CrossAmerica's Retail Segment Delivers 'Solid' Q4 2024 Results Despite Challenges
ALLENTOWN, Pa. — While CrossAmerica Partners LP's full-year 2024 results were impacted by a challenging first quarter and inflationary pressures on its core retail customers, the partnership delivered a solid fourth quarter with growth in same-store retail gallons and sales.
"Our fourth-quarter retail results were against an overall industry backdrop for the quarter of weak fuel demand and soft inside store sales. In that context, our retail results — particularly our same-store volume and same-store inside store sales, both of which outperformed the market — were solid," Charles Nifong, CrossAmerica's president and CEO, said during the company's fourth-quarter and full-year 2024 earnings call on Feb. 26.
For the quarter, its retail segment generated a 9% increase in gross profit, totaling $75.1 million. The increase was attributed to the segment's average site count being approximately 22% higher vs. the year-ago period as a result of the conversion of certain lessee dealer and commission agent sites to company-operated sites.
CrossAmerica's 2024 Earnings
Same-store retail segment fuel volume increased 2%, from 117.5 million gallons during the fourth quarter of 2023 to 119.9 million gallons for the fourth quarter of 2024. Based on national demand data available, gasoline demand was down approximately 4% nationally for the quarter, Nifong noted.
On a same-site basis, Q4 inside sales were up 1% vs. the year-ago quarter. Inside sales, excluding cigarettes, increased 2% year over year. Merchandise gross profit inched up from 28.2% in Q4 2023 to 28.4% in Q4 2024.
"So again, on a relative basis, our retail segment inside sales outperformed the industry for the quarter," Nifong said, adding that the performance was primarily led by the packaged beverages and other tobacco categories as in the prior quarters.
Full-Year Retail Results
CrossAmerica's retail segment generated a 14% increase in gross profit for 2024. The increase was primarily due to increases in merchandise (+22%) and other revenue (+23%). Operating expenses rose $39.5 million, or 25%, for the full year primarily due to a 25% increase in the average company-operated store count.
For full-year 2024, CrossAmerica's merchandise gross profit and other revenue increased $23.8 million, or 23%, when compared to full-year 2023. Same-store merchandise sales, excluding cigarettes, decreased 1% for the full year. Merchandise gross profit dropped to 28.2% from 28.4% for full-year 2023.
The retail segment sold 554.5 million gallons, an increase of 9% year over year. The increase was attributed to CrossAmerica's increase in company-operated and commission sites.
The average fuel margin per gallon for the retail segment was relatively flat during 2024. Same-store retail fuel volume was 449.3 million gallons, a slight decrease from the 453.8 million same-store gallons for full-year 2023.
Other Financials
Other Q4 and full-year 2024 results reported by CrossAmerica included:
- Net income for Q4 was $16.9 million and $22.5 million for the full year.
- Adjusted EBITDA for Q4 was $35.5 million and $145.5 million for the full year.
- Operating expenses in the retail segment increased 32% year over year for Q4, while the average segment site count was up 22%.
Additionally, for the three months ended Dec. 31, CrossAmerica sold 11 sites for $17.3 million in proceeds, resulting in a net gain of $11.6 million. For the 12 months ended Dec. 31, CrossAmerica sold 30 properties for $36.3 million in proceeds, resulting in a net gain of $23.3 million. These sales were part of CrossAmerica's ongoing real estate rationalization and class-of-trade optimization efforts.
Allentown-based CrossAmerica Partners is a wholesale distributor of motor fuels, a convenience store operator, and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is indirectly owned and controlled by entities affiliated with Joseph V. Topper, Jr., the founder of CrossAmerica Partners and a member of the board of the general partner since 2012.
Formed in 2012, CrossAmerica Partners LP is a distributor of branded and unbranded petroleum for motor vehicles in the United States. It distributes fuel to approximately 1,600 locations, and owns or leases approximately 1,100 sites. Its geographic footprint covers 34 states.
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