Suburban Propane Swings to Loss Amid Revenue Decline

TL;DR

SPH is getting squeezed by lower prices and volumes, making it a tough bet right now.

AI Summary

SUBURBAN PROPANE PARTNERS LP reported a net loss of $10.9 million for the three months ended June 28, 2025, a significant decline from the net income of $10.1 million in the prior-year period. Revenue for the three months ended June 28, 2025, was $287.5 million, down from $320.1 million in the same period last year, representing a 10.2% decrease. The nine-month period saw revenue decrease to $1.45 billion from $1.62 billion, a 10.5% reduction. The company's operating income for the three months ended June 28, 2025, was $1.1 million, a sharp drop from $27.9 million in the prior-year period. This decline was primarily driven by lower average selling prices for propane and refined fuels, coupled with decreased sales volumes. The company continues to manage its debt, with Senior Notes due 2027 and 2031 outstanding. Strategic outlook includes managing commodity price volatility and operational efficiency in a challenging market.

Why It Matters

This performance signals a challenging environment for energy distributors, impacting investor returns through reduced profitability and potentially lower distributions. Employees may face pressure on job security and compensation as the company navigates declining revenues. Customers could see fluctuating prices due to commodity volatility, though lower prices might offer some relief. The broader market for propane and refined fuels is experiencing headwinds, indicating competitive pressures and a shift in energy consumption patterns that could affect other players in the sector.

Risk Assessment

Risk Level: high — The company reported a net loss of $10.9 million for the three months ended June 28, 2025, compared to a net income of $10.1 million in the prior-year period. Revenue also decreased by 10.2% to $287.5 million for the quarter, indicating significant operational and market challenges. These financial declines, coupled with commodity price volatility, present a high risk to future profitability and investor returns.

Analyst Insight

Investors should consider reducing exposure to SPH given the significant decline in net income and revenue, coupled with ongoing commodity price volatility. Monitor future filings for signs of stabilization in sales volumes and average selling prices before considering re-entry.

Financial Highlights

revenue

$287.5M

operating Margin

0.38%

net Income

-$10.9M

revenue Growth

-10.2%

Revenue Breakdown

Key Numbers

• $10.9M — Net Loss (For the three months ended June 28, 2025, a swing from $10.1M net income.)
• $287.5M — Quarterly Revenue (Down 10.2% from $320.1M in the prior-year period.)
• $1.45B — Nine-Month Revenue (Decreased from $1.62B, a 10.5% reduction year-over-year.)
• $1.1M — Quarterly Operating Income (A sharp drop from $27.9M in the prior-year period.)
• 10.2% — Quarterly Revenue Decrease (Reflects lower average selling prices and decreased sales volumes.)

Key Players & Entities

• SUBURBAN PROPANE PARTNERS LP (company) — filer of the 10-Q
• $10.9 million (dollar_amount) — net loss for the three months ended June 28, 2025
• $10.1 million (dollar_amount) — net income for the prior-year period
• $287.5 million (dollar_amount) — revenue for the three months ended June 28, 2025
• $320.1 million (dollar_amount) — revenue for the prior-year period
• $1.45 billion (dollar_amount) — revenue for the nine months ended June 28, 2025
• $1.62 billion (dollar_amount) — revenue for the nine months ended June 29, 2024
• $1.1 million (dollar_amount) — operating income for the three months ended June 28, 2025
• $27.9 million (dollar_amount) — operating income for the prior-year period
• Senior Notes due 2027 and 2031 (company) — outstanding debt instruments

FAQ

Risk Factors

• Commodity Price Volatility [high — market]: The company's financial performance is significantly impacted by fluctuations in the prices of propane, refined fuels, and natural gas. Lower average selling prices for these commodities directly led to a 10.2% decrease in quarterly revenue and a sharp drop in operating income from $27.9 million to $1.1 million for the three months ended June 28, 2025.
• Decreased Sales Volumes [medium — operational]: In addition to lower prices, Suburban Propane experienced decreased sales volumes across its product lines. This reduction in volume, combined with price declines, resulted in a 10.2% year-over-year revenue decrease for the quarter and a 10.5% decrease for the nine-month period.
• Debt Management [medium — financial]: The company has outstanding Senior Notes due 2027 and 2031. While not explicitly detailed as a risk in this filing excerpt, managing debt obligations is crucial, especially during periods of declining revenue and profitability, to maintain financial stability and access to capital.
• Challenging Market Conditions [high — market]: The company operates in a challenging market environment. This is evidenced by the significant decline in net income to a loss of $10.9 million for the quarter ended June 28, 2025, compared to a $10.1 million profit in the prior year, indicating broader economic or industry pressures.

Industry Context

Suburban Propane Partners LP operates in the retail distribution of propane, refined fuels, and natural gas. The industry is characterized by its dependence on commodity prices, seasonal demand, and increasing competition from alternative energy sources and direct utility services. Companies in this sector face ongoing challenges related to infrastructure, regulatory compliance, and managing price volatility to maintain profitability.

Regulatory Implications

As a distributor of energy products, Suburban Propane Partners LP is subject to various federal, state, and local regulations concerning safety, environmental protection, and transportation. Compliance with these regulations requires ongoing investment and operational diligence. Changes in energy policy or environmental standards could also impact operational costs and market dynamics.

What Investors Should Do

1. Monitor commodity price trends and hedging strategies.
2. Analyze operational efficiency improvements.
3. Assess debt levels and repayment capacity.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance and condition. (This document is the 10-Q filing for Suburban Propane Partners LP, providing the latest financial data and operational insights.)

Senior Notes

Unsecured, long-term debt instruments issued by a corporation, ranking below secured debt but above subordinated debt in the event of bankruptcy. (Suburban Propane Partners LP has outstanding Senior Notes due 2027 and 2031, which represent a significant portion of its debt obligations.)

Operating Income

A measure of a company's profit after deducting operating expenses from its revenue, before accounting for interest and taxes. (The sharp decline in operating income from $27.9 million to $1.1 million highlights the impact of reduced sales and pricing on the company's core business operations.)

Commodity Price Volatility

Significant and unpredictable fluctuations in the market prices of raw materials or primary agricultural products. (This is a key risk factor for Suburban Propane, as it directly affects their revenue and profitability due to the nature of their business selling propane, refined fuels, and natural gas.)

Year-Over-Year Comparison

Compared to the prior-year period, Suburban Propane Partners LP has experienced a significant downturn. Revenue for the three months ended June 28, 2025, decreased by 10.2% to $287.5 million, and operating income plummeted from $27.9 million to $1.1 million. This resulted in a net loss of $10.9 million, a stark contrast to the $10.1 million net income reported previously. New risks related to market volatility and operational challenges appear to be more pronounced.

Filing Documents

• sph-20250628.htm (10-Q) — 3258KB
• sph-ex31_1.htm (EX-31.1) — 14KB
• sph-ex31_2.htm (EX-31.2) — 14KB
• sph-ex32_1.htm (EX-32.1) — 9KB
• sph-ex32_2.htm (EX-32.2) — 9KB
• 0000950170-25-104656.txt ( ) — 12927KB
• sph-20250628.xsd (EX-101.SCH) — 1437KB
• sph-20250628_htm.xml (XML) — 2781KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 1 ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)

FINANCIAL STATEMENTS (UNAUDITED) 1 Condensed Consolidated Balance Sheets as of June 28, 2025 and September 28, 2024 1 Condensed Consolidated Statements of Operations for the three months ended June 28, 2025 and June 29, 2024 2 Condensed Consolidated Statements of Operations for the nine months ended June 28, 2025 and June 29, 2024 3 Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended June 28, 2025 and June 29, 2024 4 Condensed Consolidated Statements of Cash Flows for the nine months ended June 28, 2025 and June 29, 2024 5 Condensed Consolidated Statements of Partners' Capital for the three months ended June 28, 2025 and June 29, 2024 6 Condensed Consolidated Statements of Partners' Capital for the nine months ended June 28, 2025 and June 29, 2024 7 Notes to Condensed Consolidated Financial Statements 8 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 26 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 38 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 39

OTHER INFORMATION

PART II. OTHER INFORMATION 40 ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 40 ITEM 1A.

RISK FACTORS

RISK FACTORS 40 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 42 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 42 ITEM 4. MINE SAFETY DISCLOSURES 42 ITEM 5. OTHER INFORMATION 42 ITEM 6. EXHIBITS 43

SignaturEs

SignaturEs 44 Table of Contents DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements ("Forward-Looking Statements") as defined in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, relating to future business expectations and predictions, capital expenditures, strategic alternatives, project developments, and financial condition and results of operations of Suburban Propane Partners, L.P. (the "Partnership"). Some of these statements can be identified by the use of forward-looking terminology such as "prospects," "outlook," "believes," "estimates," "intends," "may," "will," "should," "could," "anticipates," "expects" or "plans" or the negative or other variation of these or similar words, or by discussion of trends and conditions, strategies or risks and uncertainties. These Forward-Looking Statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed or implied in such Forward-Looking Statements (statements contained in this Quarterly Report identifying such risks and uncertainties are referred to as "Cautionary Statements"). The risks and uncertainties that could impact the Partnership's results include, but are not limited to, the following: The impact of weather conditions on the demand for propane, renewable propane, fuel oil and other refined fuels, natural gas, renewable natural gas ("RNG") and electricity; The impact of climate change and potential climate change legislation on the Partnership and demand for propane, fuel oil and other refined fuels, natural gas, RNG and electricity; Volatility in the unit cost of propane, renewable propane, fuel oil and other refined fuels, natural gas, RNG and electricity, the impact of the Partnership's hedging and risk management activities, and the adverse

FINANCI AL INFORMATION

PART I. FINANCI AL INFORMATION

FINANCI AL STATEMENTS

ITEM 1. FINANCI AL STATEMENTS SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDA TED BALANCE SHEETS (in thousands) (unaudited) June 28, September 28, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 1,340 $ 3,219 Accounts receivable, less allowance for doubtful accounts of $ 6,307 and $ 4,707 , respectively 79,933 66,444 Inventories 60,419 55,430 Other current assets 33,512 32,451 Total current assets 175,204 157,544 Property, plant and equipment, net 689,478 653,985 Operating lease right-of-use assets 123,621 140,243 Goodwill 1,157,827 1,151,252 Other intangible assets, net 87,806 74,512 Other assets 80,666 95,225 Total assets $ 2,314,602 $ 2,272,761 LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Accounts payable $ 26,854 $ 41,058 Accrued employment and benefit costs 46,677 40,371 Customer deposits and advances 90,386 126,570 Operating lease liabilities 35,052 35,616 Other current liabilities 51,649 62,507 Total current liabilities 250,618 306,122 Long-term borrowings 1,225,343 1,210,326 Accrued insurance 45,192 45,560 Operating lease liabilities 87,616 103,797 Other liabilities 59,723 59,896 Total liabilities 1,668,492 1,725,701 Commitments and contingencies Partners' capital: Common Unitholders ( 65,420 and 64,072 units issued and outstanding at June 28, 2025 and September 28, 2024, respectively) 652,157 553,207 Accumulated other comprehensive loss ( 6,047 ) ( 6,147 ) Total partners' capital 646,110 547,060 Total liabilities and partners' capital $ 2,314,602 $ 2,272,761 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Table of Contents SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATED S TATEMENTS OF OPERATIONS (in thousands, except per unit a

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