GLP Q2 Earnings Call Flags Hedging Costs Amid Strong Fuel Margins

GLP Warns of Higher Inventory Carrying Costs

President and CEO Eric Slifka said refined-product markets remain volatile, with geopolitical developments contributing to elevated price swings, higher inventory risk and tight inventory levels.

Chief financial officer Gregory Hanson said the current steep backwardation in the forward product pricing curve is expected to increase the cost of carrying hedged inventory in future periods.

Hanson said Global Partners remains focused on disciplined inventory management, growth across its segments and efficient operations as market conditions shift.

Global Partners Gets Lift From Fuel Margins

GLP reported second-quarter 2026 adjusted earnings of $1.86 per share, which came above the Zacks Consensus Estimate of $1.24. Revenues of $6.79 billion missed the Zacks Consensus Estimate of $7.50 billion by 9.50%.

Hanson said GDSO product margin rose $37.3 million to $245.2 million. Gasoline distribution product margin increased $37.1 million to $175 million as fuel margin reached $0.50 per gallon from $0.36 a year earlier.

Wholesale product margin increased $14.8 million to $106.5 million, while Commercial product margin rose $4.4 million to $10.5 million. Hanson tied those gains primarily to gasoline and bunkering market conditions.

GLP Holds 2026 Capital Spending Ranges

Hanson maintained full-year 2026 maintenance capital spending expectations of $60 million to $70 million and expansion spending, excluding acquisitions, of $75 million to $85 million.

Second-quarter capital spending totaled $35 million, including $15.9 million of maintenance spending and $19.1 million of expansion spending, primarily for the gasoline station business.

Hanson said the timing of project completions, equipment and labor availability, weather, and unforeseen events or opportunities remain factors in the company’s capital spending estimates.

Global Partners Sees Limited Consumer Pressure

A BofA Securities analyst asked whether higher prices were changing customer behavior. Chief Operating Officer Mark Romaine said inflation and higher prices were having some impact, but not materially.

Romaine said average fuel fill-ups were down somewhat and customers could be trading from 93 octane to 87 octane. He added that store sales remained good, while transactions were only slightly lower.

Asked about July, Romaine said customer behavior had not changed materially as the third quarter began compared with what Global Partners had seen for most of the year.

GLP Simplifies Capital Structure, Keeps M&A Open

Hanson said redeeming the Series B preferred units on July 30 was accretive, noting their 9.5% fixed rate, year-to-date excess cash flow and available capacity under bank facilities.

He said the redemption simplified the capital structure, but did not rule out returning to preferred equity or equity markets to help fund certain acquisitions in the future.

On M&A, a BofA Securities analyst asked about the opportunity set. Slifka said activity was busy and Global Partners would focus on assets that fit and complement its existing base.

Global Partners Keeps a Disciplined Posture

Slifka said the company remains focused on executing its strategy, investing thoughtfully and directing capital toward the highest-return opportunities.

His closing message emphasized asset quality, the balance sheet and long-term value creation, while the call also kept attention on inventory discipline as refined-product markets remain volatile.

GLP’s Zacks Signals Show a Mixed Style Profile

GLP carries a Zacks Rank #3 (Hold), alongside a Value Score of A, Growth Score of C, Momentum Score of F and VGM Score of B. Within the Zacks framework, the Zacks Rank #3 does not carry the same top-ranked signal as a #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Value Score of A and VGM Score of B are favorable within the Style Score hierarchy, while the Growth Score of C and Momentum Score of F temper that profile. The Zacks Rank can change as analysts revise earnings estimates following the just-reported results.

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