Yesway, Inc. Class A Common Stock 2026 Q2 Earnings Call

Please go ahead. Thank you, operator, and thank you all for joining us today for Yesway's second quarter 2026 earnings conference call.

On with me today are Tom Trkla, chairman, president, and chief executive officer, and Ericka Ayles, chief financial officer. Before we begin, a reminder that today's discussion will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements made today are based on management's current expectations, assumptions, and beliefs about our business and the environment in which we operate. These statements involve known and unknown risks, uncertainties and other factors that could cause our actual results, performance, or achievements to differ materially from what is expressed or implied. These risks include, but are not limited to, volatility in global oil prices, general economic conditions, and our ability to execute on our growth strategy, and changes in consumer demand and fuel consumption trends.

For a detailed discussion of risks, please see our final prospectus, dated April 21st, 2026, as filed with the SEC on April 23rd, 2026, and our other filings with the SEC. Our forward-looking statements made on this call represent our outlook as of today, August 13th, 2026, and we disclaim any obligation to update these statements except as may be required by law. In addition, during this conference call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA and store contribution. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in our second quarter 2026 earnings press release, which was issued earlier this morning and is available on our investor relations section of our website. A replay of today's call will also be available on the same website shortly after we conclude the Q&A session.

With that, I'd like to turn the call over to Tom Trkla.

Tom? Thank you, Nicole, and good morning, everyone, and thanks for joining us today.

We are pleased with the strong performance we delivered in the second quarter, and I look forward to discussing our results and the progress we are making on our growth priorities on today's call. First, I want to remind everyone what makes Yesway fundamentally different and why we believe our platform is well-positioned for continued growth. Since our founding more than a decade ago, we've built a distinctive convenience retail platform around a combination of trusted regional brands, destination food service, disciplined real estate development, differentiated fuel offerings, and an award-winning loyalty program. Today, Yesway is one of the fastest growing convenience store operators in the U.S. and the nation's 15th largest convenience store chain. Our portfolio is anchored by two powerful and highly complimentary brands, Yesway and Allsup's.

Both continue to have deep roots in the communities we serve, strong customer recognition, and enduring loyalty. This local connection is difficult to replicate and provides us with an important competitive advantage, particularly in the rural and suburban markets where we operate. We are also much more than a convenience stop for fuel and everyday necessities. In many of our markets, we are a true food service destination. Allsup's iconic world-famous beef and bean burrito, together with our broader prepared food and proprietary merchandise offerings, remain a compelling reason for customers to visit our stores frequently and distinguishes us from the traditional fuel-oriented competitors. Our food service platform drives traffic throughout the day, supports attractive merchandising margins, and strengthens the relevance of our brands. Our deep real estate expertise represents another significant differentiator.

We've assembled and built a portfolio of strategically located stores across the Southwest and Midwest, often situated on oversized parcels with strong visibility, convenient access, and favorable traffic patterns. These sites provide the capacity to expand our forecourts, add dedicated high flow diesel lanes, and introduce larger format stores with enhanced food service and merchandise offerings. This real estate advantage also supports our fuel strategy. Greater diesel capacity enables us to serve both local customers and over-the-road professional drivers, broadening our addressable market and increasing fuel volumes. Diesel demand also tends to be less price sensitive during periods of elevated fuel prices, providing an additional measure of resilience in volatile market environments. Taken together, our trusted brands, destination food service platform, strategically advantaged real estate, growing diesel exposure, strong customer loyalty, and proven operating capabilities form an integrated platform that is both differentiated and difficult to replicate.

We believe these advantages will continue to drive repeat visits, attractive store-level economics, and sustainable long-term value for our shareholders. Turning now to our second quarter performance, which was the strongest quarter in our company's history, reflecting broad-based execution across both fuel and inside merchandising. We set new records across several of our most important operating and financial measures, including fuel gallons Fuel gross profit, inside merchandise sales, inside merchandise gross profit, and store contribution. This operating momentum drove adjusted EBITDA to $71 million, an increase of 35% year-over-year. The most important takeaway is that these results were not dependent on any single factor, and that the quality of the quarter was as strong as the headline results. We grew both fuel volumes and inside merchandise sales while expanding margins and generating greater profitability.

These results underscore the strength and breadth of our platform, the advantages of our differentiated market positioning, the resilience of our business model amid continued inflationary pressures and volatile fuel markets, and the disciplined execution of our team. Let me highlight several key aspects of our second quarter performance. Same-store inside merchandise sales increased 1.2%, marking positive growth in 18 of the past 19 quarters. Excluding the 29 stores in our Iowa and Kansas portfolio, which we expect to close the sale of by year-end, same-store merchandise sales increased 1.5%. Same-store fuel gallons increased 1.4% year-over-year. Again, excluding the 29 stores in our Iowa and Kansas portfolio, same-store fuel gallons sold increased 1.8%.

According to OPIS data, the change in our same-store fuel gallons sold significantly outperformed the change in volume per outlet in our core markets, which we believe is a clear data point we are gaining market share while also delivering stronger margins. Our value proposition continues to resonate, and we remain competitive in the communities we serve. Total fuel margin per gallon increased 27.4% year-over-year to $0.526 per gallon, driven by elevated fuel price volatility, increasing margin spreads between diesel and gas, and continued mix shift towards diesel. Importantly, we achieved this margin expansion while also growing volume. Robust store contribution supported adjusted EBITDA growth of 35% year-over-year to $71 million. On the strength of our second quarter performance, we are raising our adjusted EBITDA outlook for full year 2026, which Ericka will discuss later in this call.

Our growth strategy remains disciplined and focused on three priorities: developing new stores, increasing the productivity of our existing store base, and pursuing selective value-accretive acquisitions. Starting with new store development. We have now built 92 stores since 2020 through our new-to-industry store development and raise and rebuild programs. This experience, together with our real estate experience, enables us to identify the markets, sites, and formats with the greatest potential to generate attractive store-level returns. During the second quarter, we opened one new store, bringing our total store count to 450. We remain on track to deliver our outlook of six to eight stores in 2026.

As a reminder, today's reported store count includes the 29 stores in our Iowa and Kansas portfolio that we have agreed to sell as part of our strategy to sharpen operational focus, simplify our supply chain footprint, and reinforce our concentration in core operating markets. We are pleased with the progress on this transaction and remain on track to close the sale by the end of 2026. Looking ahead, our new build expansion strategy is currently concentrated on four core states: Arizona, Oklahoma, New Mexico, and Texas, with Arizona being a key near-term development priority. Arizona is a natural extension of our Southwestern footprint and offers attractive fuel market dynamics, meaningful development opportunities, and strong receptivity to our food service offering.