Shares of Star Group, L.P. Common Unit (SGU Quick QuoteSGU - Free Report) have gained 5.7% since reporting results for the first quarter of fiscal 2026. This compares with the S&P 500 index’s 3.8% decline over the same time frame. Over the past month, the stock has gained 10.4% compared with the S&P 500’s 1.1% return.

Earnings & Revenue Performances

For first-quarter fiscal 2026 ended Dec. 31, 2025, Star Group reported total revenues of $539.3 million, representing a 10.5% increase from $488.1 million in the year-ago period, driven by higher product volumes, and growth in service and installation revenues. Net income rose 9% to $35.8 million from $32.9 million a year earlier.

Net income available to limited partners increased to $35.4 million from $32.6 million. On a per-unit basis, basic and diluted income rose 12.7% to 89 cents from 79 cents in the prior-year quarter. Adjusted EBITDA, a key non-GAAP profitability measure tracked by management, climbed 32% year over year to $68.4 million from $51.9 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

Operationally, the quarter benefited from a significant increase in heating demand. Home heating oil and propane volumes rose by 11.5 million gallons, or 13.9%, to 93.9 million gallons, supported by colder weather and incremental volumes from prior acquisitions. Total product sales increased to $448 million from $399.5 million, while installation and service revenues grew to $91.3 million from $88.6 million.

Product gross profit improved meaningfully, reflecting both higher volumes and improved per-gallon margins, although service operations faced margin pressure due to elevated costs associated with unusually cold conditions and higher propane tank installations.

Management Commentary

Management characterized the start of fiscal 2026 as strong, citing the combined impacts of acquisitions, operational execution and weather conditions that were nearly 19% colder than the prior year and 6% colder than normal.

President and chief executive officer Jeff Woosnam highlighted improvements in efficiency, physical supply management and per-gallon margins, noting that these initiatives translated into meaningful bottom-line gains despite operational challenges tied to sustained cold temperatures. Management also pointed to modest net customer attrition during the quarter and emphasized continued focus on controlling costs, and expanding service and installation profitability.

Factors Influencing Headline Numbers

Weather played a central role in shaping quarterly results. Colder-than-normal temperatures boosted heating volumes but also triggered $5 million in expenses related to the company’s weather hedge contracts compared with no such expense in the prior-year quarter.

Star Group recorded an unfavorable $10.7-million year-over-year change in the fair value of derivative instruments, which partially offset gains from higher Adjusted EBITDA. Operating expenses rose, primarily reflecting higher delivery costs tied to increased volumes and incremental costs associated with severe winter conditions. These factors were partially offset by disciplined cost management, as underlying operating costs excluding weather-related items rose at a more modest pace.

Outlook

Management noted that cold weather conditions had continued into the second quarter, with January finishing colder than both the prior year and historical norms. Executives indicated confidence in the organization’s ability to manage through challenging operating conditions while maintaining service levels and cost discipline.

Management also reiterated its longer-term focus on customer service, expense control, and growth in service and installation profitability, while remaining cautious about forecasting the remainder of the heating season given inherent weather variability.