Global Partners Unveils $85M–$105M 2025 Capex Plan and Expands Houston Marine Fuel Operations

Executive Highlights

Eric Slifka, President, CEO & Vice Chairman of Global Partners LP (GLP), shared insights on the company's strong third quarter performance. He emphasized the operational strength and disciplined execution that contributed to the success of the Wholesale segment. The segment experienced a strong performance in Q3, driven by favorable market conditions in gasoline and the continued optimization of the liquid energy terminal network. Slifka highlighted the scaling of terminal assets over the past two years, which has significantly enhanced the product distribution network and positioned Global Partners for long-term growth. The integration of terminals acquired from Motiva, Gulf, and ExxonMobil was cited as a key driver for throughput growth and network flexibility.

Slifka also mentioned the expansion of marine fuel supply operations into the port of Houston, stating, "we expanded our marine fuel supply operations into the port of Houston... now we have extended this business into the Gulf Coast." This move is expected to provide additional opportunities for the company to leverage its infrastructure and expand its market presence.

In addition to the wholesale segment, the company continued to invest in its retail network. New convenience store brands were introduced, and a new loyalty platform was launched to "drive repeat business, build long-term loyalty and strengthen the connection between our guests and our brands."

Slifka announced that the Board declared a quarterly cash distribution of $75.50 per common unit or $3.02 on an annualized basis. This marked the 16th consecutive quarterly distribution increase, reflecting the company's commitment to returning value to shareholders.

Financial Performance

Gregory Hanson, Chief Financial Officer, provided details on the financial results for the third quarter. Net income for the quarter was $29 million, compared to $45.9 million in the same period last year. Hanson noted that the prior year's quarter included a $7.8 million one-time gain on asset sales, which affected the comparison. EBITDA was $97.1 million, with adjusted EBITDA at $98.8 million. Distributable cash flow was $53 million, while adjusted distributable cash flow stood at $53.3 million.

Operating expenses decreased to $132.5 million, but SG&A expenses increased to $76.3 million, reflecting increases in wages and benefits. Interest expense was $33.3 million, and CapEx for the quarter reached $19.7 million. As of September 30, the company's leverage ratio was 3.6x, with outstanding credit facilities totaling $240.6 million (working capital) and $124.8 million (revolving credit).

Outlook and Strategic Focus

The company expects full-year maintenance capital expenditures of approximately $45 million to $55 million and expansion capital expenditures (excluding acquisitions) of approximately $40 million to $50 million. These figures are primarily allocated for gasoline stations and terminal investments. Hanson noted that current CapEx estimates depend on various factors, including project completion timing, equipment availability, workforce conditions, weather, and unanticipated events or opportunities requiring additional maintenance or investments.

There was no explicit change in overall strategic direction from the previous quarter, but management reiterated a focus on capital discipline and operational efficiency. This approach reflects the company's commitment to maintaining financial stability while pursuing growth opportunities.

Q&A Insights

During the earnings call, Selman Akyol from Stifel asked about the Houston bunkering market entry. Slifka responded that the company already operates in the business and feels its assets are differentiated due to facility location and unique supply approaches.

Akyol also inquired about store count and the acquisition environment. Hanson explained recent optimization efforts, including seven site sales, 15 conversions, and terminations of low-margin relationships. He noted that there may not be significant opportunities for site divestitures in the near future, as the company is generally satisfied with its portfolio.

Regarding competition from Parkland, Hanson clarified that GLP does not operate in their footprint. On consumer pressure, Hanson acknowledged that lower-income consumers are trading down to more sub-generic brands. Despite fewer company-operated sites, C-store performance was up year-over-year.

Labor-related questions were also addressed, with Hanson noting that wage inflation has calmed down slightly, though high turnover remains a challenge. Compared to the '22 and '23 time frames, the situation has improved, but challenges persist.

Sentiment and Market Analysis

Analysts' tone was neutral to slightly cautious, with questions focused on market expansion, portfolio optimization, consumer trends, and labor conditions. Management maintained a confident and steady tone in prepared remarks and responses, emphasizing operational discipline and flexibility. Hanson acknowledged some market pressures but expressed satisfaction with the company's portfolio positioning and retail performance.

Compared to the previous quarter, sentiment remained consistent, with both sides showing a pragmatic focus on execution and market realities.

Quarter-over-Quarter Comparison

The third quarter narrative shifted from weather-related impacts in Q2 to a focus on market conditions, segment performance, and network optimization. Guidance for capital expenditures was revised downward, with maintenance CapEx now estimated at $45 million to $55 million (previously $60 million to $70 million), and expansion CapEx at $40 million to $50 million (previously $65 million to $75 million). Site optimization activity slowed compared to the heavier divestiture and conversion actions discussed in the prior quarter.

Analysts’ focus evolved from weather and portfolio rationalization to market entry, consumer trends, and M&A environment. Management confidence remained steady, with continued emphasis on capital discipline and supply chain flexibility.

Risks and Concerns

Management highlighted ongoing pressure on lower-income consumers, noting trade-down behavior to less premium brands. Labor turnover remains high, though wage inflation is less severe than in previous years. CapEx estimates are subject to timing, equipment and workforce availability, weather, and unanticipated events.

Analysts raised questions about competitive exposure, consumer weakness, and the acquisition landscape.

Final Takeaway

Global Partners LP emphasized disciplined execution and operational strength in Q3 2025, with continued investment in its terminal and retail networks and expansion into new markets like Houston marine fuel. Management highlighted steady segment performance and robust distribution coverage, while acknowledging consumer and labor pressures. Revised capital expenditure guidance and a focus on portfolio optimization indicate a measured approach to growth and value creation amid evolving market conditions.