With its gasoline margins down 16 cents per gallon (CPG) year over year, fuel distributor and convenience retailer CrossAmerica Partners leaned on its in-store sales to maintain a strong third quarter in its retail segment.
During the quarter, which ended Sept. 30, the company saw motor-fuel gross profit decline 34% to $36.2 million from $54.5 million a year ago even as retail fuel gallons ticked up 4% to 132.2 million gallons. At the same time, fuel margins dipped from an average 54.5 CPG in third-quarter 2022 to 37.2 CPG this year.
Merchandise gross profit, meanwhile, increased 23% compared to the previous year, hitting $25.4 million this year, compared to $20.6 million in 2022.
“While retail fuel margins were down from the extraordinary quarter last year, the overall business still performed well for the current quarter,” said Charles Nifong, president and CEO of CrossAmerica. "With our strong balance sheet and solid distribution coverage, the business is well positioned for the future.”
- CrossAmerica Partners ranked No. 33 on CSP’s 2023 Top 202 list of the largest U.S. convenience-store chains by company-owned store count.
“For inside sales on a same-site basis, our inside sales increased approximately 4% relative to last year. Inside sales excluding cigarettes were up approximately 9% year-over-year on a same-store basis. The strong sales performance was generally across all categories with packaged beverages and our food categories performing particularly well,” he added during a third-quarter earnings call.
During the recent quarter, total net income dipped steeply, from $27.6 million last year to $12.3 million in 2023 and adjusted EBITDA declined from $62.2 million to $44.2 million, again on the heels of “the exceptionally strong results of the third-quarter 2022.”
“For the third-quarter 2023, the decrease in net income and adjusted EBITDA was primarily driven by declines in gross profit in both the wholesale and retail [fuel] segments,” the company said.
CrossAmerica Partners LP, Allentown, Pennsylvania, is a leading wholesale distributor of motor fuels, convenience-store operator, and owner and lessee of real estate used in the retail distribution of motor fuels.