Murphy USA's nicotine category is emerging as a key profit driver, with first-quarter merchandise contribution rising 7.3% year over year to $210.2 million. Same-store nicotine contribution surged 11.5%, far outpacing the 2.7% growth in non-nicotine merchandise, while overall merchandise margins improved to 20.0% from 19.6%. Management noted that elevated fuel prices are attracting more value-conscious customers, boosting nicotine purchases, and the category now provides a stable source of higher-margin earnings that offsets softness in discretionary items like snacks. Compared with peers Casey's General Stores and ARKO Corp., Murphy USA appears to be extracting greater earnings leverage from nicotine, supported by robust demand for modern nicotine products and its everyday low-price strategy. The stock trades at a forward price-to-earnings ratio of 17.84, well below Casey's 39.59 and ARKO's 22.11, and analysts have raised 2026 EPS estimates by 26.57% and 2027 estimates by 7.35% over the past 60 days.
Murphy USA IncNicotine category profit driver with strong same-store nicotine contribution growth and margin improvement.
Arko Corp
Caseys General Stores Inc