Murphy USA Inc. — Call Transcript 2026

Well, good morning, everybody. Thanks for joining us today. I'm Bobby Griffin, cover consumer hard lines retail here at Raymond James, including the convenience store sector. Today, we are pleased to have Murphy USA with us. From the company is CEO, President, Mindy West, VP of Investor Relations and FP&A, Christian Pikul, Director of Investor Relations and FP&A, Ash Aulds, and Senior Vice President of Strategy and Analytics, Eric Bartko, all sitting over there. Today's format's gonna be a presentation. Mindy's gonna lead. Before we get started, I'd just like to, A, thank you for being here. You guys have been long-time support, and, congratulate you on your first live presentation here as CEO. Thank you. With that, I'll turn it over. Thank you, Bobby. It's a pleasure to be here. Thank you guys for attending, and thanks for your interest in Murphy USA. We love the industry that we are in. We are actually the fourth largest convenience store operator in a huge market that is highly fragmented and serving 160 million customers on a daily basis, and we see a lot of potential for growth as well. This industry is serving a growing population in this country, and these people are mobile. They're moving into our markets, which is good. This map may be a little bit hard to see from where you are, but it shows that while the convenience store count is still hovering around 152,000 stores, there are actually fewer stores in the Midwest and the Northeast because new stores and more population are migrating to the Southeast and the Southwest. That is a fantastic trend for us. This industry also has high trip frequency. 43% of us live within a mile of a convenience store, and about two-thirds of us visit a convenience store at least once a week. Some visit even more than that. As we like to say, all of those trips are not for quinoa salads or pepperoni pizzas. A lot of those trips are for non-discretionary products that we major in, that we provide for our customers, and they reward us with their loyalty for having those products. It is an amazing industry. We have been incredibly successful in that space since our spin, and we are confident that we will continue to be successful in the future. We built our first store in 1996, and we have grown to a network of 1,800 stores in 2025, so tremendous growth. That's something in the past 30 years that we are really proud to have achieved. Today, I want to share with you some things that we are really excited about. We have a highly durable and repeatable growth model. We are building high-performing new stores that are earning attractive returns. We are building more of them. That is going to support our EBITDA growth in the future. We are also an everyday low pricer. That is not going to change. That is the player that we are. We're also enhancing our offer both inside and outside the store. We're also leveraging technology to do things more efficiently and effectively and to make our stores perform better. Despite a year that created a lot of headwinds on the fuel side of the business, our fuel performance last year was actually highly resilient. We believe that fuel is going to be a major growth catalyst for us going forward. We believe there's a lot of reasons to be excited to invest in Murphy USA. We have a really appealing value proposition. We have an incredibly strong foundation to build on, and we're improving store performance, building new stores, and share repurchase, share buybacks continue to be a focus, and deliver accretive value. I've been attending this conference for 13 years, and as Bobby said, this is the first time I'm actually presenting the company as a CEO, and I'm really excited about that. One of the most popular investor questions that I've been getting is, "What is gonna change under my leadership?" I think that's a fantastic question, but I actually think a more important near term question is, "What is gonna stay the same?" A lot of things are gonna stay the same. We remain committed to the core strategies that have allowed us to have a proven track record since our spin in 2013. I wanna lead off with these and talk about what they mean for us. These are the same five pillars, by the way, that you would have seen in our spin materials in 2013. They were resonating then. They continue to resonate now. Store growth, that has always been our first strategic pillar, and we have added about 600 stores to our network since we became a public company in 2013. Since building our very first store in 1996, we've now grown into, as I said, the fourth-largest convenience store retailer. After a lull post-COVID with the new store program, we are excited to tell you that we are going to be delivering new stores at a more robust pace and accelerating our growth over the next several years. More important is it's not growth for growth's sake. We're building high-performing assets that are meeting our high return expectations and helping to expand our offer to our customers, grow margin contribution, and diversify our merchandise mix. Which brings me to the second pillar, diversifying the merchandising mix. That is actually a strategy that I'm actually excited that we have not been able to execute because as much as we would love to diversify beyond knitting, we're really good at knitting, and so that continues to be part of our foundation. That has been a large contributor to our success. Our in-store sales that contributes about 64%, and on a margin basis, just under 50%. As we build larger stores, though, that selling space is going to more center of the store. Those higher margin products. Over time, we will continue to diversify our merchandise mix and grow our offer to our customers, optimizing our food and beverage offer too. Sustaining our cost profile is a critical element to our long-term success, there's no magic bullet here. We just have to grind it out and be better at everybody else. We have to live EDLP in order to succeed. As we build bigger stores, I'm gonna show you this in a minute, those will come with some higher store costs. We are building a more enduring and resonating offer for our customers, which will result in higher merchandise dollars versus the additional expense dollars. Creating advantage from market volatility. Volatility, we always say, is our friend. Our friend was absent last year, which was an exceptionally low volatile year with respect to gasoline prices. However, we know that volatility can introduce itself into the market at any time, and we have a really strong and competitive business model to capitalize on it when it does. We will also leverage our proprietary supply strategy to support our EDLP strategy at the gas pump. Lastly is investing for the long term. When I think about that mindset, that has been one of the most impactful strategies that we have deployed in delivering shareholder value. It combines our preference for high rate of return growth and generated excellent shareholder returns since going public. We make investments for the long term in those new stores that we expect to have a 30-plus year life and our free cash flow that those throw off. We also direct to building new stores, but also investing in capabilities. Investing in people, processes, technology. When those are executed with precision and scaled across the business, those can be some of the most valuable assets and valuable expenditures that we can make. As I said, we continue to favor share repurchases. That's not because there's nothing else to do with our cash. It's because we know what we can do with this business. We know the value that it can create. As a result, that belief always underwrites an investment in ourselves, and that will continue to be a focal point of our capital strategy. Let's get right to it and talk about the new stores. This is where we spend most of the capital, and we're very pleased with our new store performance. The data here that I'm showing you represents the last three years of stores, all 2,800 sq ft that were built from 2021 to 2023. These stores are delivering higher merchandise dollars, higher fuel contribution. They do come with higher operating expenses, they also come with higher EBITDA. These store investments are meeting our return expectations. They've actually, in some cases, slightly outperformed their pro forma. You can see the returns grow as the store ramps to maturity. On the bottom left, from a volumetric perspective, all these stores are performing really well. We remain pleased with our new store performance, we will continue to do everything we can to push those returns even higher. As we're building more of these high-performing stores, they are growing square footage at an accelerated pace. You can see over the past five years, we've actually grown our square footage by over 100%. At roughly 50 stores per year going forward, we expect square footage to grow another 900,000 ft coming off a higher base, so that's about 34% growth in square footage as we grow the network to over 2,000 stores. Remember, as I said earlier, the square footage is going to the center of the store space. It's diversifying our mix, it's broadening the offer to our customers, and increasing our contribution. In addition to the substantial investments we're making in the new stores, we're also investing in the customer experience too. We're going to be rolling out a fresh new look starting at mid-year. This is what it looks like. We're gonna introduce this. You can see it has a bright, attractive new color scheme. It's very blue forward. You'll notice that the canopy matches the store. We also have a more modern look with the gray brick. On the inside of the store, we've done kind of the same thing. We've removed the wallpaper. It's now clean, white, bright space, much better signage inside the store to direct the customer where they want to go. Better LED signage outside at the dispensers. We think these new stores are gonna look great. We think this is really gonna resonate with our customer. The best part of the program is it's actually cost neutral. At just a few thousand dollars of increase in cost, we're able to roll this out, so we're really excited about this concept. We think this brand refresh is gonna make our brand even more appealing than it already is. As I said, nicotine is important to us. We're very good at it. We have a differentiated advantage in nicotine, it's built on a large and very loyal customer base. It's a category, quite honestly, that we invest in. We have the best people in our company working on this category. We've invested in advanced pricing skills. We also have tremendously strong relationships with our vendor partners. As a result, we own a large percent of the market. As you can see here, we have grown our share and spread from 16%-20% since 2019. Think about that. One in every five packs sold in our market come from our stores. A lot about how you get better at merchandising is really just about how do you manage executing on the basics. As much as we would love to be the only retailer selling some unicorn product that customers want every day, only we have, that's not gonna happen. The fact is we honestly, in the convenience store space, we really pretty much sell the same stuff. It's amplifying the basics that really make the difference in the business. How we do that is very simple. We lead with price. We're gonna lead with price on the things that matter to our customers, and we're also gonna price competitively for the other products throughout the store. We provide value to our customer, and we reinforce that perception with our signage and with executed promotions. We also deliver quality. While our particular customers are not the wealthiest and they have to make their dollar stretch further, they still want quality. That's why in our mix, we skew to the well-known national brands because for our customer, that reads quality to them. You also have to provide your customer with a good shopping experience, and that can mean a lot of things. It definitely means fast and friendly customer service, clean and well-maintained stores, products that they want in stock and priced correctly. Those are all impactful to the customer, and when you do that properly, those customers wanna come back. If you execute across all those areas, we believe that we will be successful. We're already good at these things, but we know that we can get better. We're also refocusing on our food and beverage offer, and this is really about growing food contribution, but it's also about driving traffic to the store and building bigger baskets. At QuickChek, we will be doubling down on our coffee offer to drive traffic to the store, which also will then support bakery and breakfast. We're also intent on driving complexity out of the prepared food offer. We're gonna strengthen the portfolio of what we're offering. We're gonna reduce waste, and we're also going to be focused on the economics of things. Providing value and quality to customer, but being very mindful at what margin, what price point do we need to be. We're also gonna maximize promotional opportunities. We talk about our Murphy Drive Rewards and our QuickChek Rewards. Our digital capabilities are really allowing us to meet the customers where they are. How can we use those to economically change customer behavior? How do we get our customers to buy more of what they already buy? How do we get them to explore and buy other things in addition to that thing that they already buy? Our loyalty programs are very important to our customers. Last year alone, we delivered over $500 million of savings to the customers through our loyalty program, largely vendor-funded. As I mentioned earlier, we are building larger, more productive stores, but these larger stores do come with higher operating expenses. That does not mean that we are deviating from our everyday low cost position at all. We are not departing from that mindset, and you can see here the new stores are driving about two-thirds of that OpEx. If you look at it from a same store basis, the growth was only 2.2%. That is representative of significant wins that we have made when it comes to driving down costs at the store level. Because really it's all about simplifying operations, balancing efficiency and effectiveness. We ask our store managers to do a lot of things. If you spend a couple of hours in one of our stores, it is a beehive of activity. We are asking our store managers to do an awful lot. During my two years as COO, I spent a lot of time in our stores, and it really shocked me how much burden and how much expectation we really put on our store managers. The trick is to make sure that their busy translates into focus on the right things. We have leveraged our digital transformation efforts to make our labor model more efficient using demand forecasting, historical data to properly staff the stores when they are at their busiest. Store labor is roughly two-thirds of store expense, and we've done a great job in optimizing that. Our labor costs were only up a little over 2% last year. Optimizing store hours not only allows us to drive labor costs from the business, it also means we have the right people inside the store focused on the right things. We had a big win last year in shrink, reducing that by $4 million. We did that through a better check-in process, better inventory management, better merchandising of some high shrink error, items, moving those closer to the register. Without the right labor model, we would have never been able to drive that efficiency. We're also investing in store maintenance. Store maintenance by far is the largest non-people cost that we have, and we're doing a couple of different things to address that. One is lifecycle management. We've designed an inventory database to help us predict when the most costly repairs will happen. That's driven by age of equipment, warranty expiration, where is the store, what is the velocity of the store, what is the weather that that store is typically in. Rather than paying to fix a dispenser three different times and having all that downtime for customers, we're gonna proactively go in and replace those ahead of that. We will reduce our maintenance expense, but we will also reduce downtime and customer frustration. We're improving our self-maintenance capability. We've taken a look at all the high-velocity tickets that are generating a lot of maintenance expense for things that we could do ourselves. We can change out fuel hose couplings. We can change card reader batteries. Last year alone, that drove a benefit of about $2 million. We're still identifying different opportunities to deploy that. Another subset of self-maintenance is when you call a ticket. Our past operating procedure said you call in a ticket anytime a single light bulb is down in a canopy. That results in a tech coming out, a special charge for the scissor lift to get that technician to the top of the canopy. It's a lot of expense for one light bulb. We've rethought about that. We've recognized that one light bulb out in a canopy is not making material amounts of illumination change. What if we waited until two light bulbs are out? That is what procedure says now, and those sound like little things, but little customers really do have enormous impact. As you know, we also restructured the home office last year to create a leaner and more efficient organization. We talked a lot last year about the low price environment and the historically low volatility. I'm showing you here. Look at the minimal volatility that we had last year. We had on average of the first three quarters, $0.30 swing of volatility when we would normally see $0.70-$1.00. We also had the lowest retail prices we've seen since COVID. We still sold 28 million gallons. We continue to outperform OPIS, retail margins held firm at $0.281 a gallon, which was flat to the last year. We feel really good about what we were able to deliver in fuel. As we said last year, data has shown that customers become less price-sensitive at low prices. We're showing you this here. This shows the relative volume changes against absolute changes in retail gasoline. What is important in this chart is you will notice it's not a straight line. Once you reach certain thresholds, you get exponential behavior. Certainly below prices of $2.20, we see volume pressures. Customers are less price-sensitive. When prices though drift over $3, you start to see that price sensitivity behavior. Competition is also a reality that we face. There are some really strong competitors out there, and they are growing in markets in which we're growing too. In fact, we've seen 600 stores open within three miles of our stores since 2020. Roughly a third of our network has been impacted by a competitive intrusion, and a lot of that activity is happening in Texas, Florida, Colorado, North Carolina. Places where we already have a strong incumbent position, we're also building new stores. You're probably thinking that doesn't sound very good. What I would tell you is we don't worry about it. Why it might be a pain early on, eventually the markets normalized, we are set to win our fair share of the customers. I'll show you what this looks like. When we see pockets of competition emerge, we see a recurring pattern, three different themes. The first stage is the emerging phase, where the new entrant comes in. We see very aggressive pricing as they are trying to get their share, that generally results in lower margins for the players in that trade area, us included. Eventually, though, the market stabilizes. The promotional pricing ends because that new entrant has to earn a rate of return on that store, and so they cannot continue to hold margins low or negative. You see the volumes get redistributed across the market with the advantage players such as ourselves holding on to our fair share. You see margins recover to more sustainable break-even levels. Over time, the market matures, and you have steady volumes, predictable behavior, and orderly gas pricing structure. This is the analog we have seen. Obviously, it varies from market to market, but I'm gonna show you one particular market and what it's looked like. I'm showing you an example of a competitor entry with a large store model entering one of our Texas markets where we had an incumbent position of 27 stores. We saw these same three phases. At first, yes, we felt the volume and margin pressure as the new competitor blanketed the market. We didn't sit still from that. We were aggressive, too, trying to fight for our share. Eventually, though, we saw the market stabilize. Yes, it took a couple years from the first store to the last store before we saw the behavior change. During that period, we're investing in our store and our capabilities. After six years, you can see we still retain about 90% of the volume pre-entry. Our stores are performing well, and we see the competitors start to lean into margin beginning year two. They're usually inflating margin not just to pre-competition levels, but even higher levels to account for their larger stores, higher wages, higher inflation in the market. Over time, the market becomes orderly. We know the end state is gonna be incredibly advantageous to us and our winning business model. While it hurts for a period of time, we know that we will win in the future. Now, I wanna talk briefly about our product supply and wholesale business. We get a lot of questions about this. I'm gonna try to explain it really simply. We're really trying to strike an appropriate balance within four areas: ratability, flexibility, sustainability, and low cost. Let me see if I can summarize for you what we do. We purchase fuel in two different ways: proprietary barrels that we buy at refinery gates and through contracts that we have with suppliers in our markets. Yes, we have a wholesale function, but it's not a high risk-taking organization. It's not a material profit center. We think about it as an inventory balancing function for the retail business. We also have a long shipper history on major pipelines. This complements our ability to buy a product at the refinery gate and move it where we need to. We own and operate several terminals, 7 terminals where we process third-party volumes. Once the product leaves the terminal, we use third-party carriers to get it where it needs to go. Lastly, given all the assets and capabilities, we are able to optimize sending the right logistics partner to the right store and sourcing supply for every store at the most optimal location. Over time, this set of assets earns 2 cents-3 cents a gallon. I know it's hard to model because it can be volatile quarter to quarter, but it does even out over time. It is really complex to own and to manage all these assets, but that's what we expect it to deliver. We have delivered strong EBITDA growth over the years, and we acknowledge that it has been low since 2022, but we believe this is an inflection year. This is a bottoming year, and we're confident we can deliver on the... Confident, in fact, we continue to be active repurchasers of our stock. What does all this mean for long-term value creation? We have inherent volatility in our business, and so that can result in a rather large expected result of outcomes. We have a baseline view of the business which we are showing with the navy blue solid bars. We are also showing you potential upside for the business too. Our baseline, however, is underwritten by our new stores growing at a pace of 50 stores per year or 3% annually. We're also intent on growing our merchandise margin 3%-4% a year also. We're going to control our ratable growth driven by our NTI, driven by our initiatives, but also put ourselves in the best position to capitalize on volatility when it happens. Our strategies have endured the test of time, and they're gonna serve us in the future. How we execute on the strategies, though, is critically important. It's my job as CEO to enable leaders to run the business and drive results. To do that, we need a culture that is intent on delivering those results. We've made some important leadership changes in the past several months, putting the right leaders in position to grow the business. In conjunction, we have rethought about how do we refresh our focus? How do we need to work together? To help drive a culture change, we've introduced what we like to call our ABCs. Accountability, being accountable to each other, to our customers, to our stores, to investors. Balanced. We're still gonna keep building our process, but we need flexibility to move faster. We've had a lot of success over the years. It would be easy to be complacent, but we're not going to be. We're going to be curious because curiosity is the spark that is gonna enable the idea that is going to drive shareholder value, the next thing that we need to be doing in the stores, and it keeps our team engaged. In closing, the five strategic pillars that we've leaned on to grow this company since spin are still valid. They are still intact. We're undergoing a culture shift intended to make sure that we are agile and adaptable, unafraid to challenge ourselves while maintaining a relentless focus on delivering our results. I can assure you, as a management team, we are 100% not happy with flat EBITDA. I can tell you, I believe that these days are behind us, and I feel fully confident that when we are at this conference next year, we will not be talking about why EBITDA is going to be lower again. We will be talking about how much growth and potential we have ahead of us, and we are happy to jumpstart that today right here. Thank you. We have time for. I think we might have time for one question. We've got about one minute. I don't know if there's anyone from the audience. I guess it's a two-part question. First, you said the new stores at full ramp generate like 16% returns. How does that compare to the old store formats? How does it compare to what? To the old store formats? Like how much better is the 16? Well, it depends on what margin environment you're talking about, but the new stores we expect to deliver 16% return. In the past, when we first built kiosks, those were high performers too. It's not that the return is any different. It's just that we have an even better store against an aging network that is continuing to hold its own, but is certainly not able to contribute the kind of value that the larger store formats can with the more expanded offer. Got it. The second part of the question, you guys talked about capital allocation, kind of 50/50 share buybacks and then reinvest, is that still your goal? It's still valid. It can differ from year to year, period to period, right? Our capital is gonna go to growth. As growth and NTI are gonna fund additional cash flow back into the business, we're also investing in initiatives that are gonna drive value too. And share repurchase is gonna still be a critical component. But as you look year to year, we may be doing more of one, less of the other, but that is certainly our intention. Very good. I think that's right on time. Thank you, Mindy.

Speaker 1: Well, good morning, everybody. Thanks for joining us today. I'm Bobby Griffin, cover consumer hard lines retail here at Raymond James, including the convenience store sector. Today, we are pleased to have Murphy USA with us. From the company is CEO, President, Mindy West, VP of Investor Relations and FP&A, Christian Pikul, Director of Investor Relations and FP&A, Ash Aulds, and Senior Vice President of Strategy and Analytics, Eric Bartko, all sitting over there. Today's format's gonna be a presentation. Mindy's gonna lead. Before we get started, I'd just like to, A, thank you for being here. You guys have been long-time support, and, congratulate you on your first live presentation here as CEO. Well, good morning, everybody. well good morning everybody Thanks for joining us today. thanks for joining us today I'm Bobby Griffin, cover consumer hard lines retail here at Raymond James, including the convenience store sector. i'm bobby griffin cover consumer hard lines retail here at raymond james including the convenience store sector Today, we are pleased to have Murphy USA with us. today we are pleased to have murphy usa with us From the company is CEO, President, Mindy West, VP of Investor Relations and FP&A, Christian Pikul, Director of Investor Relations and FP&A, Ash Aulds, and Senior Vice President of Strategy and Analytics, Eric Bartko, all sitting over there. from the company is ceo president mindy west vp of investor relations and fp&a christian pikul director of investor relations and fp&a ash aulds and senior vice president of strategy and analytics eric bartko all sitting over there Today's format's gonna be a presentation. today's format's gonna be a presentation Mindy's gonna lead. mindy's gonna lead Before we get started, I'd just like to, A, thank you for being here. before we get started i'd just like to a thank you for being here You guys have been long-time support, and, congratulate you on your first live presentation here as CEO. you guys have been long-time support and congratulate you on your first live presentation here as ceo

Speaker 2: Thank you. Thank you. thank you

Speaker 1: With that, I'll turn it over. With that, I'll turn it over. with that i'll turn it over

Speaker 2: Thank you, Bobby. It's a pleasure to be here. Thank you guys for attending, and thanks for your interest in Murphy USA. We love the industry that we are in. We are actually the fourth largest convenience store operator in a huge market that is highly fragmented and serving 160 million customers on a daily basis, and we see a lot of potential for growth as well. This industry is serving a growing population in this country, and these people are mobile. They're moving into our markets, which is good. Thank you, Bobby. thank you bobby It's a pleasure to be here. it's a pleasure to be here Thank you guys for attending, and thanks for your interest in Murphy USA. thank you guys for attending and thanks for your interest in murphy usa We love the industry that we are in. we love the industry that we are in We are actually the fourth largest convenience store operator in a huge market that is highly fragmented and serving 160 million customers on a daily basis, and we see a lot of potential for growth as well. we are actually the fourth largest convenience store operator in a huge market that is highly fragmented and serving 160 million customers on a daily basis and we see a lot of potential for growth as well This industry is serving a growing population in this country, and these people are mobile. this industry is serving a growing population in this country and these people are mobile They're moving into our markets, which is good. they're moving into our markets which is good This map may be a little bit hard to see from where you are, but it shows that while the convenience store count is still hovering around 152,000 stores, there are actually fewer stores in the Midwest and the Northeast because new stores and more population are migrating to the Southeast and the Southwest. That is a fantastic trend for us. This map may be a little bit hard to see from where you are, but it shows that while the convenience store count is still hovering around 152,000 stores, there are actually fewer stores in the Midwest and the Northeast because new stores and more population are migrating to the Southeast and the Southwest. this map may be a little bit hard to see from where you are but it shows that while the convenience store count is still hovering around 152,000 stores there are actually fewer stores in the midwest and the northeast because new stores and more population are migrating to the southeast and the southwest That is a fantastic trend for us. that is a fantastic trend for us This industry also has high trip frequency. 43% of us live within a mile of a convenience store, and about two-thirds of us visit a convenience store at least once a week. Some visit even more than that. As we like to say, all of those trips are not for quinoa salads or pepperoni pizzas. This industry also has high trip frequency. 43% of us live within a mile of a convenience store, and about two-thirds of us visit a convenience store at least once a week. this industry also has high trip frequency 43% of us live within a mile of a convenience store and about two-thirds of us visit a convenience store at least once a week Some visit even more than that. some visit even more than that As we like to say, all of those trips are not for quinoa salads or pepperoni pizzas. as we like to say all of those trips are not for quinoa salads or pepperoni pizzas A lot of those trips are for non-discretionary products that we major in, that we provide for our customers, and they reward us with their loyalty for having those products. It is an amazing industry. We have been incredibly successful in that space since our spin, and we are confident that we will continue to be successful in the future. A lot of those trips are for non-discretionary products that we major in, that we provide for our customers, and they reward us with their loyalty for having those products. a lot of those trips are for non-discretionary products that we major in that we provide for our customers and they reward us with their loyalty for having those products It is an amazing industry. it is an amazing industry We have been incredibly successful in that space since our spin, and we are confident that we will continue to be successful in the future. we have been incredibly successful in that space since our spin and we are confident that we will continue to be successful in the future We built our first store in 1996, and we have grown to a network of 1,800 stores in 2025, so tremendous growth. That's something in the past 30 years that we are really proud to have achieved. Today, I want to share with you some things that we are really excited about. We have a highly durable and repeatable growth model. We built our first store in 1996, and we have grown to a network of 1,800 stores in 2025, so tremendous growth. we built our first store in 1996 and we have grown to a network of 1,800 stores in 2025 so tremendous growth That's something in the past 30 years that we are really proud to have achieved. that's something in the past 30 years that we are really proud to have achieved Today, I want to share with you some things that we are really excited about. today i want to share with you some things that we are really excited about We have a highly durable and repeatable growth model. we have a highly durable and repeatable growth model We are building high-performing new stores that are earning attractive returns. We are building more of them. That is going to support our EBITDA growth in the future. We are also an everyday low pricer. That is not going to change. That is the player that we are. We're also enhancing our offer both inside and outside the store. We're also leveraging technology to do things more efficiently and effectively and to make our stores perform better. We are building high-performing new stores that are earning attractive returns. we are building high-performing new stores that are earning attractive returns We are building more of them. we are building more of them That is going to support our EBITDA growth in the future. that is going to support our ebitda growth in the future We are also an everyday low pricer. we are also an everyday low pricer That is not going to change. that is not going to change That is the player that we are. that is the player that we are We're also enhancing our offer both inside and outside the store. we're also enhancing our offer both inside and outside the store We're also leveraging technology to do things more efficiently and effectively and to make our stores perform better. we're also leveraging technology to do things more efficiently and effectively and to make our stores perform better Despite a year that created a lot of headwinds on the fuel side of the business, our fuel performance last year was actually highly resilient. We believe that fuel is going to be a major growth catalyst for us going forward. We believe there's a lot of reasons to be excited to invest in Murphy USA. We have a really appealing value proposition. Despite a year that created a lot of headwinds on the fuel side of the business, our fuel performance last year was actually highly resilient. despite a year that created a lot of headwinds on the fuel side of the business our fuel performance last year was actually highly resilient We believe that fuel is going to be a major growth catalyst for us going forward. we believe that fuel is going to be a major growth catalyst for us going forward We believe there's a lot of reasons to be excited to invest in Murphy USA. we believe there's a lot of reasons to be excited to invest in murphy usa We have a really appealing value proposition. we have a really appealing value proposition We have an incredibly strong foundation to build on, and we're improving store performance, building new stores, and share repurchase, share buybacks continue to be a focus, and deliver accretive value. I've been attending this conference for 13 years, and as Bobby said, this is the first time I'm actually presenting the company as a CEO, and I'm really excited about that. We have an incredibly strong foundation to build on, and we're improving store performance, building new stores, and share repurchase, share buybacks continue to be a focus, and deliver accretive value. we have an incredibly strong foundation to build on and we're improving store performance building new stores and share repurchase share buybacks continue to be a focus and deliver accretive value I've been attending this conference for 13 years, and as Bobby said, this is the first time I'm actually presenting the company as a CEO, and I'm really excited about that. i've been attending this conference for 13 years and as bobby said this is the first time i'm actually presenting the company as a ceo and i'm really excited about that One of the most popular investor questions that I've been getting is, "What is gonna change under my leadership?" I think that's a fantastic question, but I actually think a more important near term question is, "What is gonna stay the same?" A lot of things are gonna stay the same. We remain committed to the core strategies that have allowed us to have a proven track record since our spin in 2013. One of the most popular investor questions that I've been getting is, "What is gonna change under my leadership?" I think that's a fantastic question, but I actually think a more important near term question is, "What is gonna stay the same?" A lot of things are gonna stay the same. one of the most popular investor questions that i've been getting is "what is gonna change under my leadership?" i think that's a fantastic question but i actually think a more important near term question is "what is gonna stay the same?" a lot of things are gonna stay the same We remain committed to the core strategies that have allowed us to have a proven track record since our spin in 2013. we remain committed to the core strategies that have allowed us to have a proven track record since our spin in 2013 I wanna lead off with these and talk about what they mean for us. These are the same five pillars, by the way, that you would have seen in our spin materials in 2013. They were resonating then. They continue to resonate now. Store growth, that has always been our first strategic pillar, and we have added about 600 stores to our network since we became a public company in 2013. I wanna lead off with these and talk about what they mean for us. i wanna lead off with these and talk about what they mean for us These are the same five pillars, by the way, that you would have seen in our spin materials in 2013. these are the same five pillars by the way that you would have seen in our spin materials in 2013 They were resonating then. they were resonating then They continue to resonate now. they continue to resonate now Store growth, that has always been our first strategic pillar, and we have added about 600 stores to our network since we became a public company in 2013. store growth that has always been our first strategic pillar and we have added about 600 stores to our network since we became a public company in 2013 Since building our very first store in 1996, we've now grown into, as I said, the fourth-largest convenience store retailer. After a lull post-COVID with the new store program, we are excited to tell you that we are going to be delivering new stores at a more robust pace and accelerating our growth over the next several years. More important is it's not growth for growth's sake. Since building our very first store in 1996, we've now grown into, as I said, the fourth-largest convenience store retailer. since building our very first store in 1996 we've now grown into as i said the fourth-largest convenience store retailer After a lull post-COVID with the new store program, we are excited to tell you that we are going to be delivering new stores at a more robust pace and accelerating our growth over the next several years. after a lull post-covid with the new store program we are excited to tell you that we are going to be delivering new stores at a more robust pace and accelerating our growth over the next several years More important is it's not growth for growth's sake. more important is it's not growth for growth's sake We're building high-performing assets that are meeting our high return expectations and helping to expand our offer to our customers, grow margin contribution, and diversify our merchandise mix. Which brings me to the second pillar, diversifying the merchandising mix. That is actually a strategy that I'm actually excited that we have not been able to execute because as much as we would love to diversify beyond knitting, we're really good at knitting, and so that continues to be part of our foundation. We're building high-performing assets that are meeting our high return expectations and helping to expand our offer to our customers, grow margin contribution, and diversify our merchandise mix. we're building high-performing assets that are meeting our high return expectations and helping to expand our offer to our customers grow margin contribution and diversify our merchandise mix Which brings me to the second pillar, diversifying the merchandising mix. which brings me to the second pillar diversifying the merchandising mix That is actually a strategy that I'm actually excited that we have not been able to execute because as much as we would love to diversify beyond knitting, we're really good at knitting, and so that continues to be part of our foundation. that is actually a strategy that i'm actually excited that we have not been able to execute because as much as we would love to diversify beyond knitting we're really good at knitting and so that continues to be part of our foundation That has been a large contributor to our success. Our in-store sales that contributes about 64%, and on a margin basis, just under 50%. As we build larger stores, though, that selling space is going to more center of the store. Those higher margin products. That has been a large contributor to our success. that has been a large contributor to our success Our in-store sales that contributes about 64%, and on a margin basis, just under 50%. our in-store sales that contributes about 64% and on a margin basis just under 50% As we build larger stores, though, that selling space is going to more center of the store. as we build larger stores though that selling space is going to more center of the store Those higher margin products. those higher margin products Over time, we will continue to diversify our merchandise mix and grow our offer to our customers, optimizing our food and beverage offer too. Sustaining our cost profile is a critical element to our long-term success, there's no magic bullet here. We just have to grind it out and be better at everybody else. We have to live EDLP in order to succeed. Over time, we will continue to diversify our merchandise mix and grow our offer to our customers, optimizing our food and beverage offer too. over time we will continue to diversify our merchandise mix and grow our offer to our customers optimizing our food and beverage offer too Sustaining our cost profile is a critical element to our long-term success, there's no magic bullet here. sustaining our cost profile is a critical element to our long-term success there's no magic bullet here We just have to grind it out and be better at everybody else. we just have to grind it out and be better at everybody else We have to live EDLP in order to succeed. we have to live edlp in order to succeed As we build bigger stores, I'm gonna show you this in a minute, those will come with some higher store costs. We are building a more enduring and resonating offer for our customers, which will result in higher merchandise dollars versus the additional expense dollars. Creating advantage from market volatility. Volatility, we always say, is our friend. Our friend was absent last year, which was an exceptionally low volatile year with respect to gasoline prices. As we build bigger stores, I'm gonna show you this in a minute, those will come with some higher store costs. as we build bigger stores i'm gonna show you this in a minute those will come with some higher store costs We are building a more enduring and resonating offer for our customers, which will result in higher merchandise dollars versus the additional expense dollars. we are building a more enduring and resonating offer for our customers which will result in higher merchandise dollars versus the additional expense dollars Creating advantage from market volatility. creating advantage from market volatility Volatility, we always say, is our friend. volatility we always say is our friend Our friend was absent last year, which was an exceptionally low volatile year with respect to gasoline prices. our friend was absent last year which was an exceptionally low volatile year with respect to gasoline prices However, we know that volatility can introduce itself into the market at any time, and we have a really strong and competitive business model to capitalize on it when it does. We will also leverage our proprietary supply strategy to support our EDLP strategy at the gas pump. Lastly is investing for the long term. When I think about that mindset, that has been one of the most impactful strategies that we have deployed in delivering shareholder value. However, we know that volatility can introduce itself into the market at any time, and we have a really strong and competitive business model to capitalize on it when it does. however we know that volatility can introduce itself into the market at any time and we have a really strong and competitive business model to capitalize on it when it does We will also leverage our proprietary supply strategy to support our EDLP strategy at the gas pump. we will also leverage our proprietary supply strategy to support our edlp strategy at the gas pump Lastly is investing for the long term. lastly is investing for the long term When I think about that mindset, that has been one of the most impactful strategies that we have deployed in delivering shareholder value. when i think about that mindset that has been one of the most impactful strategies that we have deployed in delivering shareholder value It combines our preference for high rate of return growth and generated excellent shareholder returns since going public. We make investments for the long term in those new stores that we expect to have a 30-plus year life and our free cash flow that those throw off. We also direct to building new stores, but also investing in capabilities. Investing in people, processes, technology. It combines our preference for high rate of return growth and generated excellent shareholder returns since going public. it combines our preference for high rate of return growth and generated excellent shareholder returns since going public We make investments for the long term in those new stores that we expect to have a 30-plus year life and our free cash flow that those throw off. we make investments for the long term in those new stores that we expect to have a 30-plus year life and our free cash flow that those throw off We also direct to building new stores, but also investing in capabilities. we also direct to building new stores but also investing in capabilities Investing in people, processes, technology. investing in people processes technology When those are executed with precision and scaled across the business, those can be some of the most valuable assets and valuable expenditures that we can make. As I said, we continue to favor share repurchases. That's not because there's nothing else to do with our cash. It's because we know what we can do with this business. When those are executed with precision and scaled across the business, those can be some of the most valuable assets and valuable expenditures that we can make. when those are executed with precision and scaled across the business those can be some of the most valuable assets and valuable expenditures that we can make As I said, we continue to favor share repurchases. as i said we continue to favor share repurchases That's not because there's nothing else to do with our cash. that's not because there's nothing else to do with our cash It's because we know what we can do with this business. it's because we know what we can do with this business We know the value that it can create. As a result, that belief always underwrites an investment in ourselves, and that will continue to be a focal point of our capital strategy. Let's get right to it and talk about the new stores. This is where we spend most of the capital, and we're very pleased with our new store performance. We know the value that it can create. we know the value that it can create As a result, that belief always underwrites an investment in ourselves, and that will continue to be a focal point of our capital strategy. as a result that belief always underwrites an investment in ourselves and that will continue to be a focal point of our capital strategy Let's get right to it and talk about the new stores. let's get right to it and talk about the new stores This is where we spend most of the capital, and we're very pleased with our new store performance. this is where we spend most of the capital and we're very pleased with our new store performance The data here that I'm showing you represents the last three years of stores, all 2,800 sq ft that were built from 2021 to 2023. These stores are delivering higher merchandise dollars, higher fuel contribution. They do come with higher operating expenses, they also come with higher EBITDA. These store investments are meeting our return expectations. They've actually, in some cases, slightly outperformed their pro forma. The data here that I'm showing you represents the last three years of stores, all 2,800 sq ft that were built from 2021 to 2023. the data here that i'm showing you represents the last three years of stores all 2,800 sq ft that were built from 2021 to 2023 These stores are delivering higher merchandise dollars, higher fuel contribution. these stores are delivering higher merchandise dollars higher fuel contribution They do come with higher operating expenses, they also come with higher EBITDA. they do come with higher operating expenses they also come with higher ebitda These store investments are meeting our return expectations. these store investments are meeting our return expectations They've actually, in some cases, slightly outperformed their pro forma. they've actually in some cases slightly outperformed their pro forma You can see the returns grow as the store ramps to maturity. On the bottom left, from a volumetric perspective, all these stores are performing really well. We remain pleased with our new store performance, we will continue to do everything we can to push those returns even higher. As we're building more of these high-performing stores, they are growing square footage at an accelerated pace. You can see the returns grow as the store ramps to maturity. you can see the returns grow as the store ramps to maturity On the bottom left, from a volumetric perspective, all these stores are performing really well. on the bottom left from a volumetric perspective all these stores are performing really well We remain pleased with our new store performance, we will continue to do everything we can to push those returns even higher. we remain pleased with our new store performance we will continue to do everything we can to push those returns even higher As we're building more of these high-performing stores, they are growing square footage at an accelerated pace. as we're building more of these high-performing stores they are growing square footage at an accelerated pace You can see over the past five years, we've actually grown our square footage by over 100%. At roughly 50 stores per year going forward, we expect square footage to grow another 900,000 ft coming off a higher base, so that's about 34% growth in square footage as we grow the network to over 2,000 stores. Remember, as I said earlier, the square footage is going to the center of the store space. You can see over the past five years, we've actually grown our square footage by over 100%. you can see over the past five years we've actually grown our square footage by over 100% At roughly 50 stores per year going forward, we expect square footage to grow another 900,000 ft coming off a higher base, so that's about 34% growth in square footage as we grow the network to over 2,000 stores. at roughly 50 stores per year going forward we expect square footage to grow another 900,000 ft coming off a higher base so that's about 34% growth in square footage as we grow the network to over 2,000 stores Remember, as I said earlier, the square footage is going to the center of the store space. remember as i said earlier the square footage is going to the center of the store space It's diversifying our mix, it's broadening the offer to our customers, and increasing our contribution. In addition to the substantial investments we're making in the new stores, we're also investing in the customer experience too. We're going to be rolling out a fresh new look starting at mid-year. This is what it looks like. We're gonna introduce this. It's diversifying our mix, it's broadening the offer to our customers, and increasing our contribution. it's diversifying our mix it's broadening the offer to our customers and increasing our contribution In addition to the substantial investments we're making in the new stores, we're also investing in the customer experience too. in addition to the substantial investments we're making in the new stores we're also investing in the customer experience too We're going to be rolling out a fresh new look starting at mid-year. we're going to be rolling out a fresh new look starting at mid-year This is what it looks like. this is what it looks like We're gonna introduce this. we're gonna introduce this You can see it has a bright, attractive new color scheme. It's very blue forward. You'll notice that the canopy matches the store. We also have a more modern look with the gray brick. On the inside of the store, we've done kind of the same thing. We've removed the wallpaper. It's now clean, white, bright space, much better signage inside the store to direct the customer where they want to go. Better LED signage outside at the dispensers. You can see it has a bright, attractive new color scheme. you can see it has a bright attractive new color scheme It's very blue forward. it's very blue forward You'll notice that the canopy matches the store. you'll notice that the canopy matches the store We also have a more modern look with the gray brick. we also have a more modern look with the gray brick On the inside of the store, we've done kind of the same thing. on the inside of the store we've done kind of the same thing We've removed the wallpaper. we've removed the wallpaper It's now clean, white, bright space, much better signage inside the store to direct the customer where they want to go. it's now clean white bright space much better signage inside the store to direct the customer where they want to go Better LED signage outside at the dispensers. better led signage outside at the dispensers We think these new stores are gonna look great. We think this is really gonna resonate with our customer. The best part of the program is it's actually cost neutral. At just a few thousand dollars of increase in cost, we're able to roll this out, so we're really excited about this concept. We think this brand refresh is gonna make our brand even more appealing than it already is. We think these new stores are gonna look great. we think these new stores are gonna look great We think this is really gonna resonate with our customer. we think this is really gonna resonate with our customer The best part of the program is it's actually cost neutral. the best part of the program is it's actually cost neutral At just a few thousand dollars of increase in cost, we're able to roll this out, so we're really excited about this concept. at just a few thousand dollars of increase in cost we're able to roll this out so we're really excited about this concept We think this brand refresh is gonna make our brand even more appealing than it already is. we think this brand refresh is gonna make our brand even more appealing than it already is As I said, nicotine is important to us. We're very good at it. We have a differentiated advantage in nicotine, it's built on a large and very loyal customer base. It's a category, quite honestly, that we invest in. We have the best people in our company working on this category. We've invested in advanced pricing skills. We also have tremendously strong relationships with our vendor partners. As I said, nicotine is important to us. as i said nicotine is important to us We're very good at it. we're very good at it We have a differentiated advantage in nicotine, it's built on a large and very loyal customer base. we have a differentiated advantage in nicotine it's built on a large and very loyal customer base It's a category, quite honestly, that we invest in. it's a category quite honestly that we invest in We have the best people in our company working on this category. We've invested in advanced pricing skills. we have the best people in our company working on this category. we've invested in advanced pricing skills We also have tremendously strong relationships with our vendor partners. we also have tremendously strong relationships with our vendor partners As a result, we own a large percent of the market. As you can see here, we have grown our share and spread from 16%-20% since 2019. Think about that. One in every five packs sold in our market come from our stores. A lot about how you get better at merchandising is really just about how do you manage executing on the basics. As a result, we own a large percent of the market. as a result we own a large percent of the market As you can see here, we have grown our share and spread from 16% - 20% since 2019. as you can see here we have grown our share and spread from 16% - 20% since 2019 Think about that. think about that One in every five packs sold in our market come from our stores. one in every five packs sold in our market come from our stores A lot about how you get better at merchandising is really just about how do you manage executing on the basics. a lot about how you get better at merchandising is really just about how do you manage executing on the basics As much as we would love to be the only retailer selling some unicorn product that customers want every day, only we have, that's not gonna happen. The fact is we honestly, in the convenience store space, we really pretty much sell the same stuff. It's amplifying the basics that really make the difference in the business. How we do that is very simple. As much as we would love to be the only retailer selling some unicorn product that customers want every day, only we have, that's not gonna happen. as much as we would love to be the only retailer selling some unicorn product that customers want every day only we have that's not gonna happen The fact is we honestly, in the convenience store space, we really pretty much sell the same stuff. the fact is we honestly in the convenience store space we really pretty much sell the same stuff It's amplifying the basics that really make the difference in the business. it's amplifying the basics that really make the difference in the business How we do that is very simple . how we do that is very simple We lead with price. We're gonna lead with price on the things that matter to our customers, and we're also gonna price competitively for the other products throughout the store. We provide value to our customer, and we reinforce that perception with our signage and with executed promotions. We also deliver quality. While our particular customers are not the wealthiest and they have to make their dollar stretch further, they still want quality. We lead with price. we lead with price We're gonna lead with price on the things that matter to our customers, and we're also gonna price competitively for the other products throughout the store. we're gonna lead with price on the things that matter to our customers and we're also gonna price competitively for the other products throughout the store We provide value to our customer, and we reinforce that perception with our signage and with executed promotions. we provide value to our customer and we reinforce that perception with our signage and with executed promotions We also deliver quality. we also deliver quality While our particular customers are not the wealthiest and they have to make their dollar stretch further, they still want quality. while our particular customers are not the wealthiest and they have to make their dollar stretch further they still want quality That's why in our mix, we skew to the well-known national brands because for our customer, that reads quality to them. You also have to provide your customer with a good shopping experience, and that can mean a lot of things. It definitely means fast and friendly customer service, clean and well-maintained stores, products that they want in stock and priced correctly. That's why in our mix, we skew to the well-known national brands because for our customer, that reads quality to them. that's why in our mix we skew to the well-known national brands because for our customer that reads quality to them You also have to provide your customer with a good shopping experience, and that can mean a lot of things. you also have to provide your customer with a good shopping experience and that can mean a lot of things It definitely means fast and friendly customer service, clean and well-maintained stores, products that they want in stock and priced correctly. it definitely means fast and friendly customer service clean and well-maintained stores products that they want in stock and priced correctly Those are all impactful to the customer, and when you do that properly, those customers wanna come back. If you execute across all those areas, we believe that we will be successful. We're already good at these things, but we know that we can get better. We're also refocusing on our food and beverage offer, and this is really about growing food contribution, but it's also about driving traffic to the store and building bigger baskets. Those are all impactful to the customer, and when you do that properly, those customers wanna come back. those are all impactful to the customer and when you do that properly those customers wanna come back If you execute across all those areas, we believe that we will be successful. if you execute across all those areas we believe that we will be successful We're already good at these things, but we know that we can get better. we're already good at these things but we know that we can get better We're also refocusing on our food and beverage offer, and this is really about growing food contribution, but it's also about driving traffic to the store and building bigger baskets. we're also refocusing on our food and beverage offer and this is really about growing food contribution but it's also about driving traffic to the store and building bigger baskets At QuickChek, we will be doubling down on our coffee offer to drive traffic to the store, which also will then support bakery and breakfast. We're also intent on driving complexity out of the prepared food offer. We're gonna strengthen the portfolio of what we're offering. We're gonna reduce waste, and we're also going to be focused on the economics of things. Providing value and quality to customer, but being very mindful at what margin, what price point do we need to be. At QuickChek, we will be doubling down on our coffee offer to drive traffic to the store, which also will then support bakery and breakfast. at quickchek we will be doubling down on our coffee offer to drive traffic to the store which also will then support bakery and breakfast We're also intent on driving complexity out of the prepared food offer. we're also intent on driving complexity out of the prepared food offer We're gonna strengthen the portfolio of what we're offering. we're gonna strengthen the portfolio of what we're offering We're gonna reduce waste, and we're also going to be focused on the economics of things. we're gonna reduce waste and we're also going to be focused on the economics of things Providing value and quality to customer, but being very mindful at what margin, what price point do we need to be. providing value and quality to customer but being very mindful at what margin what price point do we need to be We're also gonna maximize promotional opportunities. We talk about our Murphy Drive Rewards and our QuickChek Rewards. Our digital capabilities are really allowing us to meet the customers where they are. How can we use those to economically change customer behavior? How do we get our customers to buy more of what they already buy? We're also gonna maximize promotional opportunities. we're also gonna maximize promotional opportunities We talk about our Murphy Drive Rewards and our QuickChek Rewards. we talk about our murphy drive rewards and our quickchek rewards Our digital capabilities are really allowing us to meet the customers where they are. our digital capabilities are really allowing us to meet the customers where they are How can we use those to economically change customer behavior? how can we use those to economically change customer behavior How do we get our customers to buy more of what they already buy? how do we get our customers to buy more of what they already buy How do we get them to explore and buy other things in addition to that thing that they already buy? Our loyalty programs are very important to our customers. Last year alone, we delivered over $500 million of savings to the customers through our loyalty program, largely vendor-funded. As I mentioned earlier, we are building larger, more productive stores, but these larger stores do come with higher operating expenses. How do we get them to explore and buy other things in addition to that thing that they already buy? how do we get them to explore and buy other things in addition to that thing that they already buy Our loyalty programs are very important to our customers. our loyalty programs are very important to our customers Last year alone, we delivered over $500 million of savings to the customers through our loyalty program, largely vendor-funded. last year alone we delivered over $500 million of savings to the customers through our loyalty program largely vendor-funded As I mentioned earlier, we are building larger, more productive stores, but these larger stores do come with higher operating expenses. as i mentioned earlier we are building larger more productive stores but these larger stores do come with higher operating expenses That does not mean that we are deviating from our everyday low cost position at all. We are not departing from that mindset, and you can see here the new stores are driving about two-thirds of that OpEx. If you look at it from a same store basis, the growth was only 2.2%. That is representative of significant wins that we have made when it comes to driving down costs at the store level. That does not mean that we are deviating from our everyday low cost position at all. that does not mean that we are deviating from our everyday low cost position at all We are not departing from that mindset, and you can see here the new stores are driving about two-thirds of that OpEx. we are not departing from that mindset and you can see here the new stores are driving about two-thirds of that opex If you look at it from a same store basis, the growth was only 2.2%. if you look at it from a same store basis the growth was only 2.2% That is representative of significant wins that we have made when it comes to driving down costs at the store level. that is representative of significant wins that we have made when it comes to driving down costs at the store level Because really it's all about simplifying operations, balancing efficiency and effectiveness. We ask our store managers to do a lot of things. If you spend a couple of hours in one of our stores, it is a beehive of activity. We are asking our store managers to do an awful lot. During my two years as COO, I spent a lot of time in our stores, and it really shocked me how much burden and how much expectation we really put on our store managers. The trick is to make sure that their busy translates into focus on the right things. We have leveraged our digital transformation efforts to make our labor model more efficient using demand forecasting, historical data to properly staff the stores when they are at their busiest. Because really it's all about simplifying operations, balancing efficiency and effectiveness. because really it's all about simplifying operations balancing efficiency and effectiveness We ask our store managers to do a lot of things. we ask our store managers to do a lot of things If you spend a couple of hours in one of our stores, it is a beehive of activity. if you spend a couple of hours in one of our stores it is a beehive of activity We are asking our store managers to do an awful lot. we are asking our store managers to do an awful lot During my two years as COO, I spent a lot of time in our stores, and it really shocked me how much burden and how much expectation we really put on our store managers. during my two years as coo i spent a lot of time in our stores and it really shocked me how much burden and how much expectation we really put on our store managers The trick is to make sure that their busy translates into focus on the right things. the trick is to make sure that their busy translates into focus on the right things We have leveraged our digital transformation efforts to make our labor model more efficient using demand forecasting, historical data to properly staff the stores when they are at their busiest. we have leveraged our digital transformation efforts to make our labor model more efficient using demand forecasting historical data to properly staff the stores when they are at their busiest Store labor is roughly two-thirds of store expense, and we've done a great job in optimizing that. Our labor costs were only up a little over 2% last year. Optimizing store hours not only allows us to drive labor costs from the business, it also means we have the right people inside the store focused on the right things. We had a big win last year in shrink, reducing that by $4 million. Store labor is roughly two-thirds of store expense, and we've done a great job in optimizing that. store labor is roughly two-thirds of store expense and we've done a great job in optimizing that Our labor costs were only up a little over 2% last year. our labor costs were only up a little over 2% last year Optimizing store hours not only allows us to drive labor costs from the business, it also means we have the right people inside the store focused on the right things. optimizing store hours not only allows us to drive labor costs from the business it also means we have the right people inside the store focused on the right things We had a big win last year in shrink, reducing that by $4 million. we had a big win last year in shrink reducing that by $4 million We did that through a better check-in process, better inventory management, better merchandising of some high shrink error, items, moving those closer to the register. Without the right labor model, we would have never been able to drive that efficiency. We're also investing in store maintenance. Store maintenance by far is the largest non-people cost that we have, and we're doing a couple of different things to address that. We did that through a better check-in process, better inventory management, better merchandising of some high shrink error, items, moving those closer to the register. we did that through a better check-in process better inventory management better merchandising of some high shrink error items moving those closer to the register Without the right labor model, we would have never been able to drive that efficiency. without the right labor model we would have never been able to drive that efficiency We're also investing in store maintenance. we're also investing in store maintenance Store maintenance by far is the largest non-people cost that we have, and we're doing a couple of different things to address that. store maintenance by far is the largest non-people cost that we have and we're doing a couple of different things to address that One is lifecycle management. We've designed an inventory database to help us predict when the most costly repairs will happen. That's driven by age of equipment, warranty expiration, where is the store, what is the velocity of the store, what is the weather that that store is typically in. Rather than paying to fix a dispenser three different times and having all that downtime for customers, we're gonna proactively go in and replace those ahead of that. One is lifecycle management. one is lifecycle management We've designed an inventory database to help us predict when the most costly repairs will happen. we've designed an inventory database to help us predict when the most costly repairs will happen That's driven by age of equipment, warranty expiration, where is the store, what is the velocity of the store, what is the weather that that store is typically in. that's driven by age of equipment warranty expiration where is the store what is the velocity of the store what is the weather that that store is typically in Rather than paying to fix a dispenser three different times and having all that downtime for customers, we're gonna proactively go in and replace those ahead of that. rather than paying to fix a dispenser three different times and having all that downtime for customers we're gonna proactively go in and replace those ahead of that We will reduce our maintenance expense, but we will also reduce downtime and customer frustration. We're improving our self-maintenance capability. We've taken a look at all the high-velocity tickets that are generating a lot of maintenance expense for things that we could do ourselves. We can change out fuel hose couplings. We can change card reader batteries. We will reduce our maintenance expense, but we will also reduce downtime and customer frustration. we will reduce our maintenance expense but we will also reduce downtime and customer frustration We're improving our self-maintenance capability. we're improving our self-maintenance capability We've taken a look at all the high-velocity tickets that are generating a lot of maintenance expense for things that we could do ourselves. we've taken a look at all the high-velocity tickets that are generating a lot of maintenance expense for things that we could do ourselves We can change out fuel hose couplings. we can change out fuel hose couplings We can change card reader batteries. we can change card reader batteries Last year alone, that drove a benefit of about $2 million. We're still identifying different opportunities to deploy that. Another subset of self-maintenance is when you call a ticket. Our past operating procedure said you call in a ticket anytime a single light bulb is down in a canopy. That results in a tech coming out, a special charge for the scissor lift to get that technician to the top of the canopy. It's a lot of expense for one light bulb. We've rethought about that. We've recognized that one light bulb out in a canopy is not making material amounts of illumination change. What if we waited until two light bulbs are out? That is what procedure says now, and those sound like little things, but little customers really do have enormous impact. Last year alone, that drove a benefit of about $2 million. last year alone that drove a benefit of about $2 million We're still identifying different opportunities to deploy that. we're still identifying different opportunities to deploy that Another subset of self-maintenance is when you call a ticket. another subset of self-maintenance is when you call a ticket Our past operating procedure said you call in a ticket anytime a single light bulb is down in a canopy. our past operating procedure said you call in a ticket anytime a single light bulb is down in a canopy That results in a tech coming out, a special charge for the scissor lift to get that technician to the top of the canopy. that results in a tech coming out a special charge for the scissor lift to get that technician to the top of the canopy It's a lot of expense for one light bulb. it's a lot of expense for one light bulb We've rethought about that. we've rethought about that We've recognized that one light bulb out in a canopy is not making material amounts of illumination change. we've recognized that one light bulb out in a canopy is not making material amounts of illumination change What if we waited until two light bulbs are out? what if we waited until two light bulbs are out That is what procedure says now, and those sound like little things, but little customers really do have enormous impact. that is what procedure says now and those sound like little things but little customers really do have enormous impact As you know, we also restructured the home office last year to create a leaner and more efficient organization. We talked a lot last year about the low price environment and the historically low volatility. I'm showing you here. Look at the minimal volatility that we had last year. We had on average of the first three quarters, $0.30 swing of volatility when we would normally see $0.70-$1.00. We also had the lowest retail prices we've seen since COVID. As you know, we also restructured the home office last year to create a leaner and more efficient organization. as you know we also restructured the home office last year to create a leaner and more efficient organization We talked a lot last year about the low price environment and the historically low volatility. we talked a lot last year about the low price environment and the historically low volatility I'm showing you here. i'm showing you here Look at the minimal volatility that we had last year. look at the minimal volatility that we had last year We had on average of the first three quarters, $0.30 swing of volatility when we would normally see $0.70 - $1.00. we had on average of the first three quarters $0.30 swing of volatility when we would normally see $0.70 - $1.00 We also had the lowest retail prices we've seen since COVID. we also had the lowest retail prices we've seen since covid We still sold 28 million gallons. We continue to outperform OPIS, retail margins held firm at $0.281 a gallon, which was flat to the last year. We feel really good about what we were able to deliver in fuel. As we said last year, data has shown that customers become less price-sensitive at low prices. We still sold 28 million gallons. we still sold 28 million gallons We continue to outperform OPIS, retail margins held firm at $0.281 a gallon, which was flat to the last year. we continue to outperform opis retail margins held firm at $0.281 a gallon which was flat to the last year We feel really good about what we were able to deliver in fuel. we feel really good about what we were able to deliver in fuel As we said last year, data has shown that customers become less price-sensitive at low prices. as we said last year data has shown that customers become less price-sensitive at low prices We're showing you this here. This shows the relative volume changes against absolute changes in retail gasoline. What is important in this chart is you will notice it's not a straight line. Once you reach certain thresholds, you get exponential behavior. Certainly below prices of $2.20, we see volume pressures. Customers are less price-sensitive. We're showing you this here. we're showing you this here This shows the relative volume changes against absolute changes in retail gasoline. this shows the relative volume changes against absolute changes in retail gasoline What is important in this chart is you will notice it's not a straight line. what is important in this chart is you will notice it's not a straight line Once you reach certain thresholds, you get exponential behavior. once you reach certain thresholds you get exponential behavior Certainly below prices of $2.20, we see volume pressures. certainly below prices of $2.20 we see volume pressures Customers are less price-sensitive. customers are less price-sensitive When prices though drift over $3, you start to see that price sensitivity behavior. Competition is also a reality that we face. There are some really strong competitors out there, and they are growing in markets in which we're growing too. In fact, we've seen 600 stores open within three miles of our stores since 2020. Roughly a third of our network has been impacted by a competitive intrusion, and a lot of that activity is happening in Texas, Florida, Colorado, North Carolina. When prices though drift over $3, you start to see that price sensitivity behavior. when prices though drift over $3 you start to see that price sensitivity behavior Competition is also a reality that we face. competition is also a reality that we face There are some really strong competitors out there, and they are growing in markets in which we're growing too. there are some really strong competitors out there and they are growing in markets in which we're growing too In fact, we've seen 600 stores open within three miles of our stores since 2020. in fact we've seen 600 stores open within three miles of our stores since 2020 Roughly a third of our network has been impacted by a competitive intrusion, and a lot of that activity is happening in Texas, Florida, Colorado, North Carolina. roughly a third of our network has been impacted by a competitive intrusion and a lot of that activity is happening in texas florida colorado north carolina Places where we already have a strong incumbent position, we're also building new stores. You're probably thinking that doesn't sound very good. What I would tell you is we don't worry about it. Why it might be a pain early on, eventually the markets normalized, we are set to win our fair share of the customers. I'll show you what this looks like. When we see pockets of competition emerge, we see a recurring pattern, three different themes. The first stage is the emerging phase, where the new entrant comes in. We see very aggressive pricing as they are trying to get their share, that generally results in lower margins for the players in that trade area, us included. Eventually, though, the market stabilizes. Places where we already have a strong incumbent position, we're also building new stores. places where we already have a strong incumbent position we're also building new stores You're probably thinking that doesn't sound very good. you're probably thinking that doesn't sound very good What I would tell you is we don't worry about it. what i would tell you is we don't worry about it Why it might be a pain early on, eventually the markets normalized, we are set to win our fair share of the customers. why it might be a pain early on eventually the markets normalized we are set to win our fair share of the customers I'll show you what this looks like. i'll show you what this looks like When we see pockets of competition emerge, we see a recurring pattern, three different themes. when we see pockets of competition emerge we see a recurring pattern three different themes The first stage is the emerging phase, where the new entrant comes in. the first stage is the emerging phase where the new entrant comes in We see very aggressive pricing as they are trying to get their share, that generally results in lower margins for the players in that trade area, us included. we see very aggressive pricing as they are trying to get their share that generally results in lower margins for the players in that trade area us included Eventually, though, the market stabilizes. eventually though the market stabilizes The promotional pricing ends because that new entrant has to earn a rate of return on that store, and so they cannot continue to hold margins low or negative. You see the volumes get redistributed across the market with the advantage players such as ourselves holding on to our fair share. You see margins recover to more sustainable break-even levels. The promotional pricing ends because that new entrant has to earn a rate of return on that store, and so they cannot continue to hold margins low or negative. the promotional pricing ends because that new entrant has to earn a rate of return on that store and so they cannot continue to hold margins low or negative You see the volumes get redistributed across the market with the advantage players such as ourselves holding on to our fair share. you see the volumes get redistributed across the market with the advantage players such as ourselves holding on to our fair share You see margins recover to more sustainable break-even levels. you see margins recover to more sustainable break-even levels Over time, the market matures, and you have steady volumes, predictable behavior, and orderly gas pricing structure. This is the analog we have seen. Obviously, it varies from market to market, but I'm gonna show you one particular market and what it's looked like. I'm showing you an example of a competitor entry with a large store model entering one of our Texas markets where we had an incumbent position of 27 stores. We saw these same three phases. Over time, the market matures, and you have steady volumes, predictable behavior, and orderly gas pricing structure. over time the market matures and you have steady volumes predictable behavior and orderly gas pricing structure This is the analog we have seen. this is the analog we have seen Obviously, it varies from market to market, but I'm gonna show you one particular market and what it's looked like. obviously it varies from market to market but i'm gonna show you one particular market and what it's looked like I'm showing you an example of a competitor entry with a large store model entering one of our Texas markets where we had an incumbent position of 27 stores. i'm showing you an example of a competitor entry with a large store model entering one of our texas markets where we had an incumbent position of 27 stores We saw these same three phases. we saw these same three phases At first, yes, we felt the volume and margin pressure as the new competitor blanketed the market. We didn't sit still from that. We were aggressive, too, trying to fight for our share. Eventually, though, we saw the market stabilize. Yes, it took a couple years from the first store to the last store before we saw the behavior change. During that period, we're investing in our store and our capabilities. After six years, you can see we still retain about 90% of the volume pre-entry. At first, yes, we felt the volume and margin pressure as the new competitor blanketed the market. at first yes we felt the volume and margin pressure as the new competitor blanketed the market We didn't sit still from that. we didn't sit still from that We were aggressive, too, trying to fight for our share. we were aggressive too trying to fight for our share Eventually, though, we saw the market stabilize. eventually though we saw the market stabilize Yes, it took a couple years from the first store to the last store before we saw the behavior change. yes it took a couple years from the first store to the last store before we saw the behavior change During that period, we're investing in our store and our capabilities. during that period we're investing in our store and our capabilities After six years, you can see we still retain about 90% of the volume pre-entry. after six years you can see we still retain about 90% of the volume pre-entry Our stores are performing well, and we see the competitors start to lean into margin beginning year two. They're usually inflating margin not just to pre-competition levels, but even higher levels to account for their larger stores, higher wages, higher inflation in the market. Over time, the market becomes orderly. Our stores are performing well, and we see the competitors start to lean into margin beginning year two. our stores are performing well and we see the competitors start to lean into margin beginning year two They're usually inflating margin not just to pre-competition levels, but even higher levels to account for their larger stores, higher wages, higher inflation in the market. they're usually inflating margin not just to pre-competition levels but even higher levels to account for their larger stores higher wages higher inflation in the market Over time, the market becomes orderly. over time the market becomes orderly We know the end state is gonna be incredibly advantageous to us and our winning business model. While it hurts for a period of time, we know that we will win in the future. Now, I wanna talk briefly about our product supply and wholesale business. We get a lot of questions about this. I'm gonna try to explain it really simply. We're really trying to strike an appropriate balance within four areas: ratability, flexibility, sustainability, and low cost. We know the end state is gonna be incredibly advantageous to us and our winning business model. we know the end state is gonna be incredibly advantageous to us and our winning business model While it hurts for a period of time, we know that we will win in the future. while it hurts for a period of time we know that we will win in the future Now, I wanna talk briefly about our product supply and wholesale business. now i wanna talk briefly about our product supply and wholesale business We get a lot of questions about this. we get a lot of questions about this I'm gonna try to explain it really simply. i'm gonna try to explain it really simply We're really trying to strike an appropriate balance within four areas: ratability, flexibility, sustainability, and low cost. we're really trying to strike an appropriate balance within four areas ratability flexibility sustainability and low cost Let me see if I can summarize for you what we do. We purchase fuel in two different ways: proprietary barrels that we buy at refinery gates and through contracts that we have with suppliers in our markets. Yes, we have a wholesale function, but it's not a high risk-taking organization. It's not a material profit center. Let me see if I can summarize for you what we do. let me see if i can summarize for you what we do We purchase fuel in two different ways: proprietary barrels that we buy at refinery gates and through contracts that we have with suppliers in our markets. we purchase fuel in two different ways proprietary barrels that we buy at refinery gates and through contracts that we have with suppliers in our markets Yes, we have a wholesale function, but it's not a high risk-taking organization. yes we have a wholesale function but it's not a high risk-taking organization It's not a material profit center. it's not a material profit center We think about it as an inventory balancing function for the retail business. We also have a long shipper history on major pipelines. This complements our ability to buy a product at the refinery gate and move it where we need to. We own and operate several terminals, 7 terminals where we process third-party volumes. We think about it as an inventory balancing function for the retail business. we think about it as an inventory balancing function for the retail business We also have a long shipper history on major pipelines. we also have a long shipper history on major pipelines This complements our ability to buy a product at the refinery gate and move it where we need to. this complements our ability to buy a product at the refinery gate and move it where we need to We own and operate several terminals, 7 terminals where we process third-party volumes. we own and operate several terminals 7 terminals where we process third-party volumes Once the product leaves the terminal, we use third-party carriers to get it where it needs to go. Lastly, given all the assets and capabilities, we are able to optimize sending the right logistics partner to the right store and sourcing supply for every store at the most optimal location. Over time, this set of assets earns 2 cents-3 cents a gallon. I know it's hard to model because it can be volatile quarter to quarter, but it does even out over time. Once the product leaves the terminal, we use third-party carriers to get it where it needs to go. once the product leaves the terminal we use third-party carriers to get it where it needs to go Lastly, given all the assets and capabilities, we are able to optimize sending the right logistics partner to the right store and sourcing supply for every store at the most optimal location. lastly given all the assets and capabilities we are able to optimize sending the right logistics partner to the right store and sourcing supply for every store at the most optimal location Over time, this set of assets earns 2 cents -3 cents a gallon. over time this set of assets earns 2 cents -3 cents a gallon I know it's hard to model because it can be volatile quarter to quarter, but it does even out over time. i know it's hard to model because it can be volatile quarter to quarter but it does even out over time It is really complex to own and to manage all these assets, but that's what we expect it to deliver. We have delivered strong EBITDA growth over the years, and we acknowledge that it has been low since 2022, but we believe this is an inflection year. This is a bottoming year, and we're confident we can deliver on the... It is really complex to own and to manage all these assets, but that's what we expect it to deliver. it is really complex to own and to manage all these assets but that's what we expect it to deliver We have delivered strong EBITDA growth over the years, and we acknowledge that it has been low since 2022, but we believe this is an inflection year. we have delivered strong ebitda growth over the years and we acknowledge that it has been low since 2022 but we believe this is an inflection year This is a bottoming year, and we're confident we can deliver on the... this is a bottoming year and we're confident we can deliver on the Confident, in fact, we continue to be active repurchasers of our stock. What does all this mean for long-term value creation? We have inherent volatility in our business, and so that can result in a rather large expected result of outcomes. We have a baseline view of the business which we are showing with the navy blue solid bars. We are also showing you potential upside for the business too. Confident, in fact, we continue to be active repurchasers of our stock. confident in fact we continue to be active repurchasers of our stock What does all this mean for long-term value creation? what does all this mean for long-term value creation We have inherent volatility in our business, and so that can result in a rather large expected result of outcomes. we have inherent volatility in our business and so that can result in a rather large expected result of outcomes We have a baseline view of the business which we are showing with the navy blue solid bars. we have a baseline view of the business which we are showing with the navy blue solid bars We are also showing you potential upside for the business too. we are also showing you potential upside for the business too Our baseline, however, is underwritten by our new stores growing at a pace of 50 stores per year or 3% annually. We're also intent on growing our merchandise margin 3%-4% a year also. We're going to control our ratable growth driven by our NTI, driven by our initiatives, but also put ourselves in the best position to capitalize on volatility when it happens. Our baseline, however, is underwritten by our new stores growing at a pace of 50 stores per year or 3% annually. our baseline however is underwritten by our new stores growing at a pace of 50 stores per year or 3% annually We're also intent on growing our merchandise margin 3%-4% a year also. we're also intent on growing our merchandise margin 3%-4% a year also We're going to control our ratable growth driven by our NTI, driven by our initiatives, but also put ourselves in the best position to capitalize on volatility when it happens. we're going to control our ratable growth driven by our nti driven by our initiatives but also put ourselves in the best position to capitalize on volatility when it happens Our strategies have endured the test of time, and they're gonna serve us in the future. How we execute on the strategies, though, is critically important. It's my job as CEO to enable leaders to run the business and drive results. To do that, we need a culture that is intent on delivering those results. We've made some important leadership changes in the past several months, putting the right leaders in position to grow the business. Our strategies have endured the test of time, and they're gonna serve us in the future. our strategies have endured the test of time and they're gonna serve us in the future How we execute on the strategies, though, is critically important. how we execute on the strategies though is critically important It's my job as CEO to enable leaders to run the business and drive results. it's my job as ceo to enable leaders to run the business and drive results To do that, we need a culture that is intent on delivering those results. to do that we need a culture that is intent on delivering those results We've made some important leadership changes in the past several months, putting the right leaders in position to grow the business. we've made some important leadership changes in the past several months putting the right leaders in position to grow the business In conjunction, we have rethought about how do we refresh our focus? How do we need to work together? To help drive a culture change, we've introduced what we like to call our ABCs. Accountability, being accountable to each other, to our customers, to our stores, to investors. Balanced. We're still gonna keep building our process, but we need flexibility to move faster. In conjunction, we have rethought about how do we refresh our focus? in conjunction we have rethought about how do we refresh our focus How do we need to work together? how do we need to work together To help drive a culture change, we've introduced what we like to call our ABCs. to help drive a culture change we've introduced what we like to call our abcs Accountability, being accountable to each other, to our customers, to our stores, to investors. accountability being accountable to each other to our customers to our stores to investors Balanced. balanced We're still gonna keep building our process, but we need flexibility to move faster. we're still gonna keep building our process but we need flexibility to move faster We've had a lot of success over the years. It would be easy to be complacent, but we're not going to be. We're going to be curious because curiosity is the spark that is gonna enable the idea that is going to drive shareholder value, the next thing that we need to be doing in the stores, and it keeps our team engaged. In closing, the five strategic pillars that we've leaned on to grow this company since spin are still valid. We've had a lot of success over the years. we've had a lot of success over the years It would be easy to be complacent, but we're not going to be. it would be easy to be complacent but we're not going to be We're going to be curious because curiosity is the spark that is gonna enable the idea that is going to drive shareholder value, the next thing that we need to be doing in the stores, and it keeps our team engaged. we're going to be curious because curiosity is the spark that is gonna enable the idea that is going to drive shareholder value the next thing that we need to be doing in the stores and it keeps our team engaged In closing, the five strategic pillars that we've leaned on to grow this company since spin are still valid. in closing the five strategic pillars that we've leaned on to grow this company since spin are still valid They are still intact. We're undergoing a culture shift intended to make sure that we are agile and adaptable, unafraid to challenge ourselves while maintaining a relentless focus on delivering our results. I can assure you, as a management team, we are 100% not happy with flat EBITDA. I can tell you, I believe that these days are behind us, and I feel fully confident that when we are at this conference next year, we will not be talking about why EBITDA is going to be lower again. We will be talking about how much growth and potential we have ahead of us, and we are happy to jumpstart that today right here. Thank you. We have time for. They are still intact. they are still intact We're undergoing a culture shift intended to make sure that we are agile and adaptable, unafraid to challenge ourselves while maintaining a relentless focus on delivering our results. we're undergoing a culture shift intended to make sure that we are agile and adaptable unafraid to challenge ourselves while maintaining a relentless focus on delivering our results I can assure you, as a management team, we are 100% not happy with flat EBITDA. i can assure you as a management team we are 100% not happy with flat ebitda I can tell you, I believe that these days are behind us, and I feel fully confident that when we are at this conference next year, we will not be talking about why EBITDA is going to be lower again. i can tell you i believe that these days are behind us and i feel fully confident that when we are at this conference next year we will not be talking about why ebitda is going to be lower again We will be talking about how much growth and potential we have ahead of us, and we are happy to jumpstart that today right here. we will be talking about how much growth and potential we have ahead of us and we are happy to jumpstart that today right here Thank you. thank you We have time for. we have time for

Speaker 1: I think we might have time for one question. We've got about one minute. I don't know if there's anyone from the audience. I think we might have time for one question. i think we might have time for one question We've got about one minute. we've got about one minute I don't know if there's anyone from the audience. i don't know if there's anyone from the audience

Speaker 3: I guess it's a two-part question. First, you said the new stores at full ramp generate like 16% returns. How does that compare to the old store formats? I guess it's a two-part question. i guess it's a two-part question First, you said the new stores at full ramp generate like 16% returns. first you said the new stores at full ramp generate like 16% returns How does that compare to the old store formats? how does that compare to the old store formats

Speaker 2: How does it compare to what? How does it compare to what? how does it compare to what

Speaker 3: To the old store formats? Like how much better is the 16? To the old store formats? to the old store formats Like how much better is the 16? like how much better is the 16

Speaker 2: Well, it depends on what margin environment you're talking about, but the new stores we expect to deliver 16% return. In the past, when we first built kiosks, those were high performers too. It's not that the return is any different. It's just that we have an even better store against an aging network that is continuing to hold its own, but is certainly not able to contribute the kind of value that the larger store formats can with the more expanded offer. Well, it depends on what margin environment you're talking about, but the new stores we expect to deliver 16% return. well it depends on what margin environment you're talking about but the new stores we expect to deliver 16% return In the past, when we first built kiosks, those were high performers too. in the past when we first built kiosks those were high performers too It's not that the return is any different. it's not that the return is any different It's just that we have an even better store against an aging network that is continuing to hold its own, but is certainly not able to contribute the kind of value that the larger store formats can with the more expanded offer. it's just that we have an even better store against an aging network that is continuing to hold its own but is certainly not able to contribute the kind of value that the larger store formats can with the more expanded offer

Speaker 3: Got it. The second part of the question, you guys talked about capital allocation, kind of 50/50 share buybacks and then reinvest, is that still your goal? Got it. got it The second part of the question, you guys talked about capital allocation, kind of 50/50 share buybacks and then reinvest, is that still your goal? the second part of the question you guys talked about capital allocation kind of 50/50 share buybacks and then reinvest is that still your goal

Speaker 2: It's still valid. It can differ from year to year, period to period, right? Our capital is gonna go to growth. As growth and NTI are gonna fund additional cash flow back into the business, we're also investing in initiatives that are gonna drive value too. And share repurchase is gonna still be a critical component. But as you look year to year, we may be doing more of one, less of the other, but that is certainly our intention. It's still valid. it's still valid It can differ from year to year, period to period, right? it can differ from year to year period to period right Our capital is gonna go to growth. our capital is gonna go to growth As growth and NTI are gonna fund additional cash flow back into the business, we're also investing in initiatives that are gonna drive value too. as growth and nti are gonna fund additional cash flow back into the business we're also investing in initiatives that are gonna drive value too And share repurchase is gonna still be a critical component. and share repurchase is gonna still be a critical component But as you look year to year, we may be doing more of one, less of the other, but that is certainly our intention. but as you look year to year we may be doing more of one less of the other but that is certainly our intention

Speaker 1: Very good. I think that's right on time. Thank you, Mindy. Very good. very good I think that's right on time. i think that's right on time Thank you, Mindy. thank you mindy