Murphy USA Inc. (NYSE:MUSA) delivered a standout first-quarter performance that thumped analyst expectations, driven by a sharp rebound in fuel margins and strength in its core nicotine merchandise category. The results, released after market close on April 29, sent shares of the convenience store and fuel retailer climbing in after-hours trading, adding to a solid run that has seen the stock gain over 4.5% in the past month ahead of the report.
Key Highlights and Financial Performance
For the three months ended March 31, 2026, Murphy USA reported net income of $136.3 million, or $7.28 per diluted share. This more than doubled the $53.2 million, or $2.63 per diluted share, recorded in the same period a year ago.
Total fuel contribution came in at 35.0 cents per gallon (cpg), a 37.8% jump from 25.4 cpg in Q1 2025. The company noted that its fuel supply business, which benefits from rising prices, contributed 9.6 cpg versus just 1.7 cpg a year earlier. Total retail gallons rose 2.1% year-over-year, though same-store sales (SSS) volumes dipped slightly by 0.8%.
On the merchandise side, contribution dollars rose 7.3% to $210.2 million, fueled by a standout performance in nicotine products which saw SSS contribution increase 9.2% to $20.2K per store per month. This offset weakness in non-nicotine discretionary categories, where SSS contribution slipped slightly to $19.7K from $19.9K.
Adjusted EBITDA surged 76.5% to $277.9 million from $157.4 million.
Earnings Per Share and Revenue: A Clean Beat
The headline figures easily surpassed consensus estimates compiled before the release. Analysts had predicted earnings per share (EPS) of $5.01, while the company delivered a staggering 45.3% upside to that number. It was a similar story on the top line: reported revenue of $4.82 billion comfortably topped the estimated $4.71 billion.
Key numbers vs. estimates (Q1 2026):
- Reported Revenue: $4.82 billion vs. Estimated: $4.71 billion
- Reported Non-GAAP EPS: $7.28 vs. Estimated: $5.01
Much of the outperformance relative to expectations can be attributed to the volatile commodity market backdrop. The company highlighted that the reintroduction of volatility into refined product markets allowed its low-cost, high-volume model to shine, driving margins far higher than the benign environment of the prior year. The fuel supply business, which generated $39 million in contribution versus a loss of $15.3 million last year, was a particularly powerful swing factor.
Operating Expenses and Shareholder Returns
While revenue and profit surged, the company managed costs effectively. Total store and other operating expenses rose 5.1% to $279.8 million, largely a function of new store openings and higher employee costs. However, on a per-store-per-month basis excluding payment fees and rent, costs were essentially flat at $35.2K. Selling, general, and administrative (SG&A) costs actually declined by $3.5 million to $56.6 million.
Murphy USA continues to return substantial capital to shareholders. During the quarter, it repurchased approximately 169,000 shares for $70.9 million at an average price of $419.87. It also paid a quarterly dividend of $0.63 per share, or $2.52 annualized. The company has $2.0 billion in capacity under a new share repurchase authorization that runs through 2030, effective upon completion of its current $1.5 billion authorization.
Outlook and Forward Estimates
Management provided an encouraging tone on the near-term outlook during the release. "Importantly, the strength we saw in March has carried through into April, where volumes are running roughly flat to prior year with all-in fuel margins for the month expected to be between 35 and 40 cpg," said President and CEO Mindy West.
This guidance solidifies the bullish narrative heading into the second quarter. For Q2 2026, analysts are currently modeling revenues of approximately $5.28 billion and EPS of $7.93. For the full fiscal year 2026, the consensus calls for sales of $20.33 billion and EPS of $25.58. The company reiterated its expansion plans, aiming to open between 45 and 55 new stores this year, with 28 stores already under construction at the end of Q1.
Market Reaction
Despite a strong pre-earnings rally, the positive after-market reaction suggests the depth of the beat surprised even the bulls. At the time of writing, the stock is trading flat in after-hours action, but the clear earnings beat coupled with the upward momentum in April’s trading data offers a solid foundation for the session ahead.
The robust performance underscores Murphy USA’s ability to capitalize on margin expansion during periods of commodity volatility—a dynamic that sets it apart from many peers burdened by higher operating leverage. With a healthy balance sheet featuring $118.6 million in cash and $750 million of undrawn revolver capacity, the company is well positioned to continue its aggressive growth and share buyback program.
For more details on Murphy USA Inc.'s historical earnings performance and forward-looking projections, view the full earnings history and analyst estimates here:
Disclaimer: This article is for informational purposes only and does not constitute investment advice. All investment decisions should be based on your own research and risk tolerance.