Q2 2026 CrossAmerica Partners LP Earnings Call

August 6, 2026

Speaker #1: Good morning, ladies and gentlemen, and welcome to the Crossamerica Partners Q2 2026 earnings call. At this time, all lines are in, and listen-only mode.

Speaker #1: Following the presentation, we will begin a question-and-answer session. If at any time during this call you require immediate assistance, please press * followed by the number 0 for the operator.

Speaker #1: This call is being recorded on Thursday, August 6, 2026. I would now like to turn the conference over to Randy Palmer. Investor Relations. Please go ahead.

Speaker #2: Thank you, operator. Good morning, and thank you for joining the Crossamerica Partners Q2 2026 earnings call. With me today are Maura Topper, CEO and President, and John Benville, Chief Financial Officer.

Randy Palmer: Thank you, operator. Good morning, and thank you for joining the CrossAmerica Partners Q2 2026 Earnings Call. With me today are Maura Topper, CEO and President, and Jon Benfield, Chief Financial Officer. We will start off the call today with Maura providing some opening comments and an overview of CrossAmerica's operational performance for the Q2. Jon will discuss the financial results. We will open up the call to questions. Today's call will follow presentation slides that are available as part of the webcast and are posted on the CrossAmerica website. Before we begin, I would like to remind everyone that today's call, including the question and answer session, may include forward-looking statements regarding expected revenue, future plans, future operational metrics, and opportunities and expectations of the organization.

Speaker #2: We'll start off the call today with Maura providing some opening comments, and an overview of Crossamerica's operational performance for the Q2. And then John will discuss the financial results.

Speaker #2: We will then open up the call to questions. Today's call will follow presentation slides that are available as part of the webcast and are posted on the Crossamerica website.

Speaker #2: Before we begin, I would like to remind everyone that today's call, including the question-and-answer session, may include forward-looking statements regarding expected revenue, future plans, future operational metrics, and opportunities and expectations of the organization.

Speaker #2: There can be no assurance that management's expectations and beliefs and projections will be achieved or that actual results will not differ from expectations. Please see Crossamerica's filings with the securities and exchange commission, including annual reports on Form 10-K, and quarterly reports on Form 10-Q for discussion of important factors that could affect our actual results.

Randy Palmer: There can be no assurance that management's expectations, beliefs, and projections will be achieved or that actual results will not differ from expectations. Please see CrossAmerica's filings with the Securities and Exchange Commission, including annual reports on Form 10-K and quarterly reports on Form 10-Q, for a discussion of important factors that could affect our actual results. Forward-looking statements represent the judgment of CrossAmerica's management as of today's date, and the organization disclaims any intent or obligation to update any forward-looking statements. During today's call, we may also provide certain performance measures that do not conform to US generally accepted accounting principles or GAAP. We have provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press release.

Speaker #2: Forward-looking statements represent the judgment of Crossamerica's management as of today's date, and the organization disclaims any intent or obligation to update any forward-looking statements.

Speaker #2: During today's call, we may also provide certain performance measures that do not conform to U.S. generally accepted accounting principles, or GAAP. We provided schedules that reconcile these non-GAAP measures, with our reported results on a GAAP basis as part of our earnings press release.

Speaker #2: Today's call is being webcast, and a recording of this conference call will be available on the CrossAmerica website for a period of 60 days.

Randy Palmer: Today's call is being webcast, and a recording of this conference call will be available on the CrossAmerica website for a period of 60 days. With that, I will now turn the call over to Maura.

Speaker #2: With that, I will now turn the call over to Maura.

Speaker #3: Thank you, Randy. Thank you to everyone joining us this morning. We appreciate you making the time to be with us today. I wanted to start out by saying that I'm happy to now introduce John Benfield as our Chief Financial Officer, no longer with the interim tag.

Maura Topper: Thank you, Randy. Thank you to everyone joining us this morning. We appreciate you making the time to be with us today. I wanted to start out by saying that I'm happy to now introduce Jon Benfield as our Chief Financial Officer, no longer with the interim tag. I am excited that he has accepted this role and look forward to continuing to work with him across all of CrossAmerica's strategic priorities. He will be going through the quarterly financials in more detail after my comments, as he did last Q. Our recently completed Q2 continues to build on many of the key momentum areas we are focusing on at CrossAmerica.

Speaker #3: I am excited that he has accepted this role and look forward to continuing to work with him across all of Crossamerica's strategic priorities. He will be going through the quarterly financials in more detail after my comments, as he did last quarter.

Speaker #3: Our recently completed Q2 continues to build on many of the key momentum areas we are focusing on at Crossamerica. Active control over retail fuel pricing, where possible, improving the image and offerings in our convenience store locations, acting as an effective and efficient wholesale fuel supplier to our customers across the country, and actively preparing the portfolio for sustainable success well into the future.

Maura Topper: Active control over retail fuel pricing where possible, improving the image and offerings in our convenience store locations, acting as an effective and efficient wholesale fuel supplier to our customers across the country, and actively preparing the portfolio for sustainable success well into the future. In spite of a volatile, broader operating environment during the quarter, our team remained focused on the aspects of the business that we can control, and I'm proud today for Jon and I to be able to talk about a number of our wins on the merchandise margin, cost management, and balance sheet fronts. Now, if you'll turn to slide four, I will review some of the operating highlights of our Q2.

Speaker #3: In spite of a volatile, broader operating environment during the quarter, our team remained focused on the aspects of the business that we can control and I'm proud today for John and I to be able to talk about a number of our wins on the merchandise margin, cost management, and balance sheet fronts.

Speaker #3: Now, if you'll turn to slide 4, I will review some of the operating highlights of our Q2. Overall, we have continued our strong start to 2026, building on a solid Q1, by generating 51.8 million dollars of adjusted EBITDA during the Q2.

Maura Topper: Overall, we have continued our strong start to 2026, building on a solid Q1 by generating $51.8 million of Adjusted EBITDA during the Q2, a 40% increase when compared to the Q2 of 2025. We benefited from strong gross profits from both our retail and wholesale segments, driven by motor fuel margins, along with a meaningful increase in merchandise margin percentage in our retail segment, and focused expense control across our operations. For the Q2 of 2026, our retail segment gross profit increased 13% to $85.7 million compared to $76.1 million in the Q2 of 2025. The increase was primarily driven by an increase in motor fuel gross profit, along with, to a lesser extent, growth in merchandise gross profit and other revenue. For the quarter, our retail fuel gross profit increased $7.7 million compared to the Q2 of 2025.

Speaker #3: A 40% increase when compared to the Q2 of 2025. We benefited from strong gross profits from both our retail and wholesale segments, driven by motor fuel, margins, along with a meaningful increase in merchandise margin percentage in our retail segment, and focused expense control across our operations.

Speaker #3: For the Q2 of 2026, our retail segment gross profit increased 13% to 85.7 million dollars, compared to 76.1 million dollars in the Q2 of 2025.

Speaker #3: The increase was primarily driven by an increase in motor fuel gross profit, along with, to a lesser extent, growth in merchandise gross profit and other revenue.

Speaker #3: For the quarter, our retail fuel gross profit increased 7.7 million dollars, compared to the Q2 of 2025. As we are all aware, the Q2 of 2026 was marked by a generally rising fuel price environment, with the average cost of a gallon of gasoline across more than $4.50 per gallon in late May.

Maura Topper: As we are all aware, Q2 2026 was marked by a generally rising fuel price environment, with the average cost of a gallon of gasoline across the country reaching a high of more than $4.50 per gallon in late May. Prices at the pump did moderate in June, though underlying input costs remained volatile throughout the quarter. This combination of elevated prices at the pump and underlying input volatility resulted in a more challenging fuel volume quarter, offset by elevated fuel margins. On a same-store basis, our retail segment reported an 11% decline in volume year-over-year, with diverging results across the two classes of trade within our retail segment. Same-store volume at our company-operated locations was down approximately 8% for the quarter, with our commission same-store volume decline more elevated, resulting in the segment's overall volume performance.

Speaker #3: Prices at the pump did moderate in June, though underlying input costs remained volatile throughout the quarter. This combination of elevated prices at the pump and underlying input volatility resulted in a more challenging fuel volume quarter, offset by elevated fuel margins.

Speaker #3: On a same-store basis, our retail segment reported an 11% decline in volume year over year. With diverging results across the two classes of trade within our retail segment, same-store volume at our company-operated locations was down approximately 8% for the quarter.

Speaker #3: With our commission same-store volume decline more elevated, resulting in the segment's overall volume performance. Our company-operated site performance trailed industry volume trends modestly throughout the quarter, though the pattern we experienced closely tracked the broader industry.

Maura Topper: Our company-operated site performance trailed industry volume trends modestly throughout the quarter, though the pattern we experienced closely tracked the broader industry, with a soft April, a more challenged May, while prices were rising and hit that elevated level I mentioned earlier in late May. Then some improvement in June as prices at the pump also moderated, though remained at elevated levels compared to the prior year. In our commission class of trade, we are continuing to work to balance fuel volume and margin, though we were impacted by challenges in a select number of markets in the quarter that further challenged our results. June's volume trends in both classes of trade have generally persisted during the start of Q3.

Speaker #3: With a soft April, a more challenged May, while prices were rising and hit that elevated level I mentioned earlier in late May, and then some improvement in June, as prices at the pump also moderated.

Speaker #3: Though remained at elevated levels compared to the prior year. In our commission class of trade, we are continuing to work to balance fuel volume and margin, though we were impacted by challenges in a select number of markets in the quarter that further challenged our results.

Speaker #3: June's volume trends in both classes of trade have generally persisted during the start of the third quarter. Turning to our fuel margins in our retail segment, on a sense-per-gallon basis, we earned 49.2 cents per gallon in the Q2 of 2026, compared to 37 cents per gallon in the Q2 of last year.

Maura Topper: Turning to our fuel margins in our retail segment, on a cents per gallon basis, we earned $0.492 per gallon in Q2 2026, compared to $0.37 per gallon in Q2 last year. As I mentioned earlier, the high level of fuel input cost volatility was the primary driver of elevated fuel margins throughout the quarter. Retailers generally continued to quickly transmit increased costs to the pump, providing a practical floor to fuel margins during this period, which benefited our results. Fuel margins have generally moderated as we have started Q3, though we and the industry continue to experience bouts of input cost volatility with their resulting impacts on margins.

Speaker #3: As I mentioned earlier, the high level of fuel input cost volatility was the primary driver of elevated fuel margins throughout the quarter. Retailers generally continued to quickly transmit increased costs to the pump, providing a practical floor to fuel margins during this period, which benefited our results.

Speaker #3: Fuel margins have generally moderated as we have started the third quarter, though we and the industry continue to experience bouts of input cost volatility with their resulting impacts on margins.

Speaker #3: With regards to fuel gross profit generally, our team remains focused on ensuring our retail locations are competitively priced to balance long-term customer loyalty with the day-to-day price volatility we are currently experiencing.

Maura Topper: With regards to fuel gross profit generally, our team remains focused on ensuring our retail locations are competitively priced to balance long-term customer loyalty with the day-to-day price volatility we are currently experiencing. We continue to believe in our strategic focus of controlling retail fuel pricing wherever possible to ensure our locations remain top of mind for customers in all price environments. Moving from our retail fuel operations to our store sales, our Q2 2026 results continued a series of important positive performance trends in this critical area of our business. On a same-store basis, our overall inside sales were relatively flat for Q2 compared to the prior year, with growth in the areas of other tobacco products and food, both branded and proprietary, offset by slow customer traffic in other areas.

Speaker #3: We continue to believe in our strategic focus of controlling retail fuel pricing wherever possible, to ensure our locations remain top of mind for customers in all price environments.

Speaker #3: Moving from our retail fuel operations to our store sales, our Q2 2026 results continued a series of important positive performance trends in this critical area of our business.

Speaker #3: On a same-store basis, our overall inside sales were relatively flat for the Q2, compared to the prior year. With growth in the areas of other tobacco products and food, both branded and proprietary, offset by slow customer traffic in other areas.

Speaker #3: Fuel demand does typically correlate to merchandise sales, so our ability to offset general customer traffic trends with the important investments we've made in recent years to expand our food operations at locations across our company-operated footprint contributed to our results this quarter.

Maura Topper: Fuel demand does typically correlate to merchandise sales. Our ability to offset general customer traffic trends with the important investments we've made in recent years to expand our food operations at locations across our company-operated footprint contributed to our results this quarter. We also saw a strong increase in Q2 in our merchandise margin percentage. We reported a merchandise margin gross profit percentage of 29.5%, up 130 basis points from the prior year. We benefited from a better merchandise mix and better execution in some of our core categories, primarily the important food and beverage categories, as well as cigarettes and other tobacco products.

Speaker #3: We also saw a strong increase in the Q2 in our merchandise margin, percentage. We reported a merchandise margin gross profit percentage of 29.5%, up 130 basis points from the prior year.

Speaker #3: We benefited from a better merchandise mix, and better execution in some of our core categories, primarily the important food and beverage categories as well as cigarettes and other tobacco products.

Speaker #3: The strong sales and margin percentage results contributed to an increase in our merchandise gross profit of 2% year over year, to $31 million, which we achieved in spite of a 9% decline in average company-operated site count during the quarter compared to Q2 of 2025.

Maura Topper: The strong sales and margin percentage results contributed to an increase in our merchandise gross profit of 2% year over year to $31 million, which we achieved in spite of a 9% decline in average company-operated site count during the quarter compared to Q2 2025. Jon will touch on this more in his comments. We also had a very positive quarter focusing on expense control in our retail locations. Our results in this area take a great amount of focus from our operations team, as well as technology-assisted improvements that are benefiting our operations. Moving on to the Wholesale segment. For Q2 2026, our Wholesale segment generated gross profit of $27.1 million compared to $24.9 million in Q2 2025, a 9% increase.

Speaker #3: John will touch on this more in his comments, but we also had a very positive quarter, focusing on expense control in our retail locations.

Speaker #3: Our results in this area take a great amount of focus from our operations team, as well as technology-assisted improvements that are benefiting our operations.

Speaker #3: Moving on to the wholesale segment, for the Q2 of 2026, our wholesale segment generated gross profit of 27.1 million dollars, compared to 24.9 million dollars in the Q2 of 2025.

Speaker #3: A 9% increase. The increase was primarily driven by an increase in fuel margin per gallon, partially offset by a decline in fuel volume and to a small extent rental income, the latter primarily driven by our class of trade change activities.

Maura Topper: The increase was primarily driven by an increase in fuel margin per gallon, partially offset by a decline in fuel volume and, to a small extent, rental income, the latter primarily driven by our class of trade change activities. Our Wholesale motor fuel gross profit increased 17% to $17.8 million in Q2 2026 from $15.2 million in Q2 2025. This was driven by a 31% increase in fuel margin per gallon, offset by an 11% decline in volume for the quarter. Wholesale segment volume during Q2 was impacted by many of the same challenges due to elevated prices that I discussed in my comments on the Retail segment.

Speaker #3: Our wholesale motor fuel gross profit increased 17% to 17.8 million dollars in the Q2 of 2026, from 15.2 million dollars in the Q2 of 2025.

Speaker #3: This was driven by a 31% increase in fuel margin per gallon, offset by an 11% decline in volume for the quarter. Wholesale segment volume during the Q2 was impacted by many of the same challenges due to elevated prices that I discussed in my comments on the retail segment.

Speaker #3: Our same-store performance in the wholesale segment was down approximately 8% year over year, so in line with our company-operated results. With the remaining wholesale segment volume decline, primarily due to the net loss of independent dealer contracts.

Maura Topper: Our same-store performance in the Wholesale segment was down approximately 8% year over year, in line with our company operating results, with the remaining Wholesale segment volume decline primarily due to the net loss of independent dealer contracts. Our Q2 fuel margin of $0.111 per gallon was a strong quarter as we continued to benefit from our fuel sourcing efforts and, in this quarter, higher payment terms discounts associated with our higher fuel costs in 2026. We also continued with our real estate optimization work during Q2, selling five properties and realizing approximately $2.7 million in proceeds. As we discussed in February 2025 was our biggest year ever in regards to property sales.

Speaker #3: Our Q2 fuel margin of 11.1 cents per gallon was a strong quarter, as we continue to benefit from our fuel sourcing efforts and, in this quarter, higher payment terms discounts associated with our higher fuel costs in 2026.

Speaker #3: We also continued with our real estate optimization work during the Q2, selling five properties and realizing approximately 2.7 million dollars in proceeds. As we discussed in February 2025 was our biggest year ever in regards to property sales.

Speaker #3: We are continuing our targeted real estate sales efforts in 2026, and we continue to have a strong pipeline for the balance of the year, though at a lower level than in 2025.

Maura Topper: We are continuing our targeted real estate sales efforts in 2026, we continue to have a strong pipeline for the balance of the year, though at a lower level than in 2025. Concluding my comments, Q2 continued a strong operating start to the year for CrossAmerica. Our priorities remain generating strong and durable cash flows from our operations, maintaining a disciplined approach to our balance sheet, and investing in the quality and competitiveness of our network. Before I turn it over to Jon, I want to be sure to thank our team members around the country for their hard work and dedication this quarter.

Speaker #3: Concluding my comments, the Q2 continued a strong operating start to the year for Crossamerica. Our priorities remain generating strong and durable cash flows from our operations, maintaining a disciplined approach to our balance sheet, and investing in the quality and competitiveness of our network.

Speaker #3: Before I turn it over to John, I want to be sure to thank our team members around the country for their hard work and dedication this quarter.

Speaker #3: Managing a business as diverse as ours always requires focus and effort from our team members, in our stores and around the country, especially in moments of volatility like we are experiencing in 2026.

Maura Topper: Managing a business as diverse as ours always requires focus and effort from our team members in our stores and around the country, especially in moments of volatility like we are experiencing in 2026, our leadership team appreciates all of your hard work. With that, I will turn it over to Jon for a more detailed financial review.

Speaker #3: And our leadership team appreciates all of your hard work. With that, I will turn it over to John for a more detailed financial review.

Speaker #1: Thank you, Maura. First of all, I feel deeply honored and blessed to serve as CFO, and I'm excited to work more closely with the broader organization in this expanded role.

Jon Benfield: Thank you, Maura. First of all, I feel deeply honored and blessed to serve as CFO, I'm excited to work more closely with the broader organization in this expanded role. Now, if you would please turn to slide six, I'll go over our Q2 financial results. We reported net income of $20.8 million and Adjusted EBITDA of $51.8 million for Q2 2026, compared to net income of $25.2 million and Adjusted EBITDA of $37.1 million for Q2 2025. Adjusted EBITDA increased 40%, or $14.7 million year over year.

Jonathan Benfield: Thank you, Maura. First of all, I feel deeply honored and blessed to serve as CFO, I'm excited to work more closely with the broader organization in this expanded role. Now, if you would please turn to slide six, I'll go over our Q2 financial results. We reported net income of $20.8 million and Adjusted EBITDA of $51.8 million for Q2 2026, compared to net income of $25.2 million and Adjusted EBITDA of $37.1 million for Q2 2025. Adjusted EBITDA increased 40%, or $14.7 million year over year.

Speaker #1: Now, if you would please turn to slide 6, I'll go over our Q2 financial results. We reported net income of 20.8 million dollars and adjusted EBITDA of 51.8 million dollars for the Q2 of 2026, compared to net income of 25.2 million dollars and adjusted EBITDA of 37.1 million dollars for the Q2 of 2025.

Speaker #1: Adjusted EBITDA increased 40%, or 14.7 million dollars, year over year. The decline in net income was primarily driven by a 29.7 million dollars in net gains that occurred during the Q2 of 2025 in connection with our ongoing real estate optimization efforts compared to 1.1 million dollars in net gains in the Q2 of 2026, partially offset by a decline in interest expense from 12.6 million dollars for the Q2 of 2025 to 11.3 million dollars for the Q2 of 2026.

Jon Benfield: The decline in net income was primarily driven by $29.7 million in net gains that occurred during Q2 2025 in connection with our ongoing real estate optimization efforts, compared to $1.1 million in net gains in Q2 2026, partially offset by a decline in interest expense from $12.6 million for Q2 2025 to $11.3 million for Q2 2026. Net income also benefited from lower impairment charges included in depreciation, amortization, and accretion expense. As I mentioned, Adjusted EBITDA increased significantly compared to the prior year period.

Jonathan Benfield: The decline in net income was primarily driven by $29.7 million in net gains that occurred during Q2 2025 in connection with our ongoing real estate optimization efforts, compared to $1.1 million in net gains in Q2 2026, partially offset by a decline in interest expense from $12.6 million for Q2 2025 to $11.3 million for Q2 2026. Net income also benefited from lower impairment charges included in depreciation, amortization, and accretion expense. As I mentioned, Adjusted EBITDA increased significantly compared to the prior year period.

Speaker #1: Net income also benefited from lower impairment charges included in depreciation amortization and accretion expense. As I mentioned, adjusted EBITDA increased significantly compared to the prior year period.

Speaker #1: As Maura noted in her comments, this increase was driven by a series of positive factors across the business, including an increase in motor fuel margin per gallon in both the retail and wholesale segments, an increase in merchandise gross profit in the retail segment, as well as a decline in operating expenses across both segments.

Jon Benfield: As Maura noted in her comments, this increase was driven by a series of positive factors across the business, including an increase in motor fuel margin per gallon in both the retail and wholesale segments, an increase in merchandise gross profit in the retail segment, as well as a decline in operating expenses across both segments. Our Distributable Cash Flow for Q2 2026 was $33.6 million, a solid increase over the $22.4 million for Q2 2025. The increase in Distributable Cash Flow was primarily due to a higher Adjusted EBITDA, along with lower cash interest expense, partially offset by higher sustaining capital expenditures and current income tax expense.

Jonathan Benfield: As Maura noted in her comments, this increase was driven by a series of positive factors across the business, including an increase in motor fuel margin per gallon in both the retail and wholesale segments, an increase in merchandise gross profit in the retail segment, as well as a decline in operating expenses across both segments. Our Distributable Cash Flow for Q2 2026 was $33.6 million, a solid increase over the $22.4 million for Q2 2025. The increase in Distributable Cash Flow was primarily due to a higher Adjusted EBITDA, along with lower cash interest expense, partially offset by higher sustaining capital expenditures and current income tax expense.

Speaker #1: Our distributable cash flow for the Q2 of 2026 was 33.6 million dollars, a solid increase over the 22.4 million dollars for the Q2 of 2025.

Speaker #1: The increase in distributable cash flow was primarily due to a higher adjusted EBITDA along with lower cash interest expense partially offset by higher sustaining capital expenditures and current income tax expense.

Speaker #1: The decline in interest expense we experienced during the quarter was due to a lower average interest rate and a lower average outstanding debt balance on our credit facility, due to our strong results combined with our asset sales.

Jon Benfield: The decline in interest expense we experienced during the quarter was due to a lower average interest rate and a lower average outstanding debt balance on our credit facility due to our strong results combined with our asset sales. Our Distribution Coverage Ratio for Q2 2026 was 1.68 times, compared to 1.12 times for the same period of 2025. For the trailing 12 months, our Distribution Coverage Ratio was 1.39 times compared to 1.00 times for the trailing 12 months ended 30 June 2025. During Q2 2026, the partnership paid a distribution of $0.525 per unit. Turning to the expense portion of our operations, in total across both segments, we reported operating expenses for Q2 2026 of $55 million, a $2.9 million decrease year over year and our seventh consecutive quarter of declining operating expenses across the organization.

Jonathan Benfield: The decline in interest expense we experienced during the quarter was due to a lower average interest rate and a lower average outstanding debt balance on our credit facility due to our strong results combined with our asset sales. Our Distribution Coverage Ratio for Q2 2026 was 1.68 times, compared to 1.12 times for the same period of 2025. For the trailing 12 months, our Distribution Coverage Ratio was 1.39 times compared to 1.00 times for the trailing 12 months ended 30 June 2025. During Q2 2026, the partnership paid a distribution of $0.525 per unit. Turning to the expense portion of our operations, in total across both segments, we reported operating expenses for Q2 2026 of $55 million, a $2.9 million decrease year over year and our seventh consecutive quarter of declining operating expenses across the organization.

Speaker #1: Our distribution coverage ratio for the Q2 of 2026 was 1.68 times compared to 1.12 times for the same period of 2025. For the trailing 12 months, our distribution coverage ratio was 1.39 times compared to 1.00 times for the trailing 12 months ended June 30, 2025.

Speaker #1: During the Q2 of 2026, the partnership paid a distribution of 52.5 cents per unit. Turning to the expense portion of our operations, in total across both segments, we reported operating expenses for the Q2 of 2026 of 55 million dollars, a 2.9 million dollar decrease year over year and our seventh consecutive quarter of declining operating expenses across the organization.

Speaker #1: Retail segment operating expenses for the Q2 declined 2.1 million dollars, or 4%, and wholesale segment operating expenses declined by 0.8 million dollars, or 11%.

Jon Benfield: Retail segment operating expenses for Q2 declined $2.1 million, or 4%, and wholesale segment operating expenses declined by $0.8 million, or 11%. In our retail segment, our average segment site count was down approximately 7% year over year. On a Same-Store, store level basis, operating expenses in our retail segment were down approximately 3% for Q2 2026 compared to Q2 2025. The decline was primarily driven by reduced store-level employment costs as we remain focused on efficient staffing in our stores. Returning to our wholesale segment, operating expenses declined by $0.8 million, or 11%, for the quarter. This decline was driven primarily by the decline in lessee dealer or controlled site count within the segment year over year due to asset sales and, to a lesser extent, conversions to our retail class of trade.

Jonathan Benfield: Retail segment operating expenses for Q2 declined $2.1 million, or 4%, and wholesale segment operating expenses declined by $0.8 million, or 11%. In our retail segment, our average segment site count was down approximately 7% year over year. On a Same-Store, store level basis, operating expenses in our retail segment were down approximately 3% for Q2 2026 compared to Q2 2025. The decline was primarily driven by reduced store-level employment costs as we remain focused on efficient staffing in our stores. Returning to our wholesale segment, operating expenses declined by $0.8 million, or 11%, for the quarter. This decline was driven primarily by the decline in lessee dealer or controlled site count within the segment year over year due to asset sales and, to a lesser extent, conversions to our retail class of trade.

Speaker #1: In our retail segment, our average segment site count was down approximately 7% year over year. On a same store store-level basis, operating expenses in our retail segment were down approximately 3% for the Q2 of 2026 compared to the Q2 of 2025, the decline was primarily driven by reduced store-level employment costs as we remained focused on efficient staffing in our stores.

Speaker #1: Returning to our wholesale segment, operating expenses declined by 0.8 million dollars, or 11%, for the quarter. This decline was driven primarily by the decline in lessey dealer or controlled site count within the segment year over year, due to asset sales and to a lesser extent conversions to our retail class of trade.

Speaker #1: We reported G&A expenses for the quarter of 6.8 million dollars, a slight increase year over year, primarily driven by higher legal fees and equity compensation expense.

Jon Benfield: We reported G&A expenses for the quarter of $6.8 million, a slight increase year over year, primarily driven by higher legal fees and equity compensation expense. We remain focused across the organization on efficient expense management at our locations as well as at the corporate level, ensuring that we are investing in customer-facing areas at our locations that will drive the long-term health and sustainability of our sites and driving operational efficiencies in our above-store operations. Moving to the next slide, we spent a total of $7.4 million on capital expenditures during Q2, with $2.5 million of that total being growth-related capital expenditures and $4.9 million of that being sustaining capital expenditures. Given our strong results for H1, we accelerated some maintenance capital spending this quarter with a continued focus on supporting the resiliency of our sites.

Jonathan Benfield: We reported G&A expenses for the quarter of $6.8 million, a slight increase year over year, primarily driven by higher legal fees and equity compensation expense. We remain focused across the organization on efficient expense management at our locations as well as at the corporate level, ensuring that we are investing in customer-facing areas at our locations that will drive the long-term health and sustainability of our sites and driving operational efficiencies in our above-store operations. Moving to the next slide, we spent a total of $7.4 million on capital expenditures during Q2, with $2.5 million of that total being growth-related capital expenditures and $4.9 million of that being sustaining capital expenditures. Given our strong results for H1, we accelerated some maintenance capital spending this quarter with a continued focus on supporting the resiliency of our sites.

Speaker #1: We remained focused across the organization on efficient expense management at our locations as well as at the corporate level, ensuring that we are investing in customer-facing areas at our locations that will drive the long-term health and sustainability of our sites and driving operational efficiencies in our above-store operations.

Speaker #1: Moving to the next slide, we spent a total of 7.4 million dollars on capital expenditures during the Q2, with 2.5 million dollars of that total being growth-related capital expenditures and 4.9 million dollars of that being sustaining capital expenditures.

Speaker #1: Given our strong results for the first 6 months of the year, we accelerated some maintenance capital spending this quarter, with a continued focus on supporting the resiliency of our sites.

Speaker #1: Regarding our growth capital expending, we remained focused on our company-operated locations, especially in food-related investments that will contribute to our merchandise sales and margin results.

Jon Benfield: Regarding our growth capital spending, we remain focused on our company-operated locations, especially in food-related investments that will contribute to our merchandise sales and margin results. One additional item I wanted to touch on is that we entered into an amendment of our credit facility on 15 July. The amendment, among other things, extends the maturity date from 31 March 2028 to 15 July 2031 and removes the SOFR credit spread adjustment. You can find additional details regarding this amendment in our Form 8-K filing filed with the SEC on 16 July. Turning to our balance sheet, the underlying performance of our segments, along with asset sale activities that Maura noted in her comments, helped us reduce our credit facility balance by approximately $10 million during the quarter.

Jonathan Benfield: Regarding our growth capital spending, we remain focused on our company-operated locations, especially in food-related investments that will contribute to our merchandise sales and margin results. One additional item I wanted to touch on is that we entered into an amendment of our credit facility on 15 July. The amendment, among other things, extends the maturity date from 31 March 2028 to 15 July 2031 and removes the SOFR credit spread adjustment. You can find additional details regarding this amendment in our Form 8-K filing filed with the SEC on 16 July. Turning to our balance sheet, the underlying performance of our segments, along with asset sale activities that Maura noted in her comments, helped us reduce our credit facility balance by approximately $10 million during the quarter.

Speaker #1: One additional item I wanted to touch on is that we entered into an amendment of our credit facility on July 15. The amendment, among other things, extends the maturity date from March 31, 2028, to July 15, 2031, and removes the SOFR credit spread adjustment.

Speaker #1: You can find additional details regarding this amendment in our Form 8K filing filed with the SEC on July 16. Turning to our balance sheet, the underlying performance of our segments along with asset sale activities that Maura noted in her comments helped us reduce our credit facility balance by approximately 10 million dollars during the quarter.

Speaker #1: The decrease in our balance, combined with our strong results here in 2026, resulted in a decrease in our credit facility defined leverage ratio to 3.57 times compared to 3.65 times as of June 30, 2025.

Jon Benfield: The decrease in our balance, combined with our strong results here in 2026, resulted in a decrease in our credit facility defined leverage ratio to 3.57x compared to 3.65x as of 30 June 2025. Our management team remains focused on the cash flow generation profile of our business. Utilizing our normal course operations and our targeted real estate optimization efforts to manage our leverage ratio at approximately 4x on a credit facility defined basis. A lower average interest rate environment also helped improve our interest expense during Q2 2026. Our cash interest declined from $12.1 million for Q2 2025 to $10.9 million in Q2 2026. Our existing interest rate swap portfolio continues to benefit us as well.

Jonathan Benfield: The decrease in our balance, combined with our strong results here in 2026, resulted in a decrease in our credit facility defined leverage ratio to 3.57x compared to 3.65x as of 30 June 2025. Our management team remains focused on the cash flow generation profile of our business. Utilizing our normal course operations and our targeted real estate optimization efforts to manage our leverage ratio at approximately 4x on a credit facility defined basis. A lower average interest rate environment also helped improve our interest expense during Q2 2026. Our cash interest declined from $12.1 million for Q2 2025 to $10.9 million in Q2 2026. Our existing interest rate swap portfolio continues to benefit us as well.

Speaker #1: Our management team remains focused on the cash flow generation profile of our business, utilizing our normal course operations and our targeted real estate optimization efforts to manage our leverage ratio at approximately 4 times on a credit facility defined basis.

Speaker #1: A lower average interest rate environment also helped improve our interest expense during the Q2 of 2026. Our cash interest declined from 12.1 million dollars for the Q2 of 2025 to 10.9 million dollars in the Q2 of 2026.

Speaker #1: Our existing interest rate swap portfolio continues to benefit us as well, at this time about 60% of our current credit facility balance is swapped to a fixed rate of approximately 3.4% blended and our effective interest rate on the total credit facility at the end of the Q2 was 5.5%.

Jon Benfield: At this time, about 60% of our current credit facility balance is swapped to a fixed rate of approximately 3.4% blended, and our effective interest rate on the total credit facility at the end of Q2 was 5.5%. In conclusion, the partnership has had a strong H1 2026 and is positioned for continued success as we move deeper into the year. Our strong results, along with our asset sales, enabled us to reduce our debt by $20 million this year so far, while also positioning our portfolio to generate durable and consistent cash flows into the future. We are looking forward to H2 of the year, maintaining a strong balance sheet and generating value for our unitholders. With that, we will open it up for questions.

Jonathan Benfield: At this time, about 60% of our current credit facility balance is swapped to a fixed rate of approximately 3.4% blended, and our effective interest rate on the total credit facility at the end of Q2 was 5.5%. In conclusion, the partnership has had a strong H1 2026 and is positioned for continued success as we move deeper into the year. Our strong results, along with our asset sales, enabled us to reduce our debt by $20 million this year so far, while also positioning our portfolio to generate durable and consistent cash flows into the future. We are looking forward to H2 of the year, maintaining a strong balance sheet and generating value for our unitholders. With that, we will open it up for questions.

Speaker #1: In conclusion, the partnership has had a strong first half of 2026 and is positioned for continued success as we move deeper into the year.

Speaker #1: Our strong results, along with our asset sales enabled us to reduce our debt by 20 million dollars this year so far, while also positioning our portfolio to generate durable and consistent cash flows into the future.

Speaker #1: We are looking forward to the back half of the year maintaining a strong balance sheet and generating value for our unit holders. With that, we will open it up for questions.

Speaker #2: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star button followed by the number 1 on your touchtone phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star button followed by the number 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by the number 2. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question.

Speaker #2: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by the number 2.

Speaker #2: If you are using a speakerphone, please lift the hands up before pressing any keys. One moment, please, for your first question.

Speaker #3: Seeing that we don't have any questions for the moment, thank you, everyone, for joining us here this morning. Should you have any follow-up questions, please feel free to reach out.

Maura Topper: Seeing that we don't have any questions for the moment, thank you everyone for joining us here this morning. Should you have any follow-up questions, please feel free to reach out. Have a great day.

Speaker #3: Have a great day.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and please ask that you disconnect your lines. Have a great day.

Speaker #2: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and please ask that you disconnect your lines. Have a great day.

Q2 2026 CrossAmerica Partners LP Earnings Call

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