Global Partners (NYSE:GLP) reported higher third-quarter earnings as stronger wholesale margins more than offset lower retail fuel volumes, which executives attributed to higher pump prices.
Net income rose to $52.4 million from $29 million a year earlier, while adjusted EBITDA increased to $122.9 million from $98.8 million. Distributable cash flow climbed to $70.1 million from $53 million, and distribution coverage stood at 2.3 times at quarter end, Chief Financial Officer Gregory Hanson said.
President and CEO Eric Slifka said execution across the company’s terminal network and wholesale business helped counter weaker retail fuel demand, while station operations held steady. “We do not rely on any single segment or market dynamic to drive performance,” he said.
Wholesale gains offset retail fuel weakness
Wholesale segment product margin rose by $33.4 million to $111.4 million, primarily because of more favorable market conditions for gasoline and distillates. Gasoline and gasoline blendstocks product margin increased by $14.3 million to $75.8 million, while distillates and other oils increased by $19.1 million to $35.6 million.
In the gasoline distribution and station operations, or GDSO, segment, product margin fell by $8.3 million to $210.6 million. Gasoline distribution margin declined by $8 million to $136.8 million, primarily because of lower volumes sold. Station operations margin slipped by $300,000 to $73.8 million.
Hanson said higher retail fuel prices affected consumption, but convenience-store performance remained relatively steady. Transactions declined, he said, while the average transaction basket increased slightly.
At the end of the quarter, the GDSO portfolio included 1,489 fueling stations and convenience stores, excluding 69 sites in the Spring Partners retail joint venture. Commercial segment product margin increased by $100,000 to $7.1 million, helped in part by more favorable bunkering conditions.
Hanson cautioned that the company continues to expect steep backwardation in the forward product pricing curve to increase the cost of carrying hedged inventory in future periods. He said Global remained focused on disciplined inventory management, growth across its segments and efficient operations.
Distribution and capital spending
Global’s board approved its 20th consecutive quarterly distribution increase, raising the payment to $0.7850 per common unit, or $3.14 annualized. The distribution is payable Nov. 13 to unitholders of record on Nov. 9.
Third-quarter capital spending was $41.9 million, including $19.3 million for maintenance and $22.6 million for expansion, primarily investments in the gasoline station business. For 2026, Global raised its expected maintenance spending range by $5 million to $65 million-$75 million. Its expansion spending forecast, excluding acquisitions, remained at $75 million-$85 million.
Hanson said operating expenses fell by $1.4 million to $131.1 million, while selling, general and administrative expenses rose by $3.1 million to $79.4 million. Interest expense declined by $1.9 million to $31.4 million, partly because of lower average balances on the working capital revolving credit facility.
Balance sheet and acquisition outlook
Leverage under Global’s credit agreement was approximately 2.8 times funded debt to EBITDA as of Sept. 30. The company had $99 million outstanding on its working capital revolver and $144.5 million on its revolving credit facility.
During the quarter, Global redeemed all outstanding 9.5% Series B fixed-rate preferred units, removing $75 million of preferred equity from its capital structure. After quarter end, the company amended its credit agreement, extending its maturity by more than three years to October 2031 while maintaining its $1 billion working capital revolver and $500 million revolving credit facility.
Asked whether higher prices could create opportunities to acquire smaller retailers under financial strain, Slifka said mergers and acquisitions activity remained busy but that he was not sure the opportunities were being driven by credit issues or pricing. Retail remains fragmented and competitive, he said, adding that Global wants deals that are accretive and offer good returns. Terminal opportunities are fewer but larger, he said.
Slifka also said the company had committed more than $200,000 to community action agencies and nonprofits supporting home heating oil efforts in New England this winter.
About Global Partners (NYSE:GLP)
Global Partners LP (NYSE: GLP) is an integrated energy company that owns, supplies, stores, transports and markets energy products. The company’s activities include the wholesale distribution of gasoline, diesel, distillates, residual oil, renewable fuels and other petroleum products, as well as the terminaling and storage of these products.
Global Partners serves customers primarily across the northeastern and mid-Atlantic United States. Its wholesale operations supply gasoline stations, commercial and industrial users, utilities, distributors and other energy customers.
