Star Group, L.P. Announces Fiscal 2025 Full Year And Fourth Quarter Earnings Results

Star Group, L.P. (SGU) today announced its financial results for the most recent quarter, revealing a revenue of $247.7 million. While the company met earnings expectations, it fell short of revenue estimates by approximately $53 million. This performance highlights the challenges faced by Star Group in achieving its projected growth amidst a competitive market landscape.

Key Highlights:

• Star Group, L.P. reported a 1.0% increase in total revenue for fiscal 2025, reaching $1.8 billion.
• Home heating oil and propane sales volume increased by 11.5% to 282.6 million gallons, driven by colder temperatures and acquisitions.
• Net income rose by $38.3 million to $73.5 million, influenced by favorable changes in derivative instruments and higher Adjusted EBITDA.
• Adjusted EBITDA increased by 22.2% to $136.4 million, attributed to improved margins and higher sales volumes.
• The company plans to continue diversifying through acquisitions and enhancing service profitability.

In the fiscal year ending September 30, 2025, Star Group, L.P. experienced a modest revenue growth of 1.0%, totaling $1.8 billion. This increase was primarily due to higher sales volumes and service installations, despite a decline in selling prices. The company sold 282.6 million gallons of home heating oil and propane, marking an 11.5% increase from the previous year, aided by colder weather and strategic acquisitions. The net income for the year rose significantly to $73.5 million, largely due to a favorable change in the fair value of derivative instruments and an increase in Adjusted EBITDA, which grew by 22.2% to $136.4 million.

Jeff Woosnam, President and CEO of Star Group, highlighted the company’s achievements and future outlook, stating, “We completed a sizable acquisition earlier this year, have kept overhead expenses largely in check, and maintained disciplined margin management.” He emphasized the company’s commitment to growth and diversification, aiming to maximize profitability in installations and services while managing customer attrition. Looking ahead, Star Group is focused on leveraging opportunities to enhance its performance in fiscal 2026.

Star Group, L.P. (SGU) has experienced a mixed bag of price changes recently, with a slight decline of 0.82% over the past week, yet managing to gain 8.58% over the last year. This upward trend over a longer timeframe is encouraging, especially in light of the company’s challenging financial metrics. The price-to-earnings ratio stands at 16.14, suggesting that investors are willing to pay a premium for the stock despite the negative net profit margin of -0.43%. Additionally, the revenue and free cash flow have both seen declines over the past two years, with annualized growth rates of -5.32% and -27.23%, respectively. However, the return on invested capital at 10.92% indicates that the company is still generating a reasonable return on its investments. As SGU navigates these financial hurdles, investors will be keen to see if the recent price appreciation can be sustained amidst the backdrop of declining revenues and cash flows. Overall, while the stock shows some resilience, the underlying fundamentals suggest a cautious approach may be warranted.

Star Group, L.P. sells home heating and air conditioning products and services to residential and commercial home heating oil and propane customers in the United States. It also sells diesel fuel, gasoline, and home heating oil on a delivery only basis, as well as provide plumbing services; and installs maintains, and repairs heating and air conditioning equipment. As of September 30, 2021, the company served approximately 422,200 full service residential and commercial home heating oil and propane customers and 71,100 customers on a delivery only basis. It also sells gasoline and diesel fuel to approximately 26,700 customers. Kestrel Heat, LLC operates as the general partner of the company. The company was formerly known as Star Gas Partners, L.P. and changed its name to Star Group, L.P. in October 2017. Star Group, L.P. was incorporated in 1995 and is based in Stamford, Connecticut.