Delek Us Holdings 2025 Q1 Earnings Misses Targets as Net Loss Widens 529%

Delek Us Holdings reported its fiscal 2025 Q1 earnings on May 7th, 2025. The company missed expectations with a 15.5% drop in revenue to $2.64 billion, significantly widening its net loss by 529.0% to $-158.50 million. Despite these challenges, Delek Us maintained its full-year Adjusted EBITDA guidance in line with expectations, forecasting between $480 and $520 million. The company also anticipates cash flow improvements of at least $120 million from the Enterprise Optimization Plan in the second half of 2025. Delek's strategic initiatives aim to enhance financial flexibility and liquidity.

Revenue

Earnings/Net Income
Delek Us Holdings's losses deepened to $2.78 per share in 2025 Q1 from a loss of $0.51 per share in 2024 Q1 (445.1% wider loss). Meanwhile, the company's net loss widened to $-158.50 million in 2025 Q1, representing a 529.0% increase from the $-25.20 million loss recorded in 2024 Q1. The EPS performance was disappointing, reflecting significant financial challenges.

Price Action
The stock price of Delek Us Holdings has edged down 2.57% during the latest trading day, has climbed 7.83% during the most recent full trading week, and has surged 16.13% month-to-date.

Post-Earnings Price Action Review
Over the past five years, the strategy of purchasing Delek Us Holdings shares after a quarter-over-quarter revenue drop and holding for 30 days has yielded poor results. This approach resulted in a return of -19.60%, significantly underperforming the benchmark return of 24.41%. The excess return was -44.01%, with a compound annual growth rate (CAGR) of -5.95%, indicating substantial losses. Additionally, the strategy experienced a high maximum drawdown of -34.78% and a Sharpe ratio of -0.35, reflecting both significant risk and negative returns. These figures suggest that this strategy has not been effective in generating positive returns and carries a high degree of risk.

CEO Commentary
"We showed incremental progress in achieving our Sum of the Parts goals and improving the overall profitability of the company, despite continued challenging market conditions," said Avigal Soreq, President and Chief Executive Officer of Delek US. He expressed excitement regarding the progress being made with the Enterprise Optimization Plan (EOP), expecting cash flow improvements of at least $120 million by the second half of 2025. Soreq noted that new intercompany agreements enhance the economic separation from Delek Logistics Partners (DKL) and unlock over $250 million in liquidity, aligning with the strategic goal of midstream deconsolidation.

Guidance
Delek US anticipates delivering full-year Adjusted EBITDA guidance of $480 to $520 million for DKL. The company expects to achieve cash flow improvements of at least $120 million from the Enterprise Optimization Plan in the second half of 2025. Additionally, following the new intercompany agreements, approximately 80% of DKL's cash flows are projected to come from third-party sources, enhancing financial flexibility and liquidity.

Additional News
Within the past three weeks, Delek Us Holdings has seen notable non-earnings-related developments. The company completed the sale of 100% equity interests in four subsidiaries owning and operating 249 retail fuel and convenience stores to a subsidiary of Fomento Economico Mexicano, S.A.B. de C.V. (FEMSA), with net cash proceeds before taxes of approximately $390.2 million. Additionally, Delek Logistics Partners LP announced authorization to buy back common units up to $150 million from Delek US Holdings through 2026, reflecting confidence in long-term strategic goals. Delek US is also No. 31 on CSP’s 2024 Top 202 ranking of U.S. convenience-store chains by store count, highlighting its strong presence in the sector.