News Summary
EG Group has reported a mixed financial performance for the first quarter of 2025, with declines in gross profit and revenue across foodservice, fuels, and grocery sectors. Despite facing challenges, the company’s Smart Rewards program saw significant growth, and it plans to expand by acquiring nine convenience stores in the Northeast U.S. The new CEO emphasized a commitment to long-term growth through digital enhancements and small acquisitions.
Connecticut
EG Group has faced a mixed financial performance for the first quarter of 2025, corresponding to the three-month period ending March 31. The company reported declines in gross profit and revenue across its foodservice, fuels, and grocery and merchandise sectors both in the U.S. and worldwide.
In the United States, the company noted a drop in its underlying EBITDA, which fell by 12% year-over-year to $50 million. Revenue figures for grocery and merchandise in the U.S. totaled $577 million, foodservice revenue was $32 million, and fuel revenue reached $1.05 billion. The average gross profit composition from U.S. operations indicated that 49% came from grocery and merchandise, 42% from fuel, 3% from foodservice, and 6% classified as other income.
Despite these declines, EG Group experienced significant growth in its U.S. rewards program, Smart Rewards, which now boasts a membership of 2 million and an increase of 150% in daily active users. The company has also made strides in its expansion strategy by acquiring nine convenience stores in the Northeast U.S. Each store, with an average size of 5,000 square feet, promises to operate under the Cumberland Farms brand. These new locations will include three in Massachusetts and six in Rhode Island, with the transaction expected to finalize before September 2025.
The overall financial outlook for the quarter depicted a decline in revenue across the board. In the U.S., sales in specific categories such as hot dispensed beverages, salty snacks, and cigarettes dropped by approximately 8-10% year-over-year. This was compounded by harsh winter weather conditions, resulting in over 100 store closures in Florida, which negatively impacted customer traffic and operational performance.
EG Group reported a total EBITDA of $153 million for the first quarter, showing an 11% decrease compared to the same period last year. Global numbers reflected revenue trends as well, with grocery and merchandise sales declining to $873 million from $938 million year-over-year and gross profit shrinking 5% to $262 million. Fuel revenue decreased globally to $4.11 billion from $4.62 billion in Q1 2024, with fuel gross profit also declining by 3% to $376 million. Total foodservice revenue saw a more dramatic decline, dropping to $139 million from $266 million in the previous year, with foodservice gross profit falling from $152 million to $84 million.
Looking ahead, Russ Colaco, the new CEO of EG Group, emphasized the company’s commitment to its long-term growth strategy, despite navigating current short-term challenges. The firm intends to enhance its digital loyalty programs through artificial intelligence and third-party partnerships, while preparing for continued growth from small-scale acquisitions.
Notably, the number of operating sites remained consistent at 1,463 across the U.S., highlighting the stability despite the adverse factors that influenced revenue performance. In conjunction, EG Group has announced the appointments of Erik Chalut as chief legal officer and Steve Briggs as executive vice president of corporate finance, both of whom are set to begin in June 2025.
Founded in 2001, EG Group operates over 6,200 sites globally, with a presence in North America, Europe, and Australia. It established its U.S. operations through the acquisition of Kroger’s convenience store network in 2018 and has since become a significant player in the sector.
Deeper Dive: News & Info About This Topic
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