The earnings of Travelcenters of America showed significant improvement in most categories for the second quarter in comparison to 2020’s second quarter, when truck stops were rapidly adjusting to wildly swinging changes in their business because of the pandemic.

The rate of growth at TA (NASDAQ: TA) in 2021 compared to 2020 generally landed in the 20% to 25% range. For example, diesel fuel sales measured in volume were 21.2% more than last year. Nonfuel revenues from stores and retail services were up 22.9%; truck services rose 20.6%. But restaurant sales, presumably boosted by more facilities open this year than last year, climbed 30%. Sales of diesel exhaust fluid, a business big enough to have its figures broken out in the company’s earnings report, climbed 33.7%.

Total nonfuel revenues rose 23.7%. The nonfuel gross margin of $303 million climbed 24.9% from $242.6 million last year. That was a key contributor in the company seeing its net income rise to $28.9 million from $2.15 million in last year’s second quarter.

TA made less money per gallon of fuel sold. The total gross margin per gallon for diesel and gasoline combined (diesel sales are about seven times those of gasoline at TA) slid to 17.2 cents, down from 19.3 cents per gallon last year. Fuel retailers tend to do better in a falling market, as retail prices generally are slower to react to falling wholesale prices, boosting retail margins, than on the way up. The average Department of Energy, Energy Information Administration (DOE/EIA) retail diesel price last year fell roughly 11 cents over the quarter; this year it rose 18 to 19 cents per gallon.

The 21.2% increase in diesel sales more specifically translated to 512.9 million gallons sold in 2021’s second quarter, up from 423 million gallons last year. That figure is roughly in line with the EIA’s estimate of total distillate product supplied, which rose about 21.5%. While the two product categories are not identical — the TA numbers would presumably be almost all ultra low sulfur diesel, while the EIA numbers might have some other higher sulfur diesel products in there — the numbers show that TA’s sales of diesel rose roughly in line with the increase in total diesel consumption.

TA has been involved in a reorganization over the past year with multiple goals. One was to trim the cost of selling, general and administrative (SG&A) expenses, which did make progress in the past year. SG&A for the second quarter was $36.59 million, down a relatively small amount from $38 million. But it happened on an increase in total revenue to $1.83 billion from $986 million for all revenues, and a jump to $501.8 million from $405.5 million in nonfuel revenues, resulting in SG&A declining as a percentage of revenues in both categories. 

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