Parkland Delivers Record Earnings During Q2 2024

"As you know, the Parkland team likes to win," Espey said during the company's latest earnings call on Aug. 1. "We are focused on executing our strategy and improving our returns, specifically by growing our market share through investing in our brands and customer experience, and building our supply advantage across our business through a common supply platform, ensuring we can sustain future growth by investing in our core processes and systems. This gives me confidence in our ability to finish the year strong, on route to achieving our 2028 targets."

For the quarter, the company reported year-over-year growth in every segment but its U.S. operations, although it noted that this segment has made significant improvements and is trending to plan — with the exception of Parkland's Florida retail and supply businesses, which remain an ongoing area of focus. 

Conversely, performance in Canada saw significant improvement based on consistent execution, the ongoing uplift from organic growth investments and the successful integration of strategic acquisitions such as Husky and Vopak, according to the company.

Following up on efforts to optimize store design and merchandising capabilities in Canada, and based on its experience in the alcohol category in Quebec, Parkland plans to add alcohol sales in 120 convenience stores in the country by the end of the year and expects it to become a top category.

[Read more: Second Parkland Shareholder Backs Call for Change]

In the United States, Parkland observed declines in retail and commercial fuel volumes compared to 2023. Chief Financial Officer Marcel Teunissen cited higher fuel prices, weather, changes in consumer behavior and some indications of economic slowdown as factors.

"If we look at our U.S. business by region, we see differences in performance. Our northern mid-continent business, which includes Idaho, Utah, Montana and the Dakotas, is tracking to plan despite some industrywide volume declines," Teunissen said. "There, the team has been able to offset these trends with targeted cost-saving initiatives. These include more than 300 staff reductions since January 2023, the elimination of 150 underutilized trucks and the consolidation of regional branches."

Teunissen noted that Parkland's commercial business in Florida is on track, but its retail and supply businesses "have yet to reach their full potential." The company renegotiated pricing with suppliers following the loss of market share during the first quarter of 2024.

"We are encouraged by the improvement in the U.S. in the second quarter. However, there is more work to do," he said. "The team remains focused on executing our integrated strategy, rebranding stores, implementing merchandising and procurement initiatives, and optimizing our labor and logistics operations."

Q2 2024 HIGHLIGHTS

United States: Adjusted EBITDA was $49 million, down 34% from $74 million during the second quarter of 2023. Parkland cited lower diesel and gasoline market demand, as well as lower unit fuel margins due to unfavorable commodity price movements, as driving factors.

Canada: Adjusted EBITDA was $172 million, up 15% from $150 million in Q2 2023. This was primarily driven by stronger unit fuel margins and the benefits of Parkland's supply advantage, partially offset by the impact of softening industry demand in its retail business. Company same-store volume growth was 1%.

International: Adjusted EBITDA was $182 million, up 8% from $168 million during the same quarter a year ago. This was primarily driven by improved unit fuel margins in the wholesale business, partially offset by lower volumes, and continued strength in the base retail business and the addition of new sites.

Refining: Adjusted EBITDA was $121 million vs. $109 million in the year-ago period.

Calgary-based Parkland Corp. is an independent supplier and marketer of fuel and petroleum products and a convenience store operator. Parkland currently services customers across Canada, the United States, the Caribbean region and the Americas through three channels: retail, commercial and wholesale.