Star Group, L.P. Q2 FY2026 earnings call

Weather Impact

• Temperatures across operating footprint were 6.4% colder than last year and 2.8% colder than normal, leading to slightly higher product volumes sold but impacting field productivity and raising operating expenses.

Financial Performance

• Adjusted EBITDA was $139 million, a year-over-year improvement of $10.5 million. Net customer attrition was kept to 0.6%.

Acquisitions

• Closed on one small heating oil acquisition during the quarter and have several other opportunities under review.

Employee Appreciation

• Loyal employees worked tirelessly through difficult conditions to provide service and responsiveness.

Cost Containment

• Working to contain impact from wholesale product cost increases using inventory controls, supply chain initiatives, and margin management.

In the second quarter, home heating oil and propane volume rose by 600,000 gallons to 144.5 million gallons. Product gross profit increased by $19 million or 7% to $277 million. Service-related expenses increased by $3.4 million. Delivery, branch and G&A expenses increased by $5.4 million year-over-year. Adjusted EBITDA was $139 million, a year-over-year improvement of $10.5 million. For the first half of fiscal 2026, home heating oil and propane volume increased by 12 million gallons or 5.3% to 238 million gallons. Product gross profit increased by $48 million or 12% to $457 million. Service gross loss rose by $6.1 million. Delivery, branch and G&A expenses rose by a little over $16 million year-over-year. Net income for the first half was $144 million, $25 million more than the prior year period.

Fiscal Year Outlook

• Believe well positioned for remainder of fiscal 2026. Look forward to summer to further invest in people and business development initiatives.

Weather Hedge

• For fiscal 2027, put in place a $12.5 million weather hedge.

Weather Impact

• Severe weather, including large snow events, impacted field productivity and raised operating expenses.

Cost Escalation

• Higher wholesale product costs pose challenges, although immediate impact of current escalation is somewhat muted as coming out of heating season.