Star Group Reports Strong Q2 2026 Earnings as Colder Weather Lifts Heating Fuel Demand

Star Group, L.P. (NYSE: SGU) delivered a stronger fiscal second quarter for 2026, supported by colder weather, higher heating oil and propane demand, improved margins, and added contribution from acquisitions.

The company reported total revenue of $766.7 million for the quarter ended March 31, 2026, up from $743.0 million a year earlier. Net income rose to $108.3 million, while adjusted EBITDA increased to nearly $138.7 million.

Cold Weather Boosts Fuel Volumes

Star Group said home heating oil and propane gallons sold increased to 144.5 million gallons, compared with 143.9 million gallons in the prior-year quarter. The gain was modest, but it reflected colder conditions across the company’s service areas and added volume from recent acquisitions.

Temperatures in Star’s operating regions were 6.4% colder than the same quarter last year and 2.8% colder than normal, based on NOAA data cited by the company. This helped increase customer demand for heating products during the winter season.

Adjusted EBITDA Climbs Despite Higher Costs

Adjusted EBITDA rose by $10.5 million year over year. Star Group said the improvement came from stronger base business performance, acquisition benefits, better per-gallon margins, and lower weather hedge expense compared with the prior year.

However, the quarter was not without pressure. Severe winter conditions increased delivery and branch expenses, while insurance costs also rose because of higher claims activity. Direct operating costs increased by about $4.0 million, showing that colder weather can lift sales while also making operations more expensive.

Management Highlights Operational Discipline

President and CEO Jeff Woosnam said the second quarter continued many of the same trends seen in the first quarter. Colder weather supported heating oil and propane volumes, but storms and snowfall raised the company’s cost base.

Even with those challenges, management pointed to adjusted EBITDA near $139 million and customer attrition below 1% as important achievements. The company also completed one small heating oil acquisition during the quarter, continuing its strategy of disciplined expansion.

Six-Month Results Show Broader Momentum

For the first six months of fiscal 2026, Star Group generated $1.3 billion in revenue, up 6.1% from the prior-year period. Home heating oil and propane volume increased 5.3% to 238.4 million gallons.

Six-month net income rose to $144.1 million, compared with $118.8 million a year earlier. Adjusted EBITDA increased to $207.0 million, helped by higher sales volumes, stronger margins, acquisitions, and improved installation profitability.

Weather Hedges Remain a Key Factor

Star Group’s results were also affected by weather hedge contracts. The company recorded no additional second-quarter expense under those contracts because it had already recognized the $5.0 million cap during the first quarter. For the six-month period, weather hedge expense was higher than the prior year.

What This Means for Investors

The report shows that Star Group benefited from favorable winter demand, but it also underlines the company’s exposure to weather, fuel costs, insurance claims, customer retention, and operating efficiency. Higher net income and adjusted EBITDA are positive signs, yet investors may continue watching whether the company can control expenses during difficult winter conditions.

Star Group also remains active in acquisitions, which can support volume growth and market reach. Still, management appears focused on careful execution rather than rapid expansion.

Company Background

Star Group is a major U.S. home energy distributor serving residential and commercial customers, mainly in the Northeast and Mid-Atlantic regions. The company sells home heating oil, propane, diesel, gasoline, and related heating and air-conditioning services. It describes itself as the nation’s largest retail distributor of home heating oil by sales volume.

Outlook

Looking ahead, Star Group’s performance will likely depend on weather patterns, customer retention, acquisition execution, wholesale fuel prices, and its ability to manage labor, insurance, and delivery costs. The strong second quarter gives the company momentum, but the business remains closely tied to seasonal demand.

Overall, Star Group’s fiscal Q2 2026 results presented a stronger earnings picture, with higher revenue, improved profit, and solid adjusted EBITDA. The company showed resilience during a colder and more expensive winter, while continuing to build its business through acquisitions and operational improvements.

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