CrossAmerica Partners credits record-breaking year to 7-Eleven acquisition

Dive Brief:

Convenience retailer and wholesaler CrossAmerica Partners experienced “record results” in 2022 as a result of its spring 2021 acquisition of 106 7-Eleven stores, President and CEO Charles Nifong said during the company’s earnings call Tuesday.
CrossAmerica’s full-year retail gross profits skyrocketed 61% from 2021 to 2022, including gross profit increases of 85% in motor fuel and 38% in merchandise, according to its earnings report.
The “main reason” CrossAmerica saw record results from the acquisition was due to the fact that 2022 was the first full calendar year CrossAmerica operated those 106 sites — meaning it experienced the revenues, expenses and profits associated with those stores for the first time, a spokesperson from the company said in an email.

Dive Insight:

CrossAmerica acquired the 7-Eleven sites in May 2021 for $263 million. The deal consisted of company-operated sites that had to be divested as part of 7-Eleven’s $21 billion acquisition of Speedway, which closed a week prior to CrossAmerica’s acquisition.

Once 2022 began, CrossAmerica began reaping the full benefits of the move, as the assets from those stores officially became part of CrossAmerica’s financial reports.

“As we compare that to calendar 2022, the vast majority of the 7-Eleven acquired stores were part of the CrossAmerica network for all of the calendar year 2022, which of course includes the related financials associated with these stores,” the spokesperson said.

On the retail fuel side, CrossAmerica’s margins grew 41% from 2021 to 2022, according to its earnings report. Additionally, same-store merchandise sales — excluding cigarettes — grew 6% for the fourth quarter 2022 when compared to the fourth quarter 2021.

“Our acquisition of the 7-Eleven sites in 2021 materially contributed to our record results in 2022 and demonstrated the strategic value of the acquisition,” Nifong said during the earnings call.

Allentown, Pennsylvania-based CrossAmerica Partners operates 253 convenience stores across 10 states. It also distributes fuel to about 1,700 locations across 34 states.