CrossAmerica Partners LP

What they do

CrossAmerica distributes branded motor fuel (ExxonMobil, BP, Marathon, Shell, Valero, and Phillips 66) to approximately 1,600 sites across 34 states, operating through wholesale and retail segments. The wholesale segment supplies independent dealers and lessee dealers, while the retail segment operates company-operated sites, including convenience stores that sell food and merchandise. The company also generates rental income from leasing properties to dealers.

Revenue drivers

• Wholesale motor fuel distribution — Distributed 483 million gallons to independent dealers and 206 million gallons to lessee dealers in 2025; pricing is largely rack-based plus a fixed margin for about 54% of gallons sold.
• Retail motor fuel sales — Company-operated sites distributed 378 million gallons in 2025; gross profit per gallon improved to $0.492 in Q2 2026 from $0.370 in Q2 2025.
• Convenience merchandise sales — Food and merchandise sales totaled $407 million in 2025, with Q2 2026 merchandise gross profit of $31.0 million at a 29.5% margin.
• Rental income — Leases and subleases real estate to dealers; company owns about 56% of properties leased or used in retail, contributing stable fee-based revenue.

Recent performance

For Q2 2026, CrossAmerica reported net income of $20.8 million, Adjusted EBITDA of $51.8 million, and distributable cash flow of $33.6 million. Retail segment gross profit rose to $85.7 million from $76.1 million in Q2 2025, while wholesale segment gross profit increased to $27.1 million from $24.9 million. Revenue for the quarter was $1.18 billion. The company reduced leverage to 3.57x as of June 30, 2026, and distribution coverage for the trailing twelve months improved to 1.39x.

Strategy

Management emphasizes disciplined execution, cost management, and paying down its credit facility. The company continues optimizing its real estate portfolio, converting sites between classes of trade (e.g., lessee dealer to company-operated) to maximize value. It seeks growth through acquisitions and capital investments, targeting improved return on capital and distribution growth. Recent focus includes strengthening convenience store merchandise margins and maintaining a strong balance sheet.

Risks

• Fuel price volatility — Crude oil and wholesale fuel price swings directly affect revenues and gross profit, and timing of retail price pass-through can compress margins.
• Seasonality — Volume is highest in summer months and lowest in winter, causing quarterly earnings variability.
• Interest rate exposure — Higher interest rates and debt levels (long-term debt of $720.8M) increase interest expense and reduce distributable cash flow.
• Competition — Both wholesale fuel distribution and retail convenience store industries are intensely competitive and fragmented, pressuring margins.

Outlook

Management expects continued growth in Adjusted EBITDA and distributable cash flow, driven by improved fuel margins and merchandise performance. They plan to further strengthen the balance sheet by paying down debt, providing flexibility for investments. Forward-looking statements note risks from geopolitical tensions, trade policy, and fuel demand changes, but no specific guidance was provided.