CrossAmerica Partners LP Q2 FY2025 earnings call

• Strategic Actions: Recorded a record $64 million in asset sales during the quarter, used primarily to pay down debt. Sold lower-performing sites in non-strategic markets like Kansas and Colorado.
• Operational Results: Retail segment EBITDA was below prior year but better than Q1. Fuel market volatility was lower, impacting margins. Retail volume and inside sales outperformed the industry. Wholesale segment gross profit declined due to volume and rental income drops, mainly from site conversions.
• Balance Sheet: Asset sales reduced debt by over $50 million, ending Q2 with a credit facility balance of $727 million. Leverage ratio improved to 3.65x from 4.36x.

Retail Segment

• Gross profit decreased 1% to $76.1 million in Q2 2025 compared to $76.6 million in Q2 2024. Fuel gross profit declined primarily due to a slight decrease in retail fuel margin (cents per gallon down 1% to $0.37 from $0.373). Same-store volume declined 2% year-over-year but outperformed national volume demand. Inside sales were up approximately 2% year-over-year, with inside sales excluding cigarettes up 4%. Merchandise gross profit increased 2% to $30.5 million, but the merchandise margin percentage declined slightly. Company-operated site count decreased by 15 sites, while commission agent site count increased modestly by 2 sites.

Wholesale Segment

• Gross profit declined 12% to $24.9 million in Q2 2025 compared to $28.1 million in Q2 2024. This was driven by a decline in fuel volume, fuel margin, and rental income. Fuel gross profit decreased 9% to $15.2 million, with fuel margin down 2% to $0.085 per gallon. Wholesale volume decreased 7%, with same-store volume down 2% but outperforming national volume demand. Rent decreased due to the conversion of certain lessee dealer sites to other segments.

• Management expects a strong pipeline of asset sales for the rest of the year. Focus remains on real estate rationalization and optimizing the operating portfolio. Continues to aim for managing leverage at approximately 4x on a credit facility-defined basis and generating value for unitholders.

• Fuel market volatility could impact retail and wholesale margins.
• Consumer spending patterns, particularly by lower income segments, may affect sales.
• Challenges could arise in real estate rationalization efforts, such as unforeseen issues with divested sites.

Q: A: Q: A: Operator indicated no questions during the call