Wednesday, February 7, 2018
Off Topic: Speedway financials
One thing about earnings report season is that it gives us a glimpse inside some well-known companies. Here in the Ohio Valley, one of the more visible companies is Marathon Petroleum, the parent company of the Speedway chain of convenience stores.
When I look at the Marathon Petroleum financials at quarter's end, I like to see if much has changed at Speedway. Speedway is one of the few chains in which we have an inside look at the business side of things.
Here is some information about Speedway gleaned from MPC's fourth-quarter results announced Feb. 1.
At the end of 2017, Speedway had 2,744 stores, an increase of 11 from the end of 2016. Speedway sold nearly $5.8 billion of gasoline and distillates last year. How much profit do you think Speedway made last year for each gallon of gasoline sold?
About 17.38 cents.
That gave Speedway a little over $1 billion profit from gasoline and distallate sales.
But the profit center for convenience stores is not the pumps on the outside. It's in the merchandise sold inside. Last year Speedway made $1.4 billion profit on $4.9 billion in merchandise sales. That was a profit margin of about 28.7 percent.
Way back in the 1960s when I was but a youngster, I remember a lot of companies that sold gasoline at the retail level here in the Ohio Valley. After 50 years, many of them have cut back their operations, left the market or no longer exist: Sinclair, Pure, Union 76, Sohio, Texaco, Gulf, Bonded, Quaker State and more.
One thing about today's gasoline retail market is how unbranded gasoline has taken a larger share of things. Look around at how many people buy gasoline at Kroger or Walmart nowadays.
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