Executive Summary

Q2 showed a clear sequential rebound but remained below prior-year levels: Adjusted EBITDA rose to $37.1M from $24.3M in Q1 (−13% YoY vs $42.6M), while net income benefited from asset-sale gains to $25.2M .
Versus S&P Global consensus, CAPL delivered a revenue beat (ex-excise) and an EPS beat, offset by an Adjusted EBITDA miss: Revenue (ex-excise) $0.879B vs $0.794B*, EPS $0.64 vs $0.20*, Adjusted EBITDA $37.1M vs $41.7M* .
Portfolio optimization accelerated: sold 60 properties for $64.0M (net gain $29.7M), reduced credit facility borrowings >$50M QoQ to $727.0M; leverage down to 3.65x from 4.27x in Q1 .
Distribution maintained at $0.525/unit with 1.12x coverage (TTM 1.00x); management highlighted demand softness but outperformance vs industry in volume and store sales .

What Went Well and What Went Wrong

What Went Well
- Deleveraging and balance sheet progress: leverage improved to 3.65x (from 4.27x in Q1) as asset sales proceeds reduced credit facility debt by >$50M to $727.0M .
- Retail held up: merchandise gross profit +2% YoY to $30.5M; same-store merchandise ex‑cigarettes +4% YoY; retail margin per gallon essentially stable (37.0¢ vs 37.3¢) .
- CEO commentary underscored relative outperformance: “our volume and store sales outpaced industry trends” and “meaningful improvement over the first quarter,” while asset sales “strengthen[ed] our balance sheet” .
What Went Wrong
- Wholesale softness: gross profit −12% YoY to $24.9M as gallons −7% and margin per gallon −2% amid segment conversions and net contract losses .
- Underlying profitability lower YoY: Adjusted EBITDA fell to $37.1M (−13% YoY) on lower fuel and rent gross profit and higher operating expenses despite gains in net income from asset sales .
- Distribution coverage tightened: current quarter 1.12x vs 1.30x in Q2’24; DCF declined to $22.4M from $26.1M YoY .

Financial Results

Consolidated results (oldest → newest)

Metric	Q2 2024	Q1 2025	Q2 2025
Operating revenues (GAAP) ($B)	$1.133	$0.862	$0.962
Revenue ex-excise ($B)	$1.051 (1.133−0.082)	$0.789 (0.862−0.073)	$0.879 (0.962−0.083)
Gross Profit ($M)	$104.8	$89.8	$101.0
Adjusted EBITDA ($M)	$42.6	$24.3	$37.1
Net Income ($M)	$12.4	$(7.1)	$25.2
Diluted EPS ($)	$0.31	$(0.20)	$0.64
Distributable Cash Flow ($M)	$26.1	$9.1	$22.4
Distribution Coverage (x)	1.30x	0.46x	1.12x

Segment highlights (oldest → newest)

Segment Metric	Q2 2024	Q1 2025	Q2 2025
Retail gross profit ($M)	$76.6	$63.2	$76.1
Retail gallons (MM)	143.0	126.5	141.7
Retail margin/gal (¢, pre-CC fees)	37.3	33.9	37.0
Merchandise GP ($M)	$29.8	$24.9	$30.5
Merchandise GP %	28.3%	27.9%	28.2%
Retail OpEx ($M)	$48.6	$51.7	$50.8
Wholesale gross profit ($M)	$28.1	$26.7	$24.9
Wholesale gallons (MM)	192.1	162.9	179.2
Wholesale margin/gal (¢)	8.7	9.7	8.5

Key performance indicators

KPI	Q1 2025	Q2 2025
Properties sold (count)	7	60
Proceeds from asset sales ($M)	$8.6	$64.0
Net gain on dispositions ($M)	$5.6	$29.7
Credit facility balance ($M)	$778.0 (3/31)	$727.0 (6/30)
Leverage (Credit Facility-defined) (x)	4.27x	3.65x
Distribution per unit ($)	$0.525	$0.525
Coverage Ratio (TTM) (x)	1.04x	1.00x

Guidance Changes

CAPL does not provide formal numeric revenue/EBITDA guidance; the partnership reiterated its focus on portfolio optimization, deleveraging around ~4x, and maintaining the quarterly distribution.

Metric	Period	Previous Guidance	Current Guidance	Change
Distribution per unit	Q2 2025	$0.525 (Q1’25)	$0.525	Maintained
Leverage objective (Credit Facility-defined)	Ongoing	Manage ≈4x (prior commentary)	Manage ≈4x; leverage at 3.65x on 6/30	Maintained (execution improved)
Portfolio actions	2025	Continue real estate rationalization/divestitures	Divestitures continued (60 properties sold in Q2)	Continued execution

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Demand/volume trends	Outperformed industry on same-store retail and wholesale in Q4; winter weather and soft demand pressured Q1; retail same-store down ~4% (leap year adjusted ~3%)	“Overall demand remains soft,” but volume/store sales outpaced industry trends	Stable outperformance amid soft macro
Fuel margin volatility	Q4’24 retail fuel margin −9% YoY on less favorable crude dynamics; Q1’25 retail and wholesale benefited from volatility and sourcing	Wholesale margin per gallon −2% YoY; retail margin/gal roughly flat YoY	Mixed; normalizing from volatility
Class-of-trade conversions	Aggressive shift from wholesale to retail in 2024; continued in Q1 (adds to retail OpEx initially)	Continued conversions; retail site count up YoY; contributes to retail OpEx	Ongoing strategic shift
Divestitures/deleveraging	30 sites sold in 2024; focus to continue in 2025	60 properties sold in Q2; >$50M debt reduction; leverage to 3.65x	Accelerating; balance sheet stronger
Tariffs/macro	Q1: New England fuel market and broad tariff uncertainty discussed	Demand commentary cautious; no new tariff specifics in Q2 materials	Macro remains a watch item
Interest expense/hedging	Higher cash interest after 2020 swaps expired; ~50% balance swapped at ~3.4%	Lower average rate and lower average debt balance partly aided coverage QoQ	Tailwind from deleveraging

Management Commentary

“Our second quarter results showed a meaningful improvement over the first quarter, although they remained below prior-year levels… we completed several asset sales, reducing debt by more than $50 million and strengthening our balance sheet… our volume and store sales outpaced industry trends.” — Charles Nifong, President & CEO .
On wholesale dynamics: gross profit down 12% YoY driven by lower volume (−7%), lower MPG (−2%), and segment conversions; maintained supply relationships post-divestiture .
Capital and liquidity: CAPL reduced credit facility balance to $727.0M; leverage 3.65x; ~$200.7M availability (as of Aug 1) .

Q&A Highlights

No questions were taken on the Q2 call; the operator closed the session without Q&A .
No incremental guidance beyond the press release disclosures .

Estimates Context

Q2 2025 actuals vs S&P Global consensus

Metric	S&P Consensus*	Actual	Surprise
Revenue ex-excise ($B)	$0.794*	$0.879 (962−83)	Beat
Adjusted EBITDA ($M)	$41.7*	$37.1	Miss
Primary EPS ($)	$0.20*	$0.64	Beat

Notes: S&P revenue convention excludes excise tax; company reports operating revenues including excise ($82.9M in Q2). We align the comparison on an ex-excise basis for consistency .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Sequential rebound, but underlying profitability remains below YoY comps: Adjusted EBITDA up QoQ to $37.1M (−13% YoY), while net income benefited from asset-sale gains .
Retail resilience vs wholesale softness continues: retail metrics broadly steady with modest merchandise growth; wholesale pressured by lower gallons/margins and site mix shifts .
Balance sheet traction is a differentiator: 60 property sales, >$50M debt reduction, leverage down to 3.65x, providing flexibility amid a soft demand backdrop .
Distribution maintained at $0.525 with 1.12x coverage; watch for sustained DCF improvement to support coverage normalization if macro remains soft .
Estimate implications: likely upward revisions to revenue (ex-excise) and EPS, but potential downward bias to EBITDA given the miss versus consensus* .
Strategic shift to retail persists; early OpEx drag from conversions should moderate as stores ramp, supporting medium-term margin capture .
Ongoing divestitures and deleveraging are central catalysts; continuation at Q2 pace would further reduce interest burden and bolster coverage .

Appendix: Additional Quantitative Details

Consolidated Statements (Q2 2025): Operating revenues $961.9M; excise taxes $82.9M; gross profit $101.0M; operating income $41.5M; diluted EPS $0.64 .
Non-GAAP reconciliation (Q2 2025): Adjusted EBITDA $37.1M; DCF $22.4M; distribution coverage 1.12x .
Retail detail (Q2 2025): gallons 141.7M; MPG 37.0¢; merchandise GP $30.5M; GP% 28.2% .
Wholesale detail (Q2 2025): gallons 179.2M; MPG 8.5¢; gross profit $24.9M .

Footnote: Values retrieved from S&P Global.*

CrossAmerica Partners LP (CAPL)·Q2 2025 Earnings Summary