Yesway, the convenience store chain with a significant Iowa presence, is selling 29 stores in Iowa and Kansas as part of a strategic shift to focus on its core Southwestern markets. The move comes as the company reported its strongest quarter in history, prompting management to raise its full-year profit guidance.
The Des Moines-based company's adjusted EBITDA hit $70.9 million in the second quarter of 2026, a 35% increase year over year. The company credited record fuel gross profit and strong inside merchandise sales for the performance.
What does the Iowa store sale mean for Yesway?
Yesway has agreed to sell 29 stores in its Iowa and Kansas portfolio, with the deal expected to close by the end of 2026. The company says the divestiture will sharpen operational focus, simplify its supply chain footprint, and reinforce concentration in core operating markets.
The sale means Yesway is pulling back from Iowa, a state where it has deep roots, to double down on growth in Arizona, Texas, New Mexico, and Oklahoma. CEO Thomas Trkla called Arizona a natural extension of the company's Southwestern footprint and a key development priority.
For Iowa consumers, the transition will depend on who buys the stores. Yesway has not disclosed the buyer or whether the locations will continue operating under the Yesway brand.
How did Yesway perform in the second quarter?
The company reported record performance across several key metrics:
- Adjusted EBITDA: $70.9 million, up 35% year over year
- Fuel margin: 52.6 cents per gallon, up 27.4%
- Inside merchandise sales: $240.1 million, up 4.4%
- Net income: $29.7 million, up from $24.2 million
- Same-store fuel gallons: Up 1.4%
Excluding the Iowa and Kansas stores held for sale, same-store merchandise sales grew 1.5% and same-store fuel gallons grew 1.8%.
Why is Yesway raising its profit outlook?
Management raised full-year adjusted EBITDA guidance to $235 million to $245 million, up from a previous range of $210 million to $220 million. CFO Ericka Ayles said the increase reflects strong first-half performance and continued operating momentum.
The guidance assumes fuel margins moderate to the low 40-cent range per gallon in the second half of the year. July fuel margins remained elevated in the mid-40-cent range, with positive same-store fuel gallons and merchandise sales trending ahead of the second quarter.
What is driving Yesway's growth strategy?
Yesway is pursuing a dual growth strategy balancing new store construction with selective acquisitions. The company has built 92 stores since 2020 and expects to open 6 to 8 new stores in 2026. Management says it is confident it will exceed its target of 130 new store builds over the next five years.
The company's diesel strategy remains a key differentiator. Diesel now represents 38% of total fuel volume, compared to the industry average of 27%. CFO Ayles noted that professional fleet drivers spend more than three times as much inside the store as typical loyalty customers.
The company also highlighted its Allsup's burrito platform as a destination foodservice offering driving traffic. Management said it is rationalizing lower-velocity foodservice items to reduce complexity and improve consistency.
How is Yesway managing costs and debt?
Same-store operating expenses increased 4.8% year over year, with credit card fees accounting for 96% of the increase. Same-store labor hours declined 2.4%, marking the fifth consecutive quarter of reductions. The company said standardized training and technology allow certain locations to operate with a single employee during non-peak hours.
Yesway repaid $40 million of debt through June 30, 2026, including $10 million from initial public offering proceeds. Total debt stands at $618.4 million against cash of $81.6 million. The company has approximately $250 million in liquidity.
Management said it would consider temporary leverage increases up to 4.0 times EBITDA for large, accretive acquisitions, though current tuck-in deals could be funded with cash.
What risks does Yesway face?
CFO Ayles acknowledged that a sustained period of elevated fuel prices could pressure inside merchandise sales in the near term, though higher fuel margins would support growth investments. The company identified volatility in global oil prices and general economic conditions as ongoing risks.
Despite these challenges, management expressed confidence in the convenience store industry's resilience, noting it has proven durable through recessions, financial crises, and the COVID pandemic.
This article is based on Yesway's second quarter 2026 earnings call held August 13, 2026.
