CrossAmerica Partners LP - 10-Q Summary (Q2 2026)
Business Context and Reporting Period
This filing covers the quarterly period ended June 30, 2026. CrossAmerica Partners LP (CAPL) operates in two primary segments: Wholesale (distribution of motor fuel to lessee and independent dealers) and Retail (operation of retail sites selling fuel and convenience merchandise). The company continues to execute a real estate optimization strategy, converting sites between classes of trade and divesting lower-performing assets.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Operating Revenues | $1,179.0 million | $961.9 million | $2,020.8 million | $1,824.4 million |
| Gross Profit | $112.8 million | $101.0 million | $210.4 million | $190.8 million |
| Operating Income | $35.3 million | $41.5 million | $59.0 million | $43.5 million |
| Net Income | $20.8 million | $25.2 million | $31.5 million | $18.1 million |
| Net Income Available to LPs | $20.1 million | $24.5 million | $30.1 million | $16.7 million |
| Diluted EPS | $0.52 | $0.64 | $0.78 | $0.44 |
| Adjusted EBITDA | $51.8 million | $37.1 million | $86.9 million | $61.4 million |
| Distributable Cash Flow | $33.6 million | $22.4 million | $55.1 million | $31.5 million |
| Debt & Finance Leases (Total) | $730.6 million (as of June 30, 2026) | |||
| Cash & Equivalents | $4.9 million (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Operating revenues increased 23% in Q2 2026 and 11% YTD 2026 compared to the prior year. This was driven primarily by a significant increase in average fuel selling prices (up 43% in Q2 and 24% YTD) due to higher crude oil prices (WTI average $95.65/bbl in Q2 2026 vs. $64.57/bbl in Q2 2025).
- Volume Decline: Despite price increases, fuel sales volumes decreased 11% in Q2 and 9% YTD due to a reduction in base business volume and the net loss of independent dealer contracts.
- Asset Optimization: Gains on dispositions and lease terminations dropped significantly to $1.1 million in Q2 2026 from $28.4 million in Q2 2025, reflecting a slower pace of asset sales compared to the prior year. Depreciation and impairment charges also decreased substantially.
- Segment Performance:
- Retail: Operating income increased 46% in Q2 and 67% YTD, driven by higher fuel margins per gallon (up 33% in Q2) and improved merchandise gross profit percentages.
- Wholesale: Operating income increased 17% in Q2 but was flat YTD. Margin per gallon improved, but volume declines and reduced rent gross profit (due to site sales) offset gains.
Guidance, Outlook, and Risks
- Outlook: Management anticipates continued volatility in crude oil prices impacting gross profit. The company plans to continue divesting lower-performing assets and converting sites to higher-value classes of trade. Proceeds from sales are expected to be used to pay down debt, reducing interest expense.
- Debt Amendment: On July 15, 2026, the company amended its Credit Facility, extending the maturity date to July 15, 2031. The amendment removed the SOFR credit spread adjustment and set a Consolidated Leverage Ratio covenant of not greater than 5.00:1.00 through Q3 2027, stepping down to 4.75:1.00 thereafter.
- Liquidity: As of July 31, 2026, availability under the Credit Facility was $244.2 million. The company maintains a Distribution Coverage Ratio of 1.38x for the six months ended June 30, 2026.
- Risks: Key risks include motor fuel price volatility, geopolitical conflicts affecting supply, competition, environmental liabilities, and the ability to comply with debt covenants. The company notes that distributions are discretionary and not guaranteed.
Investor Verification Checklist
- Volume Trends: Verify the sustainability of the 9-11% volume decline in fuel sales and the impact of lost independent dealer contracts on future revenue.
- Asset Sales Pace: Confirm the pipeline for future asset divestitures, as the significant drop in "Gain on dispositions" from 2025 levels may impact future non-operating income.
- Debt Covenants: Monitor the Consolidated Leverage Ratio to ensure compliance with the new 5.00:1.00 threshold post-amendment.
- Related Party Transactions: Review the Omnibus Agreement expenses ($61.2 million YTD) and fuel sales to TopStar ($22.0 million YTD) for potential conflicts or dependency risks.
- Environmental Liabilities: Assess the $9.8 million recorded environmental liability and the adequacy of indemnification assets ($8.4 million) given the nature of the business.