Dive Brief:
- CrossAmerica Partners’ retail division reported another strong quarter as the company continues to beef up its c-store footprint by converting dealer sites to company-owned locations, executives said during the company’s first-quarter earnings call on Thursday.
- Despite a challenging first quarter, CrossAmerica’s retail arm saw a 16% increase in gross profit during Q1 compared to the same period last year, according to the company's earnings report. Leadership credited this growth to its increased site count, which brought growth in merchandise and fuel sales.
- The Allentown, Pennsylvania-based company has quietly become one of the fastest-growing mid-size c-store retailers in the U.S. over the past year. According to its earnings report, it’s only a few handful of stores away from reaching 400 company-operated locations.
Dive Insight:
CrossAmerica has been moving full-speed ahead in building its c-store network since it acquired 59 locations from Applegreen in early 2024. Around that time, the company revealed plans to invest in its company-operated network, which it has done at some locations through adding new food options and various branding and fuel dispenser enhancements.
As of Thursday, CrossAmerica had 376 company-operated c-stores in its network — 33 more than it had at the end of Q1 2024, according to its earnings report. Eleven of those 33 locations were added last quarter, President and CEO Charles Nifong said during the call.
“Based on these numbers, you can see that we were very active during the past 12 months with site conversions and executing on our strategy to increase our exposure to retail fuel margins and the retail business in general,” Nifong said.
With the increased site count came increased merchandise profits, which surged 16% to about $25 million during the quarter, according to CrossAmerica’s earnings report. Retail fuel margins also grew from $26 million to over $31 million — “a highlight of the quarter,” Nifong said during the call.
But even as CrossAmerica builds its c-store network, it’s also stripping off some fat. The company sold seven sites for $8.6 million last quarter, building off a 2024 in which it divested 30 locations for over $36 million.
Nifong said during the call that CrossAmerica will continue to look for opportunities to divest more non-core assets.
“We expect this momentum to continue through 2025 as this continues to be an area of focus and effort for us, and we expect to outperform our results for 2024 in this area,” he said.
