Q2 2026 Yesway Inc Earnings Call Transcript
Key Points
- Record Q2 performance with adjusted EBITDA up 35% year-over-year to $71 million, driven by broad-based growth in fuel and merchandise.
- Same-store fuel gallons increased 1.4% (1.8% ex-Iowa/Kansas), outperforming core market averages and indicating market share gains.
- Fuel margin per gallon surged 27.4% to $0.526, supported by elevated volatility, diesel mix shift, and strategic pricing.
- Inside merchandise sales grew 4.4% year-over-year, with same-store sales up 1.2% (1.5% ex-Iowa/Kansas), and margin expanded 50 basis points to 35.7%.
- Raised full-year 2026 adjusted EBITDA guidance to $235-$245 million, reflecting strong momentum and confidence in the back half.
- Strong cash generation and liquidity (~$250 million) provide flexibility for organic growth, debt repayment, and selective M&A.
- Diesel now represents 38% of fuel volume (vs. industry average 27%), enhancing margins and attracting higher-spending professional drivers.
- New store development and fuel expansions are driving productivity, with new builds outperforming legacy stores.
- Labor efficiency improved with same-store labor hours down 2.4% for the fifth consecutive quarter, supporting cost control.
- Strategic pricing and SKU rationalization have been well-received, with no negative impact on customer behavior or the iconic burrito offering.
- Same-store inside merchandise sales growth moderated to 1.2% (1.5% ex-Iowa/Kansas) from Q1's ~2.5%, partly due to higher fuel prices pressuring traffic.
- Higher fuel prices led to modestly lower customer traffic in Q2, though July trends improved.
- Fuel margin guidance for the back half assumes moderation to low $0.40 per gallon, which could limit upside if volatility subsides.
- The sale of 29 Iowa and Kansas stores is expected to close by year-end, but until then, these stores are a drag on same-store metrics.
- Elevated fuel price volatility, while beneficial to margins, creates uncertainty and could pressure inside sales if sustained.
- Same-store operating expenses increased 4.8% year-over-year, primarily due to higher credit card fees.
- New store openings are modest (one in Q2, six to eight expected for 2026), limiting near-term growth from new builds.
- The company faces execution risks in its Arizona expansion and other new markets, which may take time to reach profitability.
- M&A opportunities are evaluated but no deals are imminent, and leverage could increase to 4x for larger acquisitions, adding financial risk.
- The company does not provide fuel margin forecasts, making it difficult for investors to model future profitability.
Welcome to the Yes Way Inc. Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question, you will need to press *11 on your touchtone telephone. We ask that you limit yourself to one question and a follow-up. Please be advised today's conference call is being recorded. I would like to turn the call over to Nicole Harlow, Investor Relations Representative. Please go ahead.
Thank you, operator, and thank you all for joining us today for Yesway's second-quarter 2026 earnings conference call. On with me today are Tom Turkla, Chairman, President, and Chief Executive Officer, and Erika Ailes, Chief Financial Officer. Before we begin, a reminder that today's discussion will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1,995. Any forward-looking statements made. Today are based on management's current
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