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SGU Posts Narrower Y/Y Q4 Loss as Acquisitions & Margins Improve
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Shares of Star Group, L.P. (SGU - Free Report) have declined 1% since reporting earnings for the fourth quarter of fiscal 2025 compared with the S&P 500 index’s 0.5% fall during the same period. Over the past month, the stock has fallen 1% against the S&P 500’s 0.7% return.
Earnings & Revenue Performance
Star Group’s fourth-quarter and fiscal 2025 results showed a mix of solid volume gains, improved profitability and the ongoing impacts of acquisitions. Fiscal fourth-quarter revenues rose 3.1% year over year to $247.7 million, driven primarily by higher installations and services revenues.
The net loss narrowed to $28.7 million from a $35.1 million loss a year earlier, aided by a favorable $12.2-million swing in the fair value of derivative instruments and a $3.8-million gain from real estate sales. Star Group reported a fourth-quarter fiscal 2025 loss of 84 cents per limited partner unit, improving from a $1 loss per unit in the prior-year quarter.
For fiscal 2025, total revenues increased roughly 1% to $1.8 billion, while net income more than doubled to $73.5 million from $35.2 million in fiscal 2024, helped by a $32.4-million favorable change in the fair value of derivative instruments and a 22.2% increase in adjusted EBITDA to $136.4 million.
Star Group, L.P. Price, Consensus and EPS Surprise
The company recorded significant volume growth during the quarter and fiscal 2025. Fourth-quarter home heating oil and propane volume rose 8.1% year over year to 20 million gallons, benefiting from acquisitions and other factors that offset net customer attrition. For the year, volumes increased 11.5% to 282.6 million gallons as colder temperatures and newly acquired businesses contributed meaningfully to demand.
Product gross profit improved as well: quarterly product gross profit rose 6% to $45 million, and full-year product gross profit increased $57 million, or 12%, supported by higher margins and improved service and installation profitability.
Expenses grew due to acquisition-related operating costs, higher depreciation and amortization and the impacts of weather hedge contracts. In the fiscal fourth quarter, operating expenses increased by $5 million, with $4.2 million tied to recent acquisitions; full-year delivery, branch and G&A expenses rose $36.6 million, including a $10.6-million change in weather hedge expenses and $23 million of acquisition-related costs.
Management Commentary
Management emphasized disciplined cost controls, successful integration of acquisitions, and continued investment in installations and services as key drivers of improved profitability. CEO Jeff Woosnam highlighted that despite temperatures being 8% warmer than normal, the company still achieved strong volume growth and increased adjusted EBITDA by $24.8 million year over year.
Management also noted that internal customer satisfaction indicators are improving and loss rates are at historically low levels. However, fewer customer additions due to lower real estate activity remain challenging.
CFO Rich Ambury added that acquisition-related operating costs, higher D&A and increased interest expenses shaped the quarter’s results. Nevertheless, the year’s gains in margins, volume and installation profitability more than offset these pressures.
Factors Influencing Headline Numbers
Acquisitions and colder weather were central to Star Group’s stronger annual performance. The company benefited from a 29-million-gallon increase in home heating oil and propane volume in fiscal 2025, driven by both newly acquired businesses and temperature trends. Management’s focus on disciplined margin management and service profitability also helped lift full-year gross profit.
At the same time, weather hedge outcomes had a meaningful year-over-year impact. The company recorded $3.1 million in hedge expenses in fiscal 2025 compared with a $7.5 million credit in fiscal 2024, resulting in a $10.6-million unfavorable swing. Acquisition-related operating costs, higher depreciation and greater interest expenses also weighed on the results, though these were offset by gains in volume and margins.
Other Developments
Star Group completed four acquisitions in fiscal 2025, adding nearly 12 million gallons of annual heating oil and propane volume. Over the past two years, the company has acquired nine businesses in total, underscoring its ongoing consolidation strategy in regional home-heating markets. In fiscal 2025, Star Group invested approximately $81 million in acquisitions, repurchased $16 million in units and paid out $26 million in distributions, all framed by management as steps aimed at long-term value creation.
Overall, Star Group delivered a year of meaningful operational progress supported by acquisitions, improved margins and strong cost discipline, even as customer gains and regulatory uncertainty remain watch points heading into fiscal 2026.
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SGU Posts Narrower Y/Y Q4 Loss as Acquisitions & Margins Improve
Shares of Star Group, L.P. (SGU - Free Report) have declined 1% since reporting earnings for the fourth quarter of fiscal 2025 compared with the S&P 500 index’s 0.5% fall during the same period. Over the past month, the stock has fallen 1% against the S&P 500’s 0.7% return.
Earnings & Revenue Performance
Star Group’s fourth-quarter and fiscal 2025 results showed a mix of solid volume gains, improved profitability and the ongoing impacts of acquisitions. Fiscal fourth-quarter revenues rose 3.1% year over year to $247.7 million, driven primarily by higher installations and services revenues.
The net loss narrowed to $28.7 million from a $35.1 million loss a year earlier, aided by a favorable $12.2-million swing in the fair value of derivative instruments and a $3.8-million gain from real estate sales. Star Group reported a fourth-quarter fiscal 2025 loss of 84 cents per limited partner unit, improving from a $1 loss per unit in the prior-year quarter.
For fiscal 2025, total revenues increased roughly 1% to $1.8 billion, while net income more than doubled to $73.5 million from $35.2 million in fiscal 2024, helped by a $32.4-million favorable change in the fair value of derivative instruments and a 22.2% increase in adjusted EBITDA to $136.4 million.
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
The company recorded significant volume growth during the quarter and fiscal 2025. Fourth-quarter home heating oil and propane volume rose 8.1% year over year to 20 million gallons, benefiting from acquisitions and other factors that offset net customer attrition. For the year, volumes increased 11.5% to 282.6 million gallons as colder temperatures and newly acquired businesses contributed meaningfully to demand.
Product gross profit improved as well: quarterly product gross profit rose 6% to $45 million, and full-year product gross profit increased $57 million, or 12%, supported by higher margins and improved service and installation profitability.
Expenses grew due to acquisition-related operating costs, higher depreciation and amortization and the impacts of weather hedge contracts. In the fiscal fourth quarter, operating expenses increased by $5 million, with $4.2 million tied to recent acquisitions; full-year delivery, branch and G&A expenses rose $36.6 million, including a $10.6-million change in weather hedge expenses and $23 million of acquisition-related costs.
Management Commentary
Management emphasized disciplined cost controls, successful integration of acquisitions, and continued investment in installations and services as key drivers of improved profitability. CEO Jeff Woosnam highlighted that despite temperatures being 8% warmer than normal, the company still achieved strong volume growth and increased adjusted EBITDA by $24.8 million year over year.
Management also noted that internal customer satisfaction indicators are improving and loss rates are at historically low levels. However, fewer customer additions due to lower real estate activity remain challenging.
CFO Rich Ambury added that acquisition-related operating costs, higher D&A and increased interest expenses shaped the quarter’s results. Nevertheless, the year’s gains in margins, volume and installation profitability more than offset these pressures.
Factors Influencing Headline Numbers
Acquisitions and colder weather were central to Star Group’s stronger annual performance. The company benefited from a 29-million-gallon increase in home heating oil and propane volume in fiscal 2025, driven by both newly acquired businesses and temperature trends. Management’s focus on disciplined margin management and service profitability also helped lift full-year gross profit.
At the same time, weather hedge outcomes had a meaningful year-over-year impact. The company recorded $3.1 million in hedge expenses in fiscal 2025 compared with a $7.5 million credit in fiscal 2024, resulting in a $10.6-million unfavorable swing. Acquisition-related operating costs, higher depreciation and greater interest expenses also weighed on the results, though these were offset by gains in volume and margins.
Other Developments
Star Group completed four acquisitions in fiscal 2025, adding nearly 12 million gallons of annual heating oil and propane volume. Over the past two years, the company has acquired nine businesses in total, underscoring its ongoing consolidation strategy in regional home-heating markets. In fiscal 2025, Star Group invested approximately $81 million in acquisitions, repurchased $16 million in units and paid out $26 million in distributions, all framed by management as steps aimed at long-term value creation.
Overall, Star Group delivered a year of meaningful operational progress supported by acquisitions, improved margins and strong cost discipline, even as customer gains and regulatory uncertainty remain watch points heading into fiscal 2026.