Star Group (SGU) Q3 2026 earnings summary

Executive summary

• Net income for the nine months ended June 30, 2026, increased by $13.9 million year-over-year to $116.1 million, driven by higher Adjusted EBITDA and favorable derivative impacts.

• Third quarter results reflected seasonal factors and net customer attrition, with volumes impacted by muted demand despite colder temperatures compared to last year.

• Total revenue for the third quarter rose 17.2% year-over-year to $358.1 million, driven by higher average selling prices due to increased wholesale product costs.

• Net loss for the quarter increased by $11.4 million to $28.0 million, mainly due to an unfavorable $8.6 million change in derivative fair value and a $7.1 million rise in Adjusted EBITDA loss.

• Service and installation business showed ongoing improvement, with gross profit rising by $1.4 million year-over-year to $15.6 million.

Financial highlights

• Home heating oil and propane volume for Q3 decreased by 3.4 million gallons (9.4%) to 32.8 million gallons year-over-year.

• Product gross profit for Q3 was stable at $72 million, as higher per gallon margins offset lower volumes.

• Net loss for Q3 was $28.0 million, $11.4 million higher than prior year, driven by increased adjusted EBITDA loss and unfavorable derivative changes.

• Adjusted EBITDA loss for Q3 increased by $7.1 million to $17.7 million, mainly due to higher operating expenses and lower volumes.

• For the nine months, home heating oil and propane volume rose by 8.6 million gallons (3.3%) to 271.2 million gallons, with product gross profit up $48.1 million (10%) to $528.6 million.

• Net income for the nine months was $116.1 million, $13.9 million higher year-over-year, with adjusted EBITDA up $19.9 million to $189.3 million.

Outlook and guidance

• Company remains well positioned for strong financial performance in fiscal 2026, with ongoing operational improvements and revenue growth expected from service and installation.

• Maintenance capital expenditures for the remainder of fiscal 2026 are estimated at $5.5–$6.5 million.

• Quarterly distribution of $0.1975 per unit declared in July 2026, with plans to maintain current distribution levels.

• Company expects continued volatility in product costs and customer collections due to geopolitical events and market conditions.

• No current concerns about product availability for the upcoming heating season, though higher prices may affect customer behavior.