Skip to content
    YSWY
    Earnings call· Jun 2026(Q2 FY26)

    Yesway Q2 FY26 earnings call YSWY

    Aug 13, 2026 Source

    Executive summary

    Yesway Q2 FY26 — Record Performance Driven by Strong Fuel Margins and Inside Merchandise Growth

    Yesway delivered a record second quarter, driven by robust performance across both fuel and inside merchandising, leading to a significant increase in adjusted EBITDA. The company continues to execute its growth strategy through new store development and selective M&A, while maintaining a strong balance sheet and focusing on high-return investments. Management remains confident in its differentiated model and long-term growth opportunities despite potential moderation in fuel margins.

    Highlights

    5

    • Adjusted EBITDA increased 35% year-over-year to $71 million.

    • Total fuel margin per gallon increased 27.4% year-over-year to $0.526 per gallon.

    • Same-store inside merchandise sales increased 1.2%, marking positive growth in 18 of the past 19 quarters.

    • Same-store fuel gallons increased 1.4% year-over-year, outperforming core markets.

    • Store contribution increased 29.5% year-over-year to $88 million.

    Concerns

    3

    • Modestly lower traffic in Q2, though inside merchandise sales are trending up in July.

    • Fuel margins are expected to moderate to the low $0.40 per gallon range for H2 FY26, down from $0.526 in Q2.

    • Elevated fuel prices may add some pressure to inside merchandise sales in the near term.

    Guidance & targets

    7
    CategoryTargetConfidence
    Adjusted EBITDA
    $235 million to $245 million
    high materiality
    High
    Fuel margins
    low $0.40 per gallon range
    high materiality
    Medium
    Same-store inside merchandise sales growth
    1.25% to 3.25%
    medium materiality
    High
    Capital expenditures
    $85 million to $95 million
    medium materiality
    High
    New store openings
    6 to 8 new stores
    medium materiality
    High
    Iowa and Kansas portfolio sale completion
    completed by year-end
    medium materiality
    High
    New store target
    130-store target
    high materiality
    High

    Operational metrics

    26
    Inside merchandise sales
    $240 million4.4% year-over-year growth
    Q2 FY26

    Driven by continued store growth.

    Inside merchandise margin
    35.7%expanded by approximately 50 basis points
    Q2 FY26

    Result of continued store growth and pricing actions taken during 2025.

    Fuel sales
    $673 million52.7% year-over-year growth
    Q2 FY26
    Fuel margin per gallon
    $0.526compared to $0.413 per gallon in Q2 last year
    Q2 FY26

    Driven by elevated fuel price volatility, increasing margin spreads between diesel and gas, and continued mix shift towards diesel.

    Diesel mix of total fuel volume
    38%compared to NACS average of 27%
    Q2 FY26

    Reflects rural and suburban footprint, presence along commercial routes, and intentional focus to increase diesel gallons.

    Store contribution
    $88 million29.5% year-over-year increase
    Q2 FY26

    Primarily driven by increases in fuel margin and inside merchandise margin from same-store sales and new stores.

    Net income
    $30 millioncompared to $24 million in the prior period
    Q2 FY26
    Adjusted EBITDA
    $71 million35% year-over-year increase
    Q2 FY26

    Reflecting similar drivers as store contribution.

    Total store count
    450
    Q2 FY26 end

    Includes 29 stores in Iowa and Kansas portfolio agreed to be sold.

    New stores opened
    1
    Q2 FY26

    Bringing total to 450 stores.

    Cash and cash equivalents
    $82 million
    Q2 FY26 end
    Total debt
    $618 million
    Q2 FY26 end

    Including financing obligations and financing lease obligations.

    Net cash provided by operating activities
    $57 millioncompared to $36 million in the prior year period
    Q2 FY26
    Capital expenditures
    $24 millioncompared to $22 million in the prior year period
    Q2 FY26
    Debt repaid
    $40 million
    YTD June 30, 2026
    Available revolver capacity
    $140 million
    Current

    After debt repayment.

    Total liquidity
    $0.25 billion
    Current

    Comprising available revolver capacity and cash on hand.

    Same-store operating expenses
    4.8%year-over-year increase
    Q2 FY26
    Same-store labor hours
    2.4%declined
    Q2 FY26

    Fifth consecutive quarter of reductions.

    Allsup's Burritos sold
    24 million
    Annual

    A little over 24 million a year.

    New stores built
    92
    Since 2020

    Through new-to-industry store developments and raze and rebuild programs.

    Pump changeouts
    45
    Last 12 months
    Fuel expansions
    6
    Recent

    Focused on diesel customer.

    New-to-industry stores entering comp set
    5
    Q2 FY26
    Employees per store
    2.6
    Current

    Labor model for selling burritos.

    Fuel margin per gallon
    mid-$0.40 range
    July FY26

    Remained elevated.

    Industry KPIs

    10
    MetricValueDetails
    Sg a rate—
    Marketplace 3p GMV—
    Gross margin drivers35.7%%
    Fuel gas station economics1.4%%
    Warehouse store club count450stores
    Comparable same store sales1.2%%
    E commerce digital sales growth—
    Advertising retail media revenue—
    Private label own brand penetration—
    Category level comps and inflation deflation—

    Deals & partnerships

    2
    not statedSale of 29 stores in Iowa and Kansas

    Part of strategy to sharpen operational focus, simplify supply chain, and reinforce concentration in core operating markets.

    not statedAcquired more than 400 convenience stores through 27 transactions since founding

    Established strong foundation of experience and operating capabilities for future opportunities.

    Risks & headwinds

    5
    Volatility in global oil pricesongoing

    not stated

    Mitigation: Differentiated fuel offerings, growing diesel exposure, and strategic footprint provide resilience.

    General economic conditionsongoing

    not stated

    Mitigation: Business model proven resilient through challenging macroeconomic periods.

    Changes in consumer demand and fuel consumption trendsongoing

    not stated

    Mitigation: Focus on destination foodservice and loyalty programs to drive traffic and sales.

    Moderation of elevated fuel marginsSecond Half 2026

    Expected to moderate to low $0.40 per gallon range for H2 FY26, down from $0.526 in Q2 FY26.

    Mitigation: Favorable diesel mix, strategic footprint, and supplier relationships position to sustain attractive profitability; incremental cash generation from higher fuel margin supports growth investments.

    Elevated fuel prices adding pressure to inside merchandise salesnear term

    Modestly lower traffic in Q2 FY26.

    Mitigation: Focus on value proposition, customer loyalty, and strategic pricing; July trends show improvement.

    What to watch in Q3 FY26

    5

    Adjusted EBITDA

    Next quarter (Q3 FY26)
    Current$71 million in Q2 FY26
    TargetWithin $235M-$245M full-year guidance, implying H2 performance

    Why it matters

    Verifies the company's ability to meet its raised full-year guidance, especially given the expected moderation in fuel margins.

    We've increased our full year 2026 adjusted EBITDA guidance to $235 million to $245 million, up from our prior outlook of $210 million to $220 million, reflecting our strong second quarter performance.

    Q&A highlights

    7

    How does Yesway prioritize M&A versus new store development (NTI), considering valuation, and what are the organizational gating factors for growth?

    Yesway is now actively pursuing both M&A and NTI, targeting specific unlevered IRRs (15% for NTI, 30%+ for build-to-suits). The company is concentrating new builds in 4 core states (AZ, OK, NM, TX) and is confident in exceeding its 130-store target, which currently only includes new builds. Excess cash generation allows for increased activity in both areas.

    “The biggest change is we're now looking to do both. So we're much more active right now in terms of M&A opportunities.”

    asked by John Heinbockel · answered by Thomas Trkla

    2 min read8 chapters

    Detailed Narrative

    01

    Record Quarterly Performance

    Yesway achieved its strongest quarter in company history, setting new records across key operating and financial measures including fuel gallons, fuel gross profit, inside merchandise sales, inside merchandise gross profit, and store contribution. This broad-based execution drove a 35% year-over-year increase in adjusted EBITDA to $71 million, reflecting the resilience of their business model and disciplined team execution.

    02

    Differentiated Business Model

    The company highlights its unique convenience retail platform built on trusted regional brands (Yesway and Allsup's), destination foodservice (iconic Allsup's Beef and Bean Burritos), disciplined real estate development, and differentiated fuel offerings, particularly growing diesel exposure. This integrated model drives repeat visits and attractive store-level economics, providing a competitive advantage in rural and suburban markets.

    03

    Strategic Real Estate Advantage

    Yesway's portfolio features strategically located stores on oversized parcels, allowing for expansion of forecourts, addition of high-flow diesel lanes, and larger format stores. This real estate advantage supports their fuel strategy by broadening the addressable market to include professional drivers and provides resilience during volatile fuel price environments due to diesel's lower price sensitivity.

    04

    Fuel Strategy and Diesel Mix

    The company's focus on diesel has resulted in diesel representing approximately 38% of total fuel volume, significantly higher than the NACS average of 27%. This mix shift, combined with elevated fuel price volatility, contributed to a 27.4% year-over-year increase in total fuel margin per gallon to $0.526, while also growing volume.

    05

    Organic Growth Initiatives

    Beyond new store development, Yesway is focused on increasing productivity of existing stores through expanding fuel capabilities (upgrading dispensers, adding diesel capacity) and strengthening merchandise/foodservice offerings. They are rationalizing lower-velocity foodservice SKUs and expanding higher-margin private label offerings to enhance value and meet customer needs.

    06

    M&A and Capital Allocation

    Yesway continues to pursue selective, value-accretive M&A, leveraging its experience from 27 prior transactions. Strong cash generation supports financial flexibility, allowing investment in organic growth, maintaining a strong balance sheet (including $40 million debt repayment), and opportunistic M&A. The company is actively looking at M&A opportunities in its core states.

    07

    Menu Optimization and Pricing Strategy

    The company is engaged in an ongoing process of optimizing its foodservice menu by limiting lower-selling items and concentrating on high-demand products like the Allsup's Burrito. Strategic pricing actions taken in 2025 and early 2026 have been well-received by customers, with management carefully avoiding price increases on core items like the burrito to maintain its competitive differentiation.

    08

    Iowa and Kansas Divestiture

    Yesway is on track to close the sale of 29 stores in its Iowa and Kansas portfolio by year-end 2026. This divestiture is part of a strategy to sharpen operational focus, simplify the supply chain, and reinforce concentration in core operating markets, particularly Arizona, Oklahoma, New Mexico, and Texas.

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