Yesway Q1 Earnings Call Highlights

Key Points

• Yesway posted record Q1 results in its first earnings call as a public company, with adjusted EBITDA jumping 112.9% year over year to $59.2 million and net income turning to $30.2 million from a loss a year earlier.
• Fuel margins were a major driver, as fuel sales rose 16% to $464.3 million and margin expanded to $0.494 per gallon, helped by volatile fuel pricing and Yesway’s rural footprint and diesel-heavy mix.
• Management raised 2026 guidance, projecting adjusted EBITDA of $210 million to $220 million and six to eight new store openings, while also planning to sell 29 stores in Iowa and Kansas to focus on core markets.

Yesway NASDAQ: YSWY reported record first-quarter results in its first earnings call as a public company, with management citing strong fuel margins, higher merchandise sales and improved cost controls as key drivers of profitability.

Chairman, President and Chief Executive Officer Tom Trkla said the convenience store operator delivered “record first quarter results” and entered the second quarter with continued momentum. As of March 31, 2026, Yesway operated 449 stores, making it the 15th-largest convenience store operator in the United States, according to Trkla.

The company’s adjusted EBITDA rose 112.9% year over year to $59.2 million, while net income increased to $30.2 million from a net loss of $5.6 million in the prior-year period. Store contribution increased 72.7% to $74.6 million.

Fuel Margins Drive Profitability

Fuel sales increased 16% year over year to $464.3 million in the first quarter, while fuel margin rose 48.5% to $0.494 per gallon. Same-store fuel gallons sold increased 0.2%, and same-store fuel gross profit rose 38.5% from the prior-year period.

Chief Financial Officer Ericka Ayles said geopolitical developments in the Middle East had increased fuel price volatility across the industry, benefiting retailer profitability. She said retail prices generally rise as wholesale costs increase, protecting cents-per-gallon margins, while retail prices can lag when wholesale costs ease.

“Volatile pricing environments can benefit both CPG margin and fuel gross profit dollars,” Ayles said.

Management also pointed to structural advantages in Yesway’s fuel business, including local refinery partnerships, its rural footprint and a high diesel mix. Trkla said diesel represented approximately 38% of total fuel volume in the quarter. Ayles later said the company expects diesel penetration to increase slightly as new stores enter the reporting base.

In response to an analyst question on whether current fuel margins are temporary or structural, Ayles said Yesway delivered cents-per-gallon margins in the low 40s in 2025 and had a trailing 12-month margin of 43.8% through the first quarter of 2026. “Structurally, we are likely to be in the low 40s today,” she said, while noting that new stores with higher diesel exposure could naturally lift that level over time.

Inside Merchandise Sales Continue to Grow

Inside merchandise sales rose 9.5% year over year to $213.7 million, or 4.5% on a same-store basis. Same-store inside merchandise gross profit increased 9.8%, and total same-store gross profit rose 21.8%.

Ayles said the inside sales increase was driven primarily by pricing initiatives taken during the fourth quarter of 2025 and the first quarter of 2026. She said those actions are expected to continue benefiting same-store inside sales for the remainder of the year.

The company also reported a 190-basis-point improvement in inside gross margin. Ayles attributed much of the margin growth to new stores contributing a higher foodservice mix, as well as pricing actions that produced “very good results.”

Asked about customer behavior after higher gasoline prices, Trkla said Yesway has seen only modest changes. He said the company’s rural focus and value positioning have supported resilient demand, with the chain offering $4, $5 and $6 meals. Ayles said Yesway has seen some trade-down behavior in fuel grades, such as from premium to mid-grade and mid-grade to regular, but said inside-store transactions were positive and merchandise basket size increased during the quarter.

Costs, Store Base and Balance Sheet

Same-store operating expenses declined 2.8% year over year. Ayles said a labor efficiency initiative introduced at the beginning of last year has reduced same-store labor hours over the past four quarters, including a 3.5% decline in the first quarter.

Yesway opened one new store during the quarter and ended the period with 449 stores. The current store count includes 29 stores in Iowa and Kansas that the company has agreed to sell as part of a strategy to sharpen its operational focus, simplify its supply chain footprint and concentrate on core regions. Ayles said the sale is expected to close by the end of fiscal 2026.

As of March 31, Yesway had $56.5 million in cash and cash equivalents and approximately $649.5 million in total debt. Net cash provided by operating activities was $48.4 million, up from $13.6 million in the prior-year period. Capital expenditures totaled approximately $11 million, compared with $26.3 million a year earlier.

Trkla also reviewed the company’s April initial public offering, which raised approximately $322 million in net proceeds including the full exercise of the greenshoe option. He said the proceeds were used to fully redeem preferred equity and repay $10 million of debt, with an additional $20 million debt repayment made after the offering closed.

2026 Guidance Introduced

Yesway issued fiscal 2026 guidance that reflects first-quarter strength and momentum through the first two months of the second quarter. The company expects:

• Same-store inside merchandise sales growth of 1.25% to 3.25%;
• Adjusted EBITDA of $210 million to $220 million;
• Capital expenditures of $85 million to $95 million;
• Six to eight new store openings in 2026, including the one opened in the first quarter.

Ayles said the guidance excludes the 29 Iowa and Kansas stores expected to be sold before year-end. She also said Yesway moved three stores in its pipeline from build-to-suit to self-funded projects as it leverages recent business performance and maintains strategic flexibility.

Management said same-store sales and gallons remained positive through the end of May, though Ayles said same-store inside sales are expected to decelerate from the first quarter. She noted that the first quarter benefited from fewer major weather disruptions than the prior-year period and strength in weather-correlated categories such as packaged beverages.

Growth Focuses on New Stores, Arizona and Select M&A

Trkla said Yesway remains focused on new store development, selective acquisitions, technology investments and product expansion. The company has completed 27 acquisitions since its 2015 founding, including the 2019 acquisition of Allsup’s.

During the question-and-answer session, Trkla said the company has “well over” its needed store delivery pipeline in land under contract or negotiation for future openings. He said Yesway feels “very good” about 2026 and 2027 deliveries and is working to accelerate outer-year opportunities using excess cash generated by fuel margins.

Trkla highlighted Arizona as a key growth market, saying it has traditionally higher fuel margins than New Mexico and West Texas. He said Arizona is likely to be Yesway’s highest-growth state among its current focus markets of Oklahoma, New Mexico, Texas and Arizona “in the foreseeable future.”

On foodservice, Trkla said Yesway is not aiming to become a quick-service restaurant but is looking at incremental innovation around its proprietary foodservice platform. He said the company sells 41 million proprietary foodservice items, including 24 million of Allsup’s burritos, and described the burrito as central to the company’s value proposition.

Trkla said Yesway is also evaluating private-label enhancements and SKU optimization to simplify product offerings and operations. Ayles said loyalty penetration was about 18.5% of inside-store sales and roughly 15% of gallons transactions in the quarter, and that the company is considering targeted marketing to loyalty members, including potential vendor-funded efforts.

About Yesway NASDAQ: YSWY

Yesway, traded on NASDAQ under the ticker YSWY, is a U.S.-based convenience store and fuel retail company that operates retail locations under the Yesway brand. The company's core business is the operation of neighborhood convenience stores that provide quick-purchase retail items, on-site prepared foods, beverages and other convenience merchandise. Many locations also feature fuel dispensing, making Yesway a combined convenience and gasoline retailer for everyday consumers and motorists.

Yesway's stores focus on high-turnover product categories typical of the convenience-retail sector, including snacks, cold beverages, coffee, single-serve and prepared food offerings, and commonly purchased household items.

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