate at the time of any replay. Now, I will turn the call over to Sam Susser, our President and CEO.
Thanks, Chip, and good morning to everyone. Also with me on the call are Steve DeSutter and Mary Sullivan and other members of our management team. Let me begin by saying that even though we faced headwinds throughout last year, 2008 was the best year in our history. We achieved near record growth across most of our categories.
This was despite natural yet significant challenges associated with the integration of Town and Country; the start of a national recession that depressed commercial activity and consumer demand; record high gasoline prices that reduced demand for gasoline and diesel, especially along the U.S.Mexico border; Hurricane Dolly; and Hurricane Ike which directly hit our gulf coast area in the third quarter and required us to temporarily close a number of stores.
Hurricane Ike further interrupted fuel supply by nearly shutting down most of the Houstonbased refining and pipeline and distribution system for several weeks. Fuel supply was also challenged earlier in the year by an explosion at a significant west Texas refinery we had relied on to supply a meaningful portion of our newly acquired west Texas stores.
If all that wasn't enough to keep us hopping, we also remodeled a former WalMart facility to create a new retail support center and corporate headquarters. During this past summer, we consolidated four offices in Corpus Christi along with some staff from west Texas into the new facility. I am very proud of our entire team for keeping their focus on our customers despite the challenges and despite the unexpected twists and turns. Our team made 2008 a great, great year for us. That said, our focus is now on 2009 and on the future.
Let's go ahead and talk about that. We have provided guidance for same store sales growth of 3% to 5.5% and retail fuel margins of 12.5 to 16.5 cents per gallon. This is slightly lower than prior year's performance. This is not because we are seeing significant weakness in either of our geographic regions, but because we think it's smart to be a little more conservative in our planning given the recessionary pressures and the credit crunch impacting the global economy.
Our region has certainly felt these pressures and the impact of falling energy and falling commodity prices. Texas is not an island, and our local markets are seeing the impact of the economic downturn. There has been marked reduction in new home construction in many of our markets and we are concerned about trends in manufacturing, international trade, and unemployment.
However, job data and real estate statistics suggest that the Texas economy is holding up much better than the national economy. For example, in 2008, Texas added over 150,000 new jobs, which accounts for 71% of all the positions created in the 15 states in this country that added jobs.
To date, our underlying merchandise sales trends that our stores remain healthy; and we believe our region has numerous opportunities for new store development and selective acquisitionrelated growth in the coming years. We are enhancing our systems and strengthening our team, and we believe we will be one of the retailers that comes through the recession with a stronger market position and a foundation for additional growth.