• Net Loss: Reported a net loss of $17.5 million in Q1 2024, compared to a net loss of $1.0 million in Q1 2023.

• Adjusted EBITDA: Decreased to $23.6 million in Q1 2024 from $31.7 million in Q1 2023.

• Distributable Cash Flow: Fell to $11.7 million in Q1 2024 from $19.1 million in the same quarter the previous year.

• Gross Profit - Wholesale Segment: Dropped to $27.0 million in Q1 2024 from $31.2 million in Q1 2023.

• Gross Profit - Retail Segment: Increased to $54.4 million in Q1 2024 from $50.8 million in Q1 2023.

• Leverage Ratio: Increased to 4.49 times as of March 31, 2024, from 4.21 times at the end of 2023.

• Distribution Coverage Ratio: Decreased to 1.37 times for the trailing twelve months ended March 31, 2024, from 1.70 times for the comparable period in 2023.

• Warning! GuruFocus has detected 9 Warning Sign with CAPL.

On May 8, 2024, CrossAmerica Partners LP (NYSE:CAPL), a prominent player in the wholesale distribution of motor fuel and real estate leasing for retail fuel distribution, disclosed its financial outcomes for the first quarter ended March 31, 2024. The detailed insights are available in their latest 8-K filing. This period highlighted a significant net loss of $17.5 million, a stark contrast to the $1.0 million loss reported in the first quarter of 2023. This downturn was primarily due to a $15.9 million loss on lease terminations with Applegreen. Despite these challenges, the company showed some resilience in its retail segment, with a gross profit increase.

Company Overview

CrossAmerica Partners LP operates through two main segments: Wholesale and Retail. The Wholesale segment, which is a significant revenue contributor, involves the distribution of motor fuel to various entities, including lessee dealers and independent dealers. The Retail segment deals with the sale of convenience merchandise and motor fuel at both company-operated and commission agent-operated retail sites.

Financial Performance Analysis

The first quarter of 2024 was challenging for CrossAmerica, marked by increased fuel prices and reduced demand impacting both fuel and merchandise sales. The Adjusted EBITDA saw a decrease to $23.6 million from $31.7 million in the previous year, and Distributable Cash Flow dropped to $11.7 million from $19.1 million. This financial strain was reflected in the increased leverage ratio, which rose from 4.21 times at the end of 2023 to 4.49 times as of March 31, 2024.

Segment Performance

The Wholesale segment experienced a 14% decrease in gross profit, primarily due to lower motor fuel margins and a decline in volume, which was partly due to the conversion of wholesale locations to retail operations. In contrast, the Retail segment reported a 7% increase in gross profit, driven by an 18% increase in merchandise gross profit compared to the first quarter of 2023. This was despite a slight decrease in motor fuel gross profit.