Susser Holdings Corp.

Susser Holdings Corp. (SUSS - Snapshot Report) announced a huge earnings surprise earlier this month, propelling the stock into an bullish trend. The company also raised estimated synergy from a recent acquisition and escaped possibly catastrophic damages from hurricane Dolly.

About the Company

Susser Holdings Corp. operates through two major segments across Texas, New Mexico, and Oklahoma. The Retail segment operates 510 convenience stores and gas stations named Stripes and Town & Country. The Wholesale segment distributes fuel to over 380 dealers. The company's headquarters are in Corpus Christi, Texas, has a market cap of over $300 million, and has approximately 4,200 full-time employees.

A 290% Earnings Surprise

On August 6th Susser announced second-quarter earnings of 39 cents per share, smashing the consensus estimate of 10 cents by 290%. Sales came in at $187.9 million, up 77.4% year-over-year. The spike in sales is mostly due to acquisitions, but a 6.6% same-store increase drove earnings higher, as well.

Net income also received a boost from increased margins across the board, including fuel which the company reported 19.4 cents per gallon compared to last year's 17.2 cents.

Susser Raises Estimate of Acquisition

While the acquisition of Town & Country Food Stores was announced last year, Susser recently announced that the integration is fully complete. The Company now estimates the minimum expected synergy from acquiring Town & Country Food Stores is $10 million, up from the previous estimate of $5 million. The company's new estimate is based on a decrease in procurement cost, mostly through the merchandise segment.

Hurricane Dolly's Impact Less Than Expected

While the exact cost is unknown, the estimate is $2-3 million, however the company's stores show no signs of structural damage. Susser did have to close 112 stores during the storm in late July, but employees were unscathed and costs were limited to food spoilage and superficial damages to the stores.

Estimates Are Rising

The consensus estimate for the current quarter is 36 cents per share, up 20% from 30 cents a few weeks ago. The current-year consensus estimate is also up, now 50 cents per share from 34 cents within the last month. While the consensus for the quarter is 36 cents per share, and the current year is 50 cents, the most recent estimates have come in at 47 cents and 85 cents, respectively.

The Chart

Shares of SUSS have been in an upward trend since late July when the company released an update for its operating results on July 21st. The shares saw a nice pop after the update and another spike just after the August 6th earnings announcement. Take a look at the chart below.

Read the full analyst report on SUSS