Ferrellgas Earnings Report: Warm Weather Trims Fiscal 2026 Sales

The news: Ferrellgas Partners, L.P. filed its annual report on Form 10-K on September 25 for the fiscal year ended July 31, 2026, together with its co-registrants. The propane distributor recorded net earnings attributable to the partnership of $71.7 million, compared with a net loss of $15.6 million in fiscal 2025. Total revenues were $1.864 billion, down from $1.938 billion.

By the numbers:

• Revenues: down $74.3 million, or 4%
• Propane sales volumes: down 3%, or 24.6 million gallons
• Adjusted EBITDA (non-GAAP): $321.3 million, versus $330.7 million
• Distributable cash flow attributable to equity investors: $179.1 million, versus $208.2 million
• Net cash from operating activities: $152.7 million, versus $136.3 million
• Cash reserves: $113.9 million, versus $144.1 million

Why it matters: The swing from loss to profit is mostly an accounting comparison. Fiscal 2025 included a $125.0 million legal settlement, which pushed general and administrative expense down by $134.2 million this year. Without that item the business was slightly weaker: Adjusted EBITDA fell 3% as operating expense rose $20.4 million, driven partly by about $22.0 million in higher legal costs tied to settling legacy general liability claims.

Weather explains the revenue decline. Ferrellgas said average temperatures were 3% warmer than normal and 11% warmer than fiscal 2025, with the western half of the country 16% warmer than normal. Retail gallons fell 2% and wholesale gallons 6%. Tank exchange sales fell $10.7 million, which the company tied to a softer grilling season, with heat advisories and rain over several holidays, even as tank exchange selling locations grew 4%.

The big picture: Margin work cushioned the volume decline. Retail gross margin rose $9.7 million, helped by technology and cost initiatives and the conversion of more than 6,100 Will Call locations to Auto Fill delivery. The financing side changed more sharply. In October 2025 the operating partnership issued $650.0 million of 9.250% senior notes due 2031 and redeemed its 5.375% notes due 2026, which added $19.2 million to interest expense on its unsecured notes. It also amended its credit agreement, which now provides a revolver of up to $350 million maturing in October 2028. The partnership paid a final $107.0 million distribution to Class B unitholders in March 2026, then converted the Class B units to Class A units on March 16.

What’s next: The next test is the winter heating season, from November through March, which the filing describes as the period when weather matters most to propane demand. The company reports that 93% of its open hedge positions will be realized into earnings in the next twelve months, with net mark-to-market losses of about $4.1 million on those hedges at July 31.