Star Group, L.P. Common Units’s SGU shares have declined 1.5% since the company reported earnings for the first quarter of fiscal 2025. This compares with the S&P 500 index’s 0.6% decline over the same time frame. Over the past month, the stock has gained 10.7% compared with the S&P 500’s 3.3% growth.
Revenue & EPS Performances
Star Group reported first-quarter fiscal 2025 earnings per share of 79 cents, skyrocketing 147% from 32 cents in the year-ago quarter.
For the fiscal first quarter ended Dec. 31, 2024, SGU reported a 7.6% decrease in total revenues to $488.1 million compared with $528.1 million in the year-ago quarter. This decline was primarily led by lower average petroleum prices despite a slight increase in product volumes, and service and installation revenues.
Star Group, L.P. Price, Consensus and EPS Surprise
Star Group, L.P. price-consensus-eps-surprise-chart | Star Group, L.P. Quote
Other Key Business Metrics
Home heating oil and propane volumes sold increased 2.8% year over year to 82.4 million gallons for the first quarter of fiscal 2025, benefiting from acquisitions and colder weather conditions, which were 4.1% colder than the prior year but still 10.5% warmer than normal. Gross profit from service and installation operations improved to $6.9 million from $4.4 million, reflecting acquisition contributions and enhanced operational performance in the base business.
Adjusted EBITDA for the first quarter of fiscal 2025 grew 5.8% year over year to $51.9 million, as improved margins and contributions from recent acquisitions offset volume declines in the base business.
Expenses
Total costs and expenses for the first quarter of fiscal 2025 declined in line with reduced revenues, reflecting the impacts of lower petroleum prices. The cost of products sold decreased to $248.7 million from $303.3 million in the prior-year period, mirroring an 18.4% decline in wholesale petroleum prices.
Delivery and branch expenses rose 5.3% year over year to $99.3 million in the first quarter of fiscal 2025 due to acquisition-related activities. General and administrative expenses increased slightly to $7.2 million, while depreciation and amortization expenses decreased to $7.9 million from $8.4 million in the prior year.
The company recorded a $5-million non-cash credit linked to derivative instruments, a reversal from the $19-million non-cash charge recorded in the prior-year period.
Cash & Debt Position
As of Dec. 31, 2024, Star Group reported $48.8 million in cash and cash equivalents, down from $117.3 million at the end of fiscal 2024. This decrease was primarily due to cash outflows related to acquisitions and increased working capital requirements.
The company’s total debt stood at $211.5 million, with $182.7 million in long-term debt and $7.8 million in revolving credit facility borrowings. Despite the higher debt levels than the previous quarter, management emphasized its focus on maintaining financial flexibility and generating sufficient cash flow to support operations and growth initiatives.
Management Commentary
President and CEO Jeff Woosnam highlighted the quarter’s achievements, including stronger contributions from service and installation operations, and the successful execution of strategic acquisitions. Woosnam expressed optimism for the remainder of fiscal 2025, citing colder temperatures in January and an ongoing focus on operational efficiency and customer service as key factors supporting the company’s outlook.
CFO Rich Ambury pointed to improved per-gallon margins and EBITDA contributions from acquisitions as core drivers of the company’s financial performance. However, customer attrition and fluctuations in heating season demand are challenging.
Factors Influencing Results
Colder weather, increased per-gallon margins and recent acquisitions shaped the company's performance. Lower wholesale petroleum prices contributed to reduced selling prices, which affected overall revenues but supported customer affordability. Management credited internal initiatives for improved productivity and a focus on cross-selling products and services, which bolstered results despite external challenges.
Guidance & Strategic Focus
SGU expects continued momentum, supported by colder-than-expected temperatures early in the fiscal second quarter and operational enhancements. While management has not provided formal guidance, strategic priorities include acquisitions to offset customer attrition, maintaining service quality and controlling costs.
Other Developments
After the first quarter of fiscal 2025 ended, Star Group completed a sizable acquisition that enhanced its propane distribution capabilities within its existing geographic footprint. This acquisition is expected to drive growth and complement the company’s existing operations. Management expressed enthusiasm about integrating the acquired business and leveraging synergies.
In conclusion, SGU’s first-quarter results showcased a strong bottom-line improvement despite revenue headwinds from lower petroleum prices. Strategic acquisitions and enhanced service operations continue to support its growth narrative, whereas colder temperatures and improved margins provide a favorable outlook for the remainder of fiscal 2025.
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