CrossAmerica Partners reported a “solid” first quarter and noted its “retail segment performed particularly well ... despite ongoing economic headwinds ... with same-store volumes, store sales and inside sales margin all higher relative to the prior year.”
Meanwhile, “our wholesale segment generated increased segment gross profit and fuel margin relative to last year,” said Charles Nifong, president and CEO of CrossAmerica.
- CrossAmerica Partners is No. 33 on CSP’s 2023 Top 40 update to its 2022 Top 202 ranking of the largest U.S. convenience-store chains by company-owned store count. Watch for the full 2023 Top 202 in June.
During the quarter, CrossAmerica reported declines in operating income, net income, adjusted EBITDA and distributable cash flow compared to first-quarter 2022; however, gross profits increased 4%, “which was primarily driven by increases in motor fuel, merchandise and rent gross profit,” the company reported Monday.
This growth was offset by an increase in operating expenses in both the wholesale and retail segments, “driven by inflation in several cost categories and increased labor costs in the retail segment.”
CrossAmerica also experienced a $5.4 million increase in interest expense in first-quarter 2023 when compared to first-quarter 2022, driven by the increase in interest rates.
For first-quarter 2023, the retail segment generated a 5% increase in gross profit compared to the same period in 2022. The increase for the first quarter 2023 was primarily due to higher motor fuel and merchandise gross profit.
The retail segment sold 119.1 million of retail fuel gallons during first-quarter 2023, which was an increase of 3% when compared to first-quarter 2022. Same-store retail segment fuel volume for first-quarter 2023 increased 2% from 111.3 million gallons during first-quarter 2022 to 113.2 million gallons.
CrossAmerica’s merchandise gross profit and other revenue increased 9% when compared to first-quarter 2022. The first-quarter increase was primarily due to an increase in overall store sales due to higher retail prices and higher unit count sales, as well as improved product margins. Same-store merchandise sales excluding cigarettes increased 10% for first-quarter 2023 when compared to the previous year. Merchandise gross profit percentage increased from 26.8% for first-quarter 2022 to 27.8% for first-quarter 2023, primarily due to improved merchandise margins in the categories of packaged beverages and snacks.
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. Formed in 2012, CrossAmerica Partners is a distributor of branded and unbranded petroleum for motor vehicles in the United States and distributes fuel to approximately 1,700 locations and owns or leases approximately 1,150 sites.
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