Every segment of international fuel distributor and convenience retailer Parkland Corp. delivered year-over-year growth in second-quarter 2024, except for Parkland USA, which represents about 10% of Parkland’s total adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
Parkland Corp. lowered its 2024 full-year adjusted EBITDA guidance to between $1.9 and $2 billion. Its U.S. segment delivered adjusted EBITDA of $49 million in the second quarter, down from the prior year but up nearly 50% from first-quarter 2024.
- Parkland Corp. is No. 38 on CSP’s 2024 Top 202 ranking of U.S. convenience-store chains by store count.
Marcel Teunissen, Parkland Corp.’s chief financial officer, gave an update on the Calgary, Alberta-based company’s Aug. 1 earnings call. Across the U.S. market, unit margins improved as wholesale prices were declining most of the quarter. Parkland continues to see declines in retail and commercial fuel volumes across the United States compared to 2023, driven by higher fuel prices, weather, changes in consumer behavior and some indications of economic slowdown, he said.
The team has offset these U.S. trends with “targeted cost-savings initiatives,” Teunissen said. Those include more than 300 staff reductions since January 2023, and the elimination of “underutilized” trucks and the consolidation of regional branches, he said.
Parkland’s U.S. business varies by region. Its business in states including Idaho, Utah, Montana and the Dakotas is “tracking to plan,” Teunissen said, despite some industry-wide volume declines. But in Florida, while the commercial business is on track, its retail and supply business have “yet to reach their full potential,” he said.
“Following the loss of market share in the first quarter, we went back to our suppliers and are renegotiating pricing that has negatively impacted our competitiveness in the region,” Teunissen said. “We are encouraged by the improvement in the U.S. in the second quarter; however, there is more work to do. The team remains focused on executing our integrated strategy, rebranding stores, implementing merchandising and procurement initiatives and optimizing our labor and logistics operations.”
Parkland Corp. President and CEO Bob Espey said on the call that they are “implementing tactical improvements in Florida.”
“These actions aim to increase margins, reduce costs and optimize in store results through refreshed merchandising strategies, rebrands and targeted promotions,” he said.
Espey also said the U.S. team is making “sound progress on integration,” through optimizing scheduling practices, refreshing more than 40 On the Run sites and divesting several non-core commercial operations and retail sites.
“I'm encouraged by the improvements the team has been able to make in the USA,” Espey said. “While certain supply margins were challenged during the quarter, we have seen these subsequently improve, and I know our talented supply team will be able to take advantage of this to improve results. I have confidence that the team will overcome these temporary setbacks and deliver the run rate EBITDA that was previously guided in the upcoming quarters.”
Parkland is an international fuel distributor, marketer and convenience retailer with operations in 26 countries across the Americas. It’s the parent company of Parkland USA, which has more than 200 company-owned convenience stores in the United States under brands including On the Run.
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