Star Group (SGU) Q1 2026 earnings summary

Executive summary

• Fiscal Q1 2026 began strongly, with total revenue up 10.5% to $539.3 million, driven by colder-than-expected weather, recent acquisitions, and effective margin management, resulting in a 32% year-over-year increase in Adjusted EBITDA to $68.4 million, net of a $5 million weather hedge charge.

• Net income rose to $35.8 million, up from $32.9 million year-over-year, supported by higher sales volumes and improved margins.

• Operational execution and efficiency improvements contributed to bottom-line results, with only modest net customer attrition during the period.

• Colder-than-normal temperatures led to a 13.9% increase in home heating oil and propane volumes sold.

Financial highlights

• Product sales grew 12.1% to $448.0 million, and installation/service revenue rose 3.0% to $91.3 million year-over-year.

• Product gross profit increased 19% to $179.5 million, driven by higher volumes and per-gallon margins.

• Home heating oil and propane gallons sold rose 13.9% to 93.9 million gallons.

• Basic and diluted income per limited partner unit was $0.89, up from $0.79 year-over-year.

• Net cash used in operating activities was $55.2 million, an improvement from $64.6 million in the prior year.

Outlook and guidance

• Cold weather persisted into the second quarter, with January 2% colder than last year and 9% colder than normal, and February also starting colder than usual.

• Several acquisition opportunities are under review, with expectations for increased activity as the heating season progresses.

• Maintenance capital expenditures for the remainder of fiscal 2026 are estimated at $8.2–$9.2 million, with an additional $0.5–$0.7 million planned for propane operations.

• The company intends to continue unit repurchases and seek acquisition opportunities within available liquidity.

• Continued focus on customer service, cost control, and service and installation profitability is expected for the remainder of the heating season.