Yesway (YSWY) Q3 2026 earnings review
Yesway beats its fuel profit plan, but card fees rise
Yesway, the convenience-store chain behind the Allsup's brand, kept fuel profits above its baseline while inside-store sales picked up. Third-quarter profit before interest, taxes, depreciation and one-offs rose 9% to $60 million as fuel margins of 46 cents per gallon beat the low-40-cent assumption in the company's plan. Chief executive Thomas Trkla also closed the sale of 29 Iowa and Kansas stores and reaffirmed the full-year outlook, which by our math leaves $50 million of fourth-quarter profit.
| Same-store merchandise sales | +1.9% up from +1.2% last quarter |
|---|---|
| Fuel margin | 46.1 cents/gal above low-40s plan; 52.6c in Q2 |
| Adjusted EBITDA | $59.6M +8.6% from a year ago |
| Full-year profit outlook | Unchanged $235M–$245M Adjusted EBITDA |
⚖️ Verdict: 🟢 Bullish
The story got better because the two immediate operating worries eased in the third quarter. Pump margins cooled from the second quarter's 53-cent peak without falling to the low-40s, and existing-store merchandise growth rebounded to 2%. One caution: operating profit excluding asset-sale gains and prior-year charges fell 5% by our math because higher gas prices drove up credit-card fees and new stock awards lifted paychecks.
The question now is whether holding the full-year profit target after a third-quarter fuel beat reflects caution or a fourth-quarter margin drop. Either October pump margins finally slipped below 40 cents, or management is leaving room to beat its year-end target. Fourth-quarter cents per gallon and the 2027 store-opening target will settle both debates.
🐂 Bull Case
Fuel Profitability Beat the Plan's Assumption
Yesway's profit swings on how many cents it keeps on each gallon of gas and diesel after wholesale costs. Management built its full-year profit plan on the assumption that this fuel margin would cool to the low-40-cent range in the second half of 2026. That drop is the main worry for investors after a windfall first half.
Pump profitability cooled in the third quarter, but it stayed well above the company's baseline. The convenience-store operator earned 46.1 cents per gallon, down from 52.6 cents in the second quarter but up 14.4% from 40.3 cents a year ago. Fuel gross profit — fuel sales minus wholesale fuel cost — rose 19.8% to $76.0 million.
Even with that cushion in the bank, chief executive Thomas Trkla kept the full-year outlook for Adjusted EBITDA — profit before interest, taxes, depreciation and one-offs — at $235 million to $245 million. Because Yesway has already earned $189.7 million in the first nine months, the middle of that range leaves just $50.3 million for the fourth quarter by our math.
What to watch: fourth-quarter fuel cents per gallon when full-year results arrive. If pump margins hold above 42 cents, the company will finish near or above the top of its $245 million target.
Store Sales Accelerated and Exit Closed Early
High gas prices can hurt a convenience store when drivers spend so much at the pump that they buy less food and drinks inside. Yesway saw its same-store inside merchandise sales — sales at locations open at least a year — slow from 4.5% growth in the first quarter to 1.2% in the second. Investors needed to see whether traffic would stall.
In the third quarter, same-store merchandise sales sped back up to 1.9% growth, while same-store fuel volume rose 1.1% for a fifth straight positive quarter. The Texas-based retailer also closed the sale of 29 underperforming stores in Iowa and Kansas in September, ahead of its year-end deadline. Those sold shops contributed only $0.3 million of the quarter's $77.0 million in Store Contribution, which is store-level operating profit.
What to watch: inside merchandise gross margin, which dipped 0.1 percentage point from a year ago to 35.1%. A further drop in the fourth quarter would mean Yesway is giving up profit per item to keep shoppers buying.
🐻 Bear Case
Card Fees and Paychecks Cut Operating Profit
Yesway highlighted that operating income rose to $38.8 million from $35.4 million a year ago, and Trkla praised the chain's strong profitability. However, the headline operating profit benefited from $4.1 million in gains on asset sales, mostly from the Iowa and Kansas exit, compared with $0.3 million a year earlier. Last year's quarter also carried a $1.4 million goodwill impairment charge that did not repeat.
- Operating profit excluding asset sales and goodwill charges: $34.6 million, down 5.3% from $36.6 million a year ago by our math
- Selling, general and administrative expenses (overhead and card fees): up 13.9% to $60.7 million
- Salaries and employee benefits: up 16.8% to $59.1 million, including $6.3 million in new stock-based pay
- Corporate overhead inside the Store Contribution table: up 52.3% to $23.7 million
When pump prices jump 51.6%, customers swipe credit cards for larger dollar bills, so Yesway pays "higher interchange fees related to higher revenue" without earning extra cents per gallon. At the same time, new public-company stock awards and store wages pushed paychecks up four times faster than inside merchandise sales.
What to watch: selling, general and administrative expenses in the fourth quarter. If card fees and overhead keep growing faster than gross profit, store-level gains will not reach the bottom line.
Construction Pace Trails the Five-Year Target
Yesway pitched its April initial public offering on building 130 to 135 new convenience stores over five years. Reaching that goal requires opening roughly 26 to 30 locations a year. In the third quarter, the retailer opened two stores, including its first location in Arizona, bringing its nine-month total to four openings.
Management reaffirmed its plan to open six to eight new stores for the full year, which leaves two to four openings for the fourth quarter by our math. While third-quarter capital spending jumped to $36.7 million as construction crews worked on future sites, the company still has to quadruple its annual opening pace starting in 2027 to hit its five-year target.
What to watch: the 2027 new-store opening target, which arrives with fourth-quarter results. Anything below 15 stores would put the five-year construction goal further behind schedule.
Risks this quarter didn't answer
Several standing balance-sheet, acquisition and margin questions received no new details in the third-quarter earnings release.
- Debt-funded acquisitions: Trkla named selective acquisitions as a priority, and any deal taking debt near four times profit would test the balance sheet.
- April 2028 debt maturity: the release gave no refinancing timetable for the $382.3 million term loan and $223.4 million in financing obligations.
- Diesel margin gap: management credits diesel exposure for high fuel profits, so disclosing the cents-per-gallon gap over gasoline would show how much is permanent.
- Tax Receivable Agreement payments: the $92.3 million liability to pre-IPO owners stayed unchanged, and the 10-Q filing will show when cash payments begin.
👓 Other Themes
Price Increases Carry Inside Store Sales
Trkla noted that Yesway operated "against a challenging consumer environment" during the third quarter. Total inside merchandise revenue rose 4.0% to $246.4 million, which the retailer attributed to new store openings and "pricing actions taken during 2026 and late 2025". Because price increases did the heavy lifting while same-store merchandise gross profit rose just 1.4%, unit volumes inside the stores remain tight.
💲 Other KPIs
Net debt — total debt and lease financing obligations minus cash — fell by $119.5 million over the first nine months of 2026 by our math. Yesway used proceeds from its April stock offering and $171.0 million in nine-month operating cash flow to pay off $50.0 million on its credit line and build cash to $104.6 million.
Spending on property and equipment more than tripled from $11.3 million a year ago and rose from $24.2 million in the second quarter. The acceleration brings nine-month capital spending to $71.8 million as Yesway buys land and builds stores for late 2026 and 2027 openings.
Amounts owed by customers and card processors more than doubled from $24.5 million at the end of 2025, rising 118.2% by our math as retail fuel sales jumped 51.6%. Fuel accounts payable grew $44.2 million over the same nine months, so fuel suppliers funded the higher working capital.
🔮 Guidance
Unchanged. The full-year target for profit before interest, taxes, depreciation and one-offs stays at a $240 million middle after a $25 million raise last quarter. With $189.7 million earned in the first nine months, the plan leaves $50.3 million for the fourth quarter by our math, down 15.6% from the third quarter.
Unchanged. Management kept its target for sales growth at existing stores inside the same band for a third straight quarter. Nine-month growth sits at 2.4%, so hitting the 2.25% middle of the range requires about 1.8% growth in the fourth quarter by our math, matching the third quarter's 1.9% pace.
Unchanged. The construction budget remains at a $90 million middle for a third quarter. Because the convenience-store chain has already spent $71.8 million on property and equipment through September, the outlook leaves about $18.2 million for the fourth quarter by our math, half of the third quarter's $36.7 million bill.
Unchanged. Yesway still plans to open six to eight locations this year. Having opened one store in the first quarter, one in the second and two in the third, the US retailer must open two to four stores in the final three months of the year to meet its target.
❓ Key Questions
Why hold the profit outlook after beating on fuel?
Third-quarter fuel margins of 46.1 cents per gallon beat the low-40-cent assumption built into the second-half plan. Holding the full-year profit target implies either fourth-quarter fuel margins dropped below 40 cents or store expenses are running higher than planned.
What were the cash proceeds for the 29 sold stores?
Yesway closed the sale of its 29 Iowa and Kansas locations in September and booked a $4.1 million disposal gain. Management only disclosed nine-month asset-sale proceeds of $8.2 million, leaving the exact sale price and buyer unnamed.
How many stores will Yesway build in 2027?
Capital spending jumped to $36.7 million in the third quarter, but only four stores opened in the first nine months. Investors need the 2027 opening schedule to see if construction can scale toward 30 stores a year.
How much did credit-card fees rise in the third quarter?
Management blamed higher card interchange fees for rising operating expenses as fuel revenue climbed 51.6%. Disclosing the dollar increase in card fees would show how much of the 13.9% overhead jump was tied to pump prices.