Star Group, L.P.

What they do

Star Group distributes home heating oil, propane, and motor fuels to residential and commercial customers, and provides related heating and services. Operations are conducted through subsidiaries including Petro Holdings, Petroleum Heat and Power Co., Inc., Meenan Oil LLC, Champion Energy LLC, and Griffith Energy Services, Inc. The company has one reportable operating segment.

Revenue drivers

• Home heating oil and propane sales — Core product volumes; 32.8 million gallons sold in the fiscal 2026 third quarter, down 9.4% year-over-year, and 271.2 million gallons in the first nine months of fiscal 2026, up 3.3%.
• Service and installation — Heating-related services and equipment installation; profitability improved in the quarter per management.
• Other petroleum products — Includes motor fuels; contributed additional gross profit in the quarter.

Recent performance

In the fiscal 2026 third quarter (ended June 30, 2026), total revenue rose 17.2% to $358.1 million from $305.6 million, driven by higher selling prices. Net loss increased to $28.0 million from $16.6 million, due to a $8.6 million unfavorable change in derivative fair value and higher expenses. Adjusted EBITDA loss widened to $17.7 million from $10.6 million. For the nine months ended June 30, 2026, revenue increased 8.3% to $1.7 billion and net income rose to $116.1 million from $102.2 million. Volumes declined 9.4% in the quarter but rose 3.3% year-to-date, with temperatures 15.9% colder than the prior-year quarter but 5.9% warmer than normal.

Strategy

Management says it is actively assessing acquisition opportunities, having completed none in the latest quarter. The company is taking steps to improve operations and streamline where appropriate, and continues to invest in its service and installation business where it sees growth potential. It aims to prepare for the coming winter months and maintain its distribution footprint.

Risks

• Weather sensitivity — Colder-than-normal temperatures increase volumes, but warmer winters reduce demand; fiscal 2026 third quarter volumes still fell despite colder weather.
• Wholesale price volatility — Rising home heating oil and diesel prices can pressure margins and cause customer conservation and attrition.
• Customer attrition — Net customer losses continue to offset gains from acquisitions and colder weather, as seen in the quarter.
• Regulatory and electrification risks — Natural gas conversions, electrification of heating systems, and GHG emission regulations could reduce demand for heating oil.

Outlook

Management expects seasonal factors to continue, with no acquisitions completed but a number of opportunities under assessment. They are preparing for the winter season and investing in service and installation for growth. The company faces ongoing volatility in wholesale costs, including the NYMEX ultra low sulfur diesel contract closing at $4.12 per gallon on July 31, 2026.