Group 1 - The US chain of convenience stores and gas stations is currently trading at approximately 12x EBITDA, indicating a potentially attractive valuation for investors [1] - The research firm focuses on the U.S. restaurant industry, covering various segments including quick-service, fast casual, fine dining, and niche concepts [1] - The firm employs advanced financial modeling and sector-specific KPIs to identify hidden value in public equities, particularly in micro and small-cap stocks often overlooked by mainstream analysts [1] Group 2 - The analyst has a strong academic background with an MBA in Controllership and Accounting Forensics, and a Bachelor's in Business Administration, enhancing the credibility of the research [1] - The research has been featured on multiple financial platforms, indicating a recognition of the firm's insights in the industry [1]

Core Viewpoint - ARKO Corp. has appointed Jordan Mann as Interim Chief Financial Officer, effective October 10, 2025, succeeding Robb Giammatteo [1][3] Company Overview - ARKO Corp. is a Fortune 500 company and one of the largest convenience store operators in the United States, owning 100% of GPM Investments, LLC [5] - The company operates in four reportable segments: retail, wholesale, fleet fueling, and GPM Petroleum [5] Leadership Transition - Jordan Mann has over a decade of experience in finance and capital markets, previously holding senior positions at Morgan Stanley and Credit Suisse [2] - Mann has been a key part of ARKO's leadership team, contributing to strategic initiatives and investor engagement [3] - Mann expressed commitment to supporting the company's strategic vision and long-term growth during this transition [3] Educational Background - Jordan Mann holds a Bachelor of Science in Economics from Duke University and a Juris Doctor from Harvard Law School [4]

Company Performance - ARKO Corp. closed at $4.83, reflecting a -3.78% change from the previous day, underperforming the S&P 500's gain of 0.49% [1] - Over the past month, ARKO shares have remained flat, contrasting with a 2.73% loss in the Consumer Staples sector and a 2.99% gain in the S&P 500 [1] Earnings Forecast - Analysts predict ARKO Corp. will report an EPS of $0.12, indicating a 71.43% growth year-over-year [2] - Revenue is expected to be $2.03 billion, representing an 11.05% decrease compared to the same quarter last year [2] Full Year Estimates - For the full year, earnings are projected at $0.17 per share, showing a +30.77% change from the previous year, while revenue is estimated at $7.74 billion, reflecting a -11.35% change [3] - Recent adjustments to analyst estimates for ARKO Corp. may indicate changing near-term business trends, with positive revisions suggesting a favorable business outlook [3] Zacks Rank and Valuation - ARKO Corp. currently holds a Zacks Rank of 1 (Strong Buy), with a historical average annual return of +25% for stocks rated 1 since 1988 [5] - The Forward P/E ratio for ARKO Corp. is 29.53, which is higher than the industry average of 22.16, indicating a premium valuation [6] Industry Context - The Consumer Products - Staples industry, to which ARKO belongs, has a Zacks Industry Rank of 174, placing it in the bottom 30% of over 250 industries [6] - The strength of industry groups is measured by the Zacks Industry Rank, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Company Performance - ARKO Corp. closed at $5.03, reflecting a -3.08% change from the previous day, which is less than the S&P 500's daily loss of 0.05% [1] - The stock has increased by 4.22% over the past month, outperforming the Consumer Staples sector's loss of 0.82% and the S&P 500's gain of 3.44% [1] Earnings Estimates - The upcoming EPS for ARKO Corp. is projected at $0.12, indicating a 71.43% increase compared to the same quarter last year [2] - Revenue is estimated at $2.03 billion, down 11.05% from the prior-year quarter [2] - For the annual period, earnings are anticipated at $0.17 per share and revenue at $7.74 billion, reflecting shifts of +30.77% and -11.35% respectively from the last year [3] Analyst Estimates and Rankings - Recent changes in analyst estimates for ARKO Corp. are important as they reflect short-term business trends [3] - The Zacks Rank system, which incorporates estimate changes, currently ranks ARKO Corp. as 1 (Strong Buy) [5] - The Zacks Consensus EPS estimate has remained steady over the past month [5] Valuation Metrics - ARKO Corp. has a Forward P/E ratio of 30.53, indicating a premium compared to its industry's Forward P/E of 21.11 [5] Industry Context - The Consumer Products - Staples industry, part of the Consumer Staples sector, has a Zacks Industry Rank of 166, placing it in the bottom 33% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [6]

Group 1 - ARKO Corp. shares have increased by 25.3% over the past four weeks, closing at $5, with a mean price target of $6.63 indicating a potential upside of 32.6% [1] - The mean estimate consists of four short-term price targets with a standard deviation of $2.21, where the lowest estimate is $4.50 (10% decline) and the highest is $9.00 (80% increase) [2] - Analysts show strong agreement on ARKO's ability to report better earnings, with a positive trend in earnings estimate revisions suggesting potential upside [4][11] Group 2 - The Zacks Consensus Estimate for ARKO's current year earnings has increased by 112.5% over the last 30 days, with no negative revisions [12] - ARKO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting the extent of gains, they can indicate the direction of price movement [14]

Core Viewpoint - ARKO Corp. announces the departure of CFO Robb Giammatteo, who will leave to pursue a new opportunity outside the convenience store sector, effective October 10, 2025 [1][2]. Company Overview - ARKO Corp. is a Fortune 500 company and one of the largest convenience store operators in the United States, owning 100% of GPM Investments, LLC [3]. - The company operates in four reportable segments: retail, wholesale, fleet fueling, and GPM Petroleum, providing a range of products including prepared foods, beverages, and fuel [3]. Leadership Transition - Chairman and CEO Arie Kotler acknowledges Giammatteo's contributions to the company's transformation plan and finance department [2]. - Giammatteo expresses pride in his achievements during his tenure and commitment to the company's future success [2].

Group 1 - ARKO Corp. (ARKO) closed at $5.01, with a 14.9% gain over the past four weeks, and a mean price target of $6.63 indicating a 32.3% upside potential [1] - The mean estimate includes four short-term price targets with a standard deviation of $2.21, where the lowest estimate is $4.50 (10.2% decline) and the highest is $9.00 (79.6% increase) [2] - Analysts show strong agreement on ARKO's ability to report better earnings, with a positive trend in earnings estimate revisions indicating potential upside [4][11] Group 2 - The Zacks Consensus Estimate for ARKO's current year has increased by 112.5%, with one estimate moving higher and no negative revisions [12] - ARKO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] - While the consensus price target may not be a reliable indicator of ARKO's potential gain, it does suggest a positive direction for price movement [14]

Core Insights - ARKO Corp. has opened its second fas craves location in Mechanicsville, Virginia, as part of its initiative to enhance customer experience through remodeled stores featuring a food-first concept [2][5] - The new store offers a menu of hot and cold grab-n-go items aimed at busy consumers, with a grand opening celebration planned from September 17–30, 2025 [3][6] Company Expansion - The Mechanicsville location opened on August 6, 2025, and follows the recent opening of a Handy Mart in Kinston, NC, on July 31, 2025, which also features the fas craves concept [6] - The fas craves menu includes items such as crispy chicken biscuits, zesty potato wedges, and various beverages, catering to diverse consumer preferences [4][6] Customer Engagement - To celebrate the opening, the store is offering exclusive food deals, including two crispy Ultimate Chicken Tenders and a small side of potato wedges for $4.99, and fountain drinks for 99 cents [6] - Customers can also participate in the Fueling America's Future promotion, which allows savings of up to $2 off per gallon of gas through the fas REWARDS loyalty program [7] Company Overview - ARKO Corp. is a Fortune 500 company and one of the largest convenience store operators in the U.S., owning 100% of GPM Investments, LLC [10] - The company operates in four segments: retail, wholesale, fleet fueling, and GPM Petroleum, providing a wide range of products including prepared foods, beverages, and fuel [10]

Group 1 - ARKO Corp. reported quarterly earnings of $0.16 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, and showing an increase from $0.11 per share a year ago, resulting in an earnings surprise of +33.33% [1] - The company posted revenues of $2 billion for the quarter ended June 2025, which was 3.08% below the Zacks Consensus Estimate and a decrease from $2.39 billion in the same quarter last year [2] - ARKO shares have declined approximately 38.4% year-to-date, contrasting with the S&P 500's gain of 7.1% [3] Group 2 - The earnings outlook for ARKO is mixed, with the current consensus EPS estimate for the upcoming quarter at $0.13 on revenues of $2.08 billion, and $0.08 on revenues of $7.87 billion for the current fiscal year [7] - The Zacks Industry Rank indicates that the Consumer Products - Staples sector is currently in the bottom 33% of over 250 Zacks industries, suggesting potential challenges for stocks in this category [8]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $76.9 million, down from $80.1 million in Q2 2024, primarily due to lower retail merchandise contribution [18] - Net income for the quarter increased to $20.1 million from $14.1 million year-over-year, driven by a non-cash gain related to the expiration of a purchase option [22] - Same store merchandise sales excluding cigarettes decreased by 3% year-over-year, while total same store merchandise sales were down 4.2% [19] Business Line Data and Key Metrics Changes - Retail segment operating income was approximately $80.4 million, down from $87.9 million in the prior year [18] - Wholesale segment operating income increased to $23.2 million from $21.3 million year-over-year, with gallons up 3.9% driven by the channel optimization program [20] - Fleet segment operating income was $13.1 million, slightly down from $13.7 million in the previous year, with total gallons down 6.8% [21] Market Data and Key Metrics Changes - National retail fuel volumes were down approximately 4% in Q2, reflecting a broader industry trend [16] - Same store fuel contribution decreased by approximately $800,000, with a 6.5% decline in gallons, offset by an increase in fuel margin to $0.45 per gallon [19] Company Strategy and Development Direction - The company is focused on a core transformation strategy, including advancing the dealerization program and investing in new store formats [7][9] - The dealerization program aims to convert select company-operated stores to dealer locations, with over 300 stores converted to date and an expected annualized operating income benefit of more than $20 million [8] - The introduction of new store formats aims to enhance customer experience and foodservice offerings, with the first new format store opened in June 2025 [10] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges from geopolitical events, inflation, and mixed consumer sentiment, but expressed optimism about improving trends in July [5][6] - The company expects total adjusted EBITDA for Q3 2025 to be in the range of $70 million to $80 million, with cautious expectations for same store sales performance [24][25] - Management emphasized the importance of customer engagement and loyalty programs in driving sales and improving margins [12][13] Other Important Information - The company repurchased 2.2 million shares in Q2 2025 as part of its disciplined capital allocation strategy [17] - Total capital expenditures for the quarter were $45.3 million, including the purchase of 22 fee properties [23] Q&A Session Summary Question: What is driving the notable change in July's performance? - Management noted improvements in July driven by strong promotions and customer engagement initiatives, particularly the Fueling America campaign [30] Question: Are more stores being identified for dealerization compared to six months ago? - Management confirmed that the pace of dealerization is consistent with expectations, with ongoing identification of additional stores [35][36] Question: What is the expected impact of the new store format on labor and complexity? - The new store format does not significantly increase square footage but adds food service capabilities, requiring minimal additional labor [78] Question: How are wages trending this summer compared to last summer? - Wages have trended up approximately 3%, consistent with inflationary pressures, but operating expenses have decreased due to reduced hours [47] Question: What constitutes success for the store conversions? - Success is measured by increased traffic and higher inside margins, particularly from food service offerings [87]