Global Partners’ 2026 Q2 Earnings Call: Consumer Demand and M&A Strategy Claims Don’t Match

Date of Call: Aug 7, 2026

Guidance:

• Expect current steep backwardation in product pricing to remain, driving focus on disciplined inventory management.
• For full year 2026, maintenance CapEx expected in the range of $60 million to $85 million.
• Expansion CapEx, excluding acquisitions, expected in the range of $70 million.

Business Commentary:

Strong Financial Performance:

• Global Partners reported net income of $71 million for Q2 2026, compared to $25.2 million in the prior year period. EBITDA increased to $146 million from $95.7 million, and adjusted EBITDA rose to $148.2 million from $98.2 million.
• The significant growth was driven by improved fuel margins, increased product margins across segments, and favorable market conditions in gasoline and bunkering.

Increased Product Margins Across Segments:

• The GDSO segment product margin increased by $37.3 million to $245.2 million, with a notable rise in gasoline distribution margins. The wholesale segment product margin also increased by $14.8 million to $106.5 million, and the commercial segment product margin rose by $4.4 million to $10.5 million.
• These increases were primarily due to higher fuel margins, more favorable market conditions in gasoline, and strong performance in the bunkering group.

Cash Flow and Distribution:

• Global Partners reported distributable cash flow adjusted to DCF of $92.5 million, up from $52.6 million in the previous year. The company announced a quarterly cash distribution of 78 cents per common unit, annualized to $3.12.
• The strong cash flow was supported by healthy distribution coverage and the company's ability to capture value in a dynamic market environment.

Simplification of Capital Structure:

• The company redeemed all outstanding Series B fixed rate preferred units on July 30th, which were accretive to equity and had a fixed rate of 9.5%.
• This action was aimed at simplifying the capital structure and enhancing financial flexibility, given the company's strong balance sheet and excess capacity.

Sentiment Analysis:

Overall Tone: Positive

• Eric Slifka stated, 'We delivered a strong second quarter with each of our operating segments contributing meaningfully.' Gregory Hanson added, 'We are pleased with the results across our segments and our team's ability to capture value in a dynamic market environment.' They also noted the board approved a quarterly cash distribution and highlighted a strong balance sheet.

Q&A:

• Question from Greg Brody (Bank of America): Concerns about higher prices affecting consumer purchases at the stations.
  Response: Management noted a slight impact with average fill-up size down a little and some trading down from 93 octane to 87, but emphasized no material effect on overall transactions or store sales.

• Question from Greg Brody (Bank of America): Asked about the decision to pay down the preferred units and if it reflects a change in credit profile.
  Response: Management stated the redemption was accretive, simplified the capital structure, and was driven by excess cash flow and cost of capital considerations, not a permanent shift in credit strategy.

• Question from Greg Brody (Bank of America): Inquired about the M&A environment and potential for activity.
  Response: Management described the environment as busy, indicated they are positioned to execute on deals, and will look for the right assets that complement their existing base.

Contradiction Point 1

Assessment of Consumer Demand Impact

Contradiction on materiality of higher fuel prices' effect on consumer behavior.

Greg Brody (Bank of America) - Greg Brody (Bank of America)

2026Q2: There is a slight impact from higher fuel prices, evident in a small decrease in the average fill-up size... these effects are not material. - Mark Romain(CFO)

Are higher fuel prices impacting consumer purchasing behavior? - Selman Akyol (Stifel)

2026Q1: The consumer remains healthy overall, but higher gasoline prices may impact long-term demand. - Gregory B. Hanson(CFO)

Contradiction Point 2

Characterization of the M&A Environment

Contradiction in describing the competitive nature of the acquisition market.

Will Greg Brody from Bank of America participate in the earnings call? - Greg Brody (Bank of America)

2026Q2: The M&A environment is busy with many opportunities. The company will look for the right assets... The strategy is to be the high bid on assets that fit. - Eric Slifka(COO)

How active is the company in the current M&A environment? - Selman Akyol (Stifel)

2026Q1: The company continues to evaluate and look at all acquisition opportunities, staying involved in every process. Sellers' expectations are based more on cash flow and valuations (multiples), and the market remains competitive. - Eric Slifka(CEO)

Contradiction Point 3

Capital Allocation Strategy and M&A Approach

Strategy for using preferred equity shifts from being a tool for acquisitions to being simplified away.

Greg Brody (Bank of America) - Greg Brody (Bank of America)

2026Q2: The redemption was accretive and strategic... The company retains flexibility to use preferred equity or the public market for future acquisitions but currently has a strong, simplified balance sheet. - Gregory Hanson(CEO)

Was the redemption of Series B preferred units a permanent capital structure strategy change or a cost-accounting move? - Greg Brody (Bank of America)

2025Q4: The company will look for the right assets that complement its existing asset base. The strategy is to be the high bid on assets that fit and the company is positioned to execute on deals. - Eric Slifka(COO)

Contradiction Point 4

Consumer Behavior Impact

Contradiction on the materiality of consumer spending pressure.

Greg Brody (Bank of America) - Greg Brody (Bank of America)

2026Q2: There is a slight impact from higher fuel prices... these effects are not material. Convenience store sales remain strong... - Mark Romain(CFO)

Are higher fuel prices impacting consumer purchasing behavior? - Selman Akyol (Stifel, Nicolaus & Company, Incorporated)

2025Q3: The company has seen definite pressure on lower-income consumers this year... - Gregory Hanson(CFO)

Contradiction Point 5

Capital Structure Strategy

Contradiction on the strategic intent behind a capital structure action.

Greg Brody (Bank of America) - Greg Brody (Bank of America)

2026Q2: The redemption was accretive and strategic... to simplify the capital structure. - Gregory Hanson(CEO)

Is the redemption of Series B preferred units a permanent shift in capital structure strategy or a cost-accounting adjustment? - Selman Akyol (Stifel, Nicolaus & Company, Incorporated)

2025Q3: The company will continue to 'move around the edges' of their portfolio... there is not a large runway for significant site divestitures currently. - Gregory Hanson(CFO)