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    SGU
    Earnings call· Jun 2026(Q3 FY26)

    STAR GROUP Q3 FY26 earnings call SGU

    Aug 6, 2026 Source

    Executive summary

    Star Group Q3 FY26 — Seasonal Factors and Net Customer Attrition Impact Volumes, Service & Installation Business Shows Growth

    Star Group's Q3 FY26 results were primarily influenced by seasonal factors and net customer attrition, leading to a 9.4% decrease in Q3 heating oil and propane volumes despite colder temperatures. While the service and installation business showed strong gross profit growth, overall operating costs were elevated due to higher insurance claims, resulting in a net loss for the quarter. Year-to-date performance, however, reflected colder weather and acquisitions, driving a 3.3% volume increase and a $20 million rise in adjusted EBITDA.

    Highlights

    4

    • Service and installation business gross profit increased by $1.4 million to $15.6 million in Q3 FY26.

    • Product gross profit for the nine months increased by $48 million, or 10%, to $529 million.

    • Adjusted EBITDA for the nine months rose by $20 million to $189 million.

    • Net income for the first nine months of fiscal 2026 was $116 million, $14 million higher than the prior year.

    Concerns

    5

    • Home heating oil and propane volume decreased by 3.4 million gallons, or 9.4%, in Q3 FY26.

    • Operating costs were elevated in Q3 FY26 due to $6.2 million higher insurance claims.

    • The company posted a net loss of $28 million in Q3 FY26, $11.4 million more than the prior year.

    • Adjusted EBITDA loss increased by $7 million to $17.7 million in Q3 FY26.

    • Service gross loss increased by $5.7 million for the nine months due to increased demand and propane tank sets.

    Guidance & targets

    1
    CategoryTargetConfidence
    Financial Performance
    Strong financial performance
    medium materiality
    High

    Operational metrics

    16
    Home heating oil and propane volume
    33decreased by 3.4 million gallons, or 9.4% YoY
    Q3 FY26
    Degree days
    16colder than last year
    Q3 FY26
    Product gross profit
    $72virtually unchanged YoY
    Q3 FY26
    Service and installation gross profit
    $15.6$1.4 million higher YoY
    Q3 FY26
    Delivery, branch, and G&A expenses
    $8.7increased YoY
    Q3 FY26
    Net loss
    $28$11.4 million more than prior year
    Q3 FY26
    Adjusted EBITDA loss
    $17.7increased by $7 million YoY
    Q3 FY26
    Home heating oil and propane volume
    271increased by 8.6 million gallons or 3.3% YoY
    9 months FY26
    Temperatures (degree days)
    11.5colder than prior year
    9 months FY26
    Product gross profit
    $529increased by $48 million, or 10% YoY
    9 months FY26
    Installation gross profit
    $2.5increased YoY
    9 months FY26
    Service gross loss
    $5.7increased YoY
    9 months FY26
    Delivery, branch, and G&A expenses
    $25rose YoY
    9 months FY26
    Weather hedging program expense
    $5vs. expense in FY25
    FY26
    Net income
    $116$14 million higher YoY
    9 months FY26
    Adjusted EBITDA
    $189rose by $20 million YoY
    9 months FY26

    Industry KPIs

    1
    MetricValueDetails
    Retail sales growthdecreased by 9.4% (Q3 FY26); increased by 3.3% (9 months FY26)%

    Deals & partnerships

    1
    Not namedSmall heating oil dealer

    The company recently closed a small heating oil dealer acquisition after the end of the fiscal third quarter.

    Risks & headwinds

    4
    Net customer attritionQ3 FY26 (ongoing)

    Contributed to 9.4% decrease in Q3 FY26 home heating oil and propane volume.

    Mitigation: Focus on selling value-added products and expanding HVAC offerings to existing clients and beyond.

    Elevated operating costs due to higher insurance claimsQ3 FY26

    $6.2 million higher in Q3 FY26, contributing to an $8.7 million increase in delivery, branch, and G&A expenses.

    Mitigation: Streamline operations where appropriate.

    Impact of higher product prices on customer behaviorUpcoming heating season (FY27)

    Prices are up, which will impact customer behavior somewhat.

    Mitigation: Customers will need to commit to price-protected plans or remain on variable pricing by October.

    Increased service gross loss9 months FY26

    Increased by $5.7 million for the nine months of FY26.

    Mitigation: Focus on improving revenue and controlling costs in service and installation business.

    What to watch in Q4 FY26

    4

    Home heating oil and propane volume

    Q4 FY26 / FY27 heating season
    CurrentQ3 FY26 volume decreased 9.4% YoY. 9 months FY26 volume increased 3.3% YoY.
    TargetStabilization or growth in volume, especially weather-normalized.

    Why it matters

    Volume is a primary driver of product gross profit and overall financial performance.

    Our home heating oil and propane volume decreased by 3.4 million gallons, or 9.4% to 33 million gallons, as the additional volume provided from acquisitions was more than offset by net customer attrition and other factors.

    Q&A highlights

    2

    What are the risks for the upcoming heating season regarding product availability, competitive dynamics, and customer behavior given current market conditions?

    Management does not foresee product availability issues, as they are securing contracts. They acknowledge higher prices will impact customer behavior, with some potentially delaying commitment to price-protected plans.

    “We don't see at this time any issues with product availability. I mean, we're in the process now of securing from our wholesalers. contracts for next year.”

    asked by Michael Prouting · answered by Unknown Speaker

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 Performance Overview

    Star Group's third fiscal quarter, a non-heating period, saw home heating oil and propane volume decrease by 9.4% to 33 million gallons, primarily due to net customer attrition, despite moderately colder temperatures year-over-year. Product gross profit remained flat at $72 million, as higher per-gallon margins and other petroleum products offset the volume decline.

    02

    Service and Installation Growth

    The service and installation business continued its positive trend, delivering a gross profit of $15.6 million in Q3, an increase of $1.4 million from the prior year. This growth is attributed to a strategy of selling more value-added products and expanding HVAC offerings, with management noting strong employee engagement.

    03

    Elevated Operating Costs

    Operating costs were significantly impacted by an $8.7 million year-on-year increase in delivery, branch, and G&A expenses, largely driven by $6.2 million in higher insurance claims due to adverse developments. This contributed to a net loss of $28 million for the quarter and a $7 million increase in adjusted EBITDA loss.

    04

    Year-to-Date Financials

    For the first nine months of fiscal 2026, home heating oil and propane volume increased by 3.3% to 271 million gallons, benefiting from colder temperatures and acquisitions. Product gross profit rose by $48 million, or 10%, to $529 million. Adjusted EBITDA for the nine-month period increased by $20 million to $189 million, leading to a net income of $116 million, up $14 million year-over-year.

    05

    Acquisition Strategy

    The company closed a small heating oil dealer acquisition post-quarter end and is actively assessing several attractive businesses. While no "transformational" acquisitions are currently in the pipeline, management maintains a full pipeline of potential smaller deals and an unchanged approach to M&A.

    06

    Preparation for Winter

    Star Group is utilizing the summer months to strengthen operations, streamline processes, and prepare for the upcoming winter season, alongside continued investment in the service and installation business for further revenue growth.

    AI-generated summary of the company’s earnings call. Not investment advice.