CrossAmerica Partners Q4 Earnings Call Highlights

Key Points

• CrossAmerica finished Q4 with stronger earnings—Adjusted EBITDA rose 22% to $43.4M, distributable cash flow increased to $28.5M and distribution coverage improved to 1.43x, while the partnership paid a distribution of $0.525 per unit.
• Operationally margins improved: the retail fuel margin climbed 19% to 44.9¢/gal (retail gross profit up 10% to $82.9M) despite an 8% same-store fuel volume decline, and wholesale fuel margin rose 13% to 9.3¢/gal even as wholesale volumes fell about 6%.
• Balance-sheet progress was driven by record asset sales—CrossAmerica generated more than $100M of proceeds in 2025, used to pay down debt (credit facility ending at $692.3M) and reduce leverage to 3.51x, lowering cash interest expense heading into 2026.

CrossAmerica Partners NYSE: CAPL reported a stronger finish to 2025, highlighting higher fuel margins, improved retail merchandise performance, and continued progress on expense controls and balance sheet deleveraging during its fourth-quarter and full-year earnings call held Feb. 26, 2026.

Fourth-quarter results driven by fuel margins and expense discipline

Management described the fourth quarter as “very solid,” with strength in both retail and wholesale fuel margins and continued improvement in operating expenses. The partnership reported net income of $10.2 million and Adjusted EBITDA of $43.4 million for the fourth quarter of 2025, compared with net income of $16.9 million and Adjusted EBITDA of $35.5 million in the prior-year period. Adjusted EBITDA increased 22% year over year.

Chief Financial Officer Maura Topper said net income declined primarily due to lower net gains on asset dispositions versus the prior year, partially offset by lower interest expense. Distributable Cash Flow rose to $28.5 million from $21.1 million, and the distribution coverage ratio improved to 1.43x from 1.06x. CrossAmerica paid a distribution of $0.525 per unit during the quarter.

Total operating expenses across both segments were $57.3 million, down $2.0 million year over year and marking what management said was the fifth consecutive quarter of declining operating expenses.

Retail segment: higher margins offset lower fuel volumes

CEO Charles Nifong said retail performance benefitted from strong fuel margins, modest inside sales growth, and higher merchandise margins. For the fourth quarter, retail segment gross profit increased 10% to $82.9 million from $75.1 million a year earlier, driven primarily by motor fuel gross profit.

On a cents-per-gallon basis, the retail fuel margin rose 19% year over year to 44.9 cents per gallon, up from 37.6 cents per gallon. Nifong attributed the improvement to crude oil prices trending down during the quarter, better sourcing costs, and favorable retail market conditions.

Fuel volumes were weaker. On a same-store basis, total retail fuel volume declined 8% year over year, with company-operated volumes down about 6% and commission-site volumes down about 11%. Nifong noted the prior-year quarter was “particularly strong” for volumes at company-operated locations, and he also pointed to deliberate pricing strategy changes at selected commission sites as the partnership worked to optimize the balance between volume and margin following conversions completed during 2025.

Inside sales were “slightly up” on a same-store basis for the quarter, and inside sales excluding cigarettes increased 1% year over year. Nifong said food—both branded and proprietary—contributed positively to same-store growth. Merchandise gross profit increased 3% to $28.8 million, supported by higher sales and an increase in merchandise margin percentage of about 70 basis points. Management cited growth in higher-margin categories such as other tobacco products and a shift from a commission-based model to owning and selling certain products directly, as well as improved execution in specific categories.

CrossAmerica ended the quarter with 352 company-operated retail sites, down one from the third quarter and down 13 versus the fourth quarter of 2024. The company said the change reflected asset sales and class-of-trade conversions completed during the year.

Wholesale segment: margins improved as volumes and rent declined

In wholesale, gross profit declined 7% to $24.2 million from $25.9 million a year earlier, primarily due to lower fuel volumes and rental income, partially offset by an increase in fuel margin.

Wholesale motor fuel gross profit increased 6% to $15.7 million, and the wholesale fuel margin increased 13% to 9.3 cents per gallon from 8.2 cents per gallon. Management again cited better sourcing costs and favorable crude oil price movements.

Wholesale volume was 168.9 million gallons, down 6% from 180.5 million gallons in the prior-year quarter. Nifong said the volume decline was partly due to conversion of certain lessee dealer sites into company-operated and commission agent sites, which shifted those gallons into the retail segment. On a same-store basis, wholesale volume was down approximately 3.5% year over year.

Wholesale base rent fell to $8.1 million from $10.3 million a year earlier, reflecting site conversions and real estate rationalization efforts. Nifong emphasized that for converted sites, economics that previously appeared as rent are now reflected in retail fuel and store margins.

Full-year 2025: retail growth, wholesale decline, and record asset sales

For the full year, CrossAmerica reported net income of $41.8 million and Adjusted EBITDA of $146.0 million, compared with net income of $22.5 million and Adjusted EBITDA of $145.5 million in 2024. Topper said Adjusted EBITDA was roughly flat, while net income increased primarily due to gains on sale from real estate optimization, partially offset by higher tax expense, and aided by lower interest expense.

Retail segment gross profit increased 4% to $302.2 million. Merchandise gross profit rose $6.3 million (6%) and motor fuel gross profit increased $6.3 million (4%). On a same-store basis, retail fuel volume decreased 4% for the year, which management said was roughly in line with national demand data, while store sales excluding cigarettes increased 2%.

Wholesale segment gross profit declined 7% to $100.5 million, driven by a 7% drop in fuel volume to 688.7 million gallons from 743.5 million gallons in 2024. Same-site wholesale volume was down about 3%. Full-year wholesale fuel margin improved to 9.1 cents per gallon from 8.5 cents per gallon.

The partnership emphasized its real estate rationalization program. During the fourth quarter, it sold 11 sites for approximately $8.8 million in proceeds, which it primarily used to pay down debt. For the full year, CrossAmerica generated more than $100 million of asset sale proceeds, which management called the largest volume of asset sales in its history. Nifong said the partnership has a “strong pipeline” for 2026, though he does not expect sales to match 2025’s record level.

Balance sheet, interest expense, and early 2026 trends

Topper said asset sale activity reduced the credit facility balance by approximately $13 million during the fourth quarter and by $75 million for the full year, ending 2025 with $692.3 million outstanding. CrossAmerica’s credit facility-defined leverage ratio declined to 3.51x at year-end 2025 from 4.36x at Dec. 31, 2024. Management said it remains focused on managing leverage at approximately 4x on a credit facility-defined basis.

Lower debt levels and a lower average interest rate reduced cash interest expense. Fourth-quarter cash interest declined to $10.5 million from $12.9 million a year earlier, and full-year cash interest declined to $46.2 million from $50.4 million. Topper added that more than 55% of the current credit facility balance is swapped to a fixed rate of about 3.4% blended, and the effective interest rate on the credit facility was 5.6% at the end of the fourth quarter.

Operationally, management said the partnership entered 2026 with a stronger fuel margin environment than it experienced in the first part of the prior two years. Nifong said retail fuel margins since quarter end have been slightly below the fourth quarter’s very strong levels but still “very favorable,” and he noted same-store inside sales have been up about 2.5% since the quarter ended. No analyst questions were asked during the call’s question-and-answer period.

About CrossAmerica Partners NYSE: CAPL

CrossAmerica Partners LP NYSE: CAPL is a publicly traded master limited partnership engaged in the wholesale distribution of motor fuels across the United States. The company procures, transports and stores refined petroleum products including gasoline, diesel fuel, kerosene, heating oil and select renewable fuel blends. Through its integrated network of pipelines, terminals and truck fleets, CrossAmerica Partners supplies fuel to a broad base of customers, including convenience stores, supermarket chains, travel centers and independent marketers.

Formed in 2014 as a spin-off of Sunoco's wholesale fuel business, CrossAmerica Partners acquired refined petroleum distribution assets and entered into long-term supply agreements designed to deliver stable, fee-based revenues.

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