• Retail Segment Gross Profit (Q4 2024): Increased 9% to $75.1 million from $69 million in Q4 2023.
• Retail Fuel Margin (Q4 2024): Declined 9% to $0.3706 per gallon from $0.4105 per gallon in Q4 2023.
• Same Store Retail Volume (Q4 2024): Increased 2% year-over-year.
• Inside Sales (Q4 2024): Up 1% year-over-year; excluding cigarettes, increased 2%.
• Merchandise Gross Profit (Q4 2024): Increased 27% to $28.1 million.
• Retail Site Count (Q4 2024): Increased by 99 sites compared to Q4 2023.
• Wholesale Segment Gross Profit (Q4 2024): Declined 22% to $25.9 million from $33 million in Q4 2023.
• Wholesale Fuel Margin (Q4 2024): Declined 13% to $0.0802 per gallon from $0.0904 per gallon in Q4 2023.
• Net Income (Q4 2024): $16.9 million, up from $16.7 million in Q4 2023.
• Adjusted EBITDA (Q4 2024): Decreased 26% to $35.5 million from $47.6 million in Q4 2023.
• Distributable Cash Flow (Q4 2024): $21.1 million, down from $35.8 million in Q4 2023.
• Operating Expenses (Q4 2024): Increased $10.7 million compared to Q4 2023.
• Capital Expenditures (Q4 2024): $7.2 million, with $5.1 million growth-related.
• Credit Facility Balance (End of 2024): $767.5 million with a leverage ratio of 4.36 times.
• Cash Interest Expense (Q4 2024): Increased to $12.9 million from $10 million in Q4 2023.

• Warning! GuruFocus has detected 9 Warning Signs with ARIS.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Retail segment gross profit increased by 9% in Q4 2024, driven by an increase in merchandise margin.
• Same store retail volume outperformed the national average, with a 2% increase compared to a 4% national decline.
• Merchandise gross profit rose by 27% to $28.1 million, supported by increased sales from a higher store count.
• The company successfully converted 107 sites to its retail class, enhancing long-term profitability.
• CrossAmerica Partners LP divested 30 properties in 2024, generating $36.3 million in proceeds, which strengthened the balance sheet.

Negative Points

• Wholesale segment gross profit declined by 22% due to a decrease in both fuel volume and margin per gallon.
• Adjusted EBITDA for Q4 2024 decreased by 26% compared to the same period in 2023.
• Distributable cash flow fell from $35.8 million in Q4 2023 to $21.1 million in Q4 2024.
• Operating expenses in the retail segment increased by 32% due to higher site count and initial ramp-up costs.
• Interest expenses rose significantly, impacting net income and cash flow, partly due to expired interest rate swaps.

Q & A Highlights

Q: Can you provide an overview of CrossAmerica Partners' retail segment performance for the fourth quarter of 2024? A: Charles Nifong, CEO, reported that the retail segment's gross profit increased by 9% to $75.1 million, driven by an increase in merchandise margin. However, there was a slight decrease in motor fuel gross profit. Despite weak fuel demand and soft inside store sales industry-wide, CrossAmerica's same-store volume and inside store sales outperformed the market. Retail fuel margins declined by 9% year-over-year due to less favorable price volatility in crude oil prices.

Q: How did the wholesale segment perform in the fourth quarter of 2024? A: The wholesale segment's gross profit declined by 22% to $25.9 million, primarily due to a decline in both fuel volume and margin per gallon. The conversion of certain lessee dealer sites to company-operated and commission agent sites, now accounted for in the retail segment, significantly impacted the wholesale segment's performance.

Q: What were the key financial results for CrossAmerica Partners in the fourth quarter of 2024? A: Maura Topper, CFO, stated that the net income was $16.9 million, slightly up from $16.7 million in the previous year. Adjusted EBITDA was $35.5 million, down 26% from the previous year. Distributable cash flow decreased to $21.1 million from $35.8 million in the fourth quarter of 2023, primarily due to lower adjusted EBITDA and higher cash interest expenses.

Q: What strategic actions did CrossAmerica Partners undertake in 2024? A: The company converted 107 sites to its retail class of trade, either as company-operated sites or commissioned locations, to enhance long-term profitability. They also divested 30 properties for $36.3 million in proceeds, focusing on recycling capital to strengthen the balance sheet and invest in growth opportunities.

Q: What are the expectations for CrossAmerica Partners in 2025? A: The company plans to continue optimizing its portfolio by strategically converting sites to retail and focusing on providing value and a great experience to customers. They also aim to maintain a strong balance sheet, continue portfolio divestitures, and adapt to market conditions to generate strong results for unit holders.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.