Star Group Completes Small Heating Oil Acquisition

Why It Matters

The results show Star’s ability to grow profit and manage costs despite severe weather, underscoring resilience in the volatile energy‑services sector.

Key Takeaways

• Adjusted EBITDA rose to $139 million, up $10.5 million YoY.
• Net income reached $108 million, $22 million higher than last year.
• Home heating oil and propane volumes grew 600,000 gallons to 144.5 million gallons.
• Service loss widened by $3.4 million due to extreme weather.
• Company added a $12.5 million weather hedge for fiscal 2027.

Pulse Analysis

Star Group SGU posted a solid second‑quarter of fiscal 2026, delivering adjusted EBITDA of $139 million, a $10.5 million year‑over‑year gain, and net income of $108 million, up $22 million from the comparable period. The boost came despite a harsh winter that was 6.4 % colder than last year and 2.8 % below normal, which pushed home‑heating oil and propane sales to 144.5 million gallons, a 600,000‑gallon increase. Higher per‑gallon margins offset rising service‑related costs, allowing the company to keep customer attrition at a low 0.6 %.

The quarter’s results also reflect Star’s proactive cost‑management strategy. Delivery, branch and G&A expenses rose $5.4 million, driven largely by weather‑related labor and insurance claims, yet the firm mitigated wholesale price spikes through tighter inventory controls and supply‑chain initiatives. A modest heating‑oil acquisition added volume and positioned the business for incremental growth, while the weather‑hedge program, which recorded a $5 million expense this quarter, is set to expand to a $12.5 million hedge for fiscal 2027. These measures illustrate a disciplined approach to volatility in the energy‑services market.

Looking ahead, Star Group appears well‑placed to capitalize on seasonal demand swings and the broader recovery in residential energy consumption. The combination of rising margins, disciplined expense growth, and a larger hedge buffer should cushion future extreme‑weather events and protect cash flow. Investors may view the earnings beat and strategic acquisitions as signs of resilient operating leverage, while analysts will watch the company’s ability to translate volume growth into sustainable profitability. In a market where fuel price uncertainty and climate‑driven disruptions are prevalent, Star’s performance signals a competitive edge.

Deal Summary

Star Group disclosed that it closed a small heating oil acquisition during Q2 2026, as reported in its earnings call on May 7, 2026. The deal value was not disclosed.