Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $76.9 million, down from $80.1 million in Q2 2024, primarily due to lower retail merchandise contribution [18] - Net income for the quarter increased to $20.1 million from $14.1 million year-over-year, driven by a non-cash gain related to the expiration of a purchase option [22] - Same store merchandise sales excluding cigarettes decreased by 3% year-over-year, while total same store merchandise sales were down 4.2% [19] Business Line Data and Key Metrics Changes - Retail segment operating income was approximately $80.4 million, down from $87.9 million in the prior year [18] - Wholesale segment operating income increased to $23.2 million from $21.3 million year-over-year, with gallons up 3.9% driven by the channel optimization program [20] - Fleet segment operating income was $13.1 million, slightly down from $13.7 million in the previous year, with total gallons down 6.8% [21] Market Data and Key Metrics Changes - National retail fuel volumes were down approximately 4% in Q2, reflecting a broader industry trend [16] - Same store fuel contribution decreased by approximately $800,000, with a 6.5% decline in gallons, offset by an increase in fuel margin to $0.45 per gallon [19] Company Strategy and Development Direction - The company is focused on a core transformation strategy, including advancing the dealerization program and investing in new store formats [7][9] - The dealerization program aims to convert select company-operated stores to dealer locations, with over 300 stores converted to date and an expected annualized operating income benefit of more than $20 million [8] - The introduction of new store formats aims to enhance customer experience and foodservice offerings, with the first new format store opened in June 2025 [10] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges from geopolitical events, inflation, and mixed consumer sentiment, but expressed optimism about improving trends in July [5][6] - The company expects total adjusted EBITDA for Q3 2025 to be in the range of $70 million to $80 million, with cautious expectations for same store sales performance [24][25] - Management emphasized the importance of customer engagement and loyalty programs in driving sales and improving margins [12][13] Other Important Information - The company repurchased 2.2 million shares in Q2 2025 as part of its disciplined capital allocation strategy [17] - Total capital expenditures for the quarter were $45.3 million, including the purchase of 22 fee properties [23] Q&A Session Summary Question: What is driving the notable change in July's performance? - Management noted improvements in July driven by strong promotions and customer engagement initiatives, particularly the Fueling America campaign [30] Question: Are more stores being identified for dealerization compared to six months ago? - Management confirmed that the pace of dealerization is consistent with expectations, with ongoing identification of additional stores [35][36] Question: What is the expected impact of the new store format on labor and complexity? - The new store format does not significantly increase square footage but adds food service capabilities, requiring minimal additional labor [78] Question: How are wages trending this summer compared to last summer? - Wages have trended up approximately 3%, consistent with inflationary pressures, but operating expenses have decreased due to reduced hours [47] Question: What constitutes success for the store conversions? - Success is measured by increased traffic and higher inside margins, particularly from food service offerings [87]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $30.9 million, down from $33.2 million in the same period last year, primarily due to lower retail fuel and merchandise contributions [21] - The net loss for the quarter was $12.7 million compared to a net loss of $0.6 million in the year-ago period [24] - Total capital expenditures for the quarter were $27.4 million [25] Business Line Data and Key Metrics Changes - Retail segment operating income was approximately $40.2 million, down from $46.5 million in the year-ago period [21] - Same store merchandise sales excluding cigarettes were down 5.2%, while total same store merchandise sales were down 6.9% [22] - Wholesale segment operating income was $18.6 million, compared to $18.3 million in the year-ago period [23] - Fleet segment operating income increased to $11 million from $9.8 million in the year-ago period [24] Market Data and Key Metrics Changes - Same store fuel contribution decreased by approximately $3.2 million due to a 6.2% decline in gallons sold [22] - Fuel margin for the wholesale segment was $0.88 per gallon, down from $0.92 per gallon in the year-ago period [23] - Total gallons from channel optimization were approximately 14 million for the quarter, offsetting declines from comparable sites [23] Company Strategy and Development Direction - The company is focused on a transformation strategy that includes dealerization, expansion of high-margin categories, and targeted promotional initiatives [9][10] - The Fueling America Future campaign aims to provide discounts on fuel and enhance customer engagement [10][12] - The company is committed to organic growth and store-level reinvestment, with plans for remodels and new store openings [15][17] Management's Comments on Operating Environment and Future Outlook - Management noted headwinds from lower traffic, consumer spending, and severe weather impacting store visits [6][8] - There is optimism for Q2 2025, with slight improvements in sales observed in April [34] - The company remains focused on execution and is optimistic about the path forward despite a dynamic environment [28] Other Important Information - The company repurchased approximately 1.3 million shares at an average price of $4.1 per share during the quarter [19] - The company ended the quarter with $880 million in long-term debt and maintained liquidity of approximately $847 million [25] Q&A Session Summary Question: How has the business performed recently after winter weather? - Management noted that sales were down 6.9% for the quarter, with February being particularly impacted by severe weather, but there has been slight improvement in April [32][34] Question: Are savings from the dealerization starting to flow through the P&L? - The $20 million savings is expected at scale, with $2.4 million delivered this quarter from channel optimization [36][38] Question: When will the remodel initiative be accelerated? - The first pilot stores are expected to be completed by Q3 2025, with potential acceleration in 2026 based on results [40][42] Question: What is driving the fuel margins? - Fuel margins are influenced by market volatility and the need for businesses to adjust prices to remain competitive [48][50] Question: How is the company balancing share buybacks versus bond buybacks? - Management is analyzing capital allocation strategies but did not provide specific details on the cadence of buybacks [82] Question: What characteristics define strategic retail stores for capital allocation? - Strategic stores are identified based on favorable demographics, competitive landscape, and physical plant conditions [72][73] Question: How has the dealerization program performed against expectations? - The stores pushed to the wholesale channel are performing in line with expectations, with significant incremental gallons being realized [74][76]