Core Insights - ARKO Corp. reported a net income of $13.5 million for Q3 2025, an increase from $9.7 million in the same quarter last year, indicating a positive trend in profitability [6] - The company is focused on executing its transformation plan, which includes advancing its dealerization program and improving operational efficiency despite a challenging consumer environment [4][6] - Adjusted EBITDA for the quarter was $75.2 million, slightly down from $78.8 million year-over-year, reflecting ongoing operational adjustments [6] Financial Performance - Total revenues for Q3 2025 were $2.02 billion, down from $2.28 billion in Q3 2024 [39] - Merchandise revenue decreased to $389.7 million from $469.6 million, while merchandise margin improved to 33.7% from 32.8% [6][39] - Fuel revenue was $1.6 billion, down from $1.78 billion, with a retail fuel margin of 43.6 cents per gallon, up from 41.3 cents per gallon [39] Operational Highlights - The company converted 65 retail stores to dealer sites in Q3 2025, totaling 194 conversions year-to-date, with expectations of over $20 million in annualized operating income benefits from channel optimization [6][9] - ARKO advanced its retail store remodeling pilot program, focusing on enhancing customer experience with improved layouts and food offerings [6] - The company opened new-to-industry locations, including a Dunkin' store and two additional stores, with plans for further expansions in 2026 [6] Capital Management - The Board declared a quarterly dividend of $0.03 per share, to be paid on December 1, 2025, reflecting confidence in cash generation capabilities [21] - The company repurchased approximately 0.9 million shares for $4.2 million during the quarter, with $7.2 million remaining under the share repurchase program [22][21] Liquidity and Debt - As of September 30, 2025, ARKO had total liquidity of approximately $891 million, consisting of $307 million in cash and $584 million in available credit [20] - Outstanding debt was approximately $912 million, resulting in net debt of about $605 million [20] Guidance - For Q4 2025, the company expects Adjusted EBITDA to range between $50 million and $60 million, with full-year 2025 Adjusted EBITDA guidance updated to between $233 million and $243 million [26]

Business Operations - As of September 30, 2025, ARKO Corp. operated 1,182 retail convenience stores and supplied fuel to 2,053 dealer locations[108] - The company completed 26 acquisitions from 2013 through September 30, 2025, including the acquisition of 21 SpeedyQ Markets in April 2024[120] - The company opened 3 new format stores in 2025, with plans for a region-wide rollout and additional openings in 2026[116] - ARKO Corp. plans to continue expanding its wholesale fuel distribution network, which is expected to yield greater profitability[111] - The wholesale segment saw an increase in the number of sites from 1,922 at the beginning of 2025 to 2,053 by September 30, 2025[117] Financial Performance - For the three months ended September 30, 2025, fuel revenue decreased by $183.9 million, or 10.3%, compared to the same period in 2024, primarily due to a decrease in average fuel prices and fewer gallons sold[135] - Merchandise revenue for the same period decreased by $79.9 million, or 17.0%, mainly due to closed or converted retail stores and decreased same-store revenues[136] - Total revenues for the three months ended September 30, 2025, were $2,020.8 million, down from $2,279.2 million in 2024, reflecting a decrease of approximately 11.3%[132] - Operating income for the three months ended September 30, 2025, was $35.9 million, compared to $41.6 million in the same period of 2024, a decrease of 13.5%[142] - For the nine months ended September 30, 2025, fuel revenue decreased by $686.3 million, or 12.9%, compared to the same period in 2024, attributed to lower average fuel prices and fewer gallons sold[146] - Merchandise revenue for the nine months ended September 30, 2025, decreased by $214.2 million, or 15.8%, primarily due to closed or converted retail stores[147] - Total operating expenses for the nine months ended September 30, 2025, decreased by $874.9 million, or 13.1%, with fuel costs down by $659.6 million, or 13.6%[149] - Net income attributable to ARKO Corp. for the three months ended September 30, 2025, was $13.5 million, compared to $9.7 million in 2024, an increase of 39.1%[144] - Adjusted EBITDA for the three months ended September 30, 2025, was $75.2 million, compared to $78.8 million in the same period of 2024, a decrease of 4.9%[145] - For the nine months ended September 30, 2025, net income attributable to the Company was $20.9 million, a decrease from $23.1 million in the same period of 2024[155] - Adjusted EBITDA for the nine months ended September 30, 2025, was $183.0 million, down from $192.0 million in 2024, reflecting a decline of 4.2%[156] Market Conditions - Inflation and higher interest rates have increased merchandise costs, affecting consumer purchasing power and potentially reducing sales volumes[125] - Retail fuel margins are significantly impacted by wholesale fuel costs, which can fluctuate due to various market factors[122] - The company operates in a highly competitive retail convenience market, facing competition from both chain and individual operators[126] - Same store fuel gallons sold decreased by 4.7%, or approximately 11.5 million gallons, reflecting a challenging macroeconomic environment[163] Cash Flow and Liquidity - As of September 30, 2025, the company had a strong liquidity position of approximately $891 million, consisting of $307 million in cash and cash equivalents[216] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $148.0 million, compared to $199.1 million for the same period in 2024[223] - Cash flows from operating activities were primarily impacted by higher tax payments and a decrease in Adjusted EBITDA[225] - For the nine months ended September 30, 2025, cash flows provided by operating activities were $148.0 million, a decrease of 25.7% compared to $199.1 million for the same period in 2024[225] Shareholder Activities - The company repurchased approximately 4.5 million shares of common stock for approximately $18.5 million during the nine months ended September 30, 2025[219] - The company declared dividends of $0.03 per share on common stock, totaling approximately $10.3 million for the three payments made in 2025[218] Debt and Financing - Approximately 51% of the company's debt bore interest at variable rates as of September 30, 2025, increasing interest rate risk[217] - The Capital One Line of Credit had approximately $380.8 million drawn as of September 30, 2025, with $418.7 million available for use[237] - The company had $450 million in 5.125% Senior Notes due 2029, which are guaranteed by certain wholly owned domestic subsidiaries[231] - Financing activities for the nine months ended September 30, 2025, included net proceeds of $18.7 million from long-term debt and $20.8 million for common stock repurchases[229] Operational Efficiency - Site operating expenses decreased by $76.0 million, or 12.6%, for the nine months ended September 30, 2025, primarily due to reduced expenses from closed or converted retail stores[175] - Fuel margin per gallon at proprietary cardlock locations increased to 48.9 cents in Q3 2025 from 46.1 cents in Q3 2024, driven by favorable diesel margins[192] - Total operating expenses for the nine months ended September 30, 2025, were $3,652,152 thousand, a decrease from $4,279,157 thousand in the same period of 2024[198]

Core Insights - Arko Corp. is expected to report a decline in revenues for Q3 2025, with estimates at $1.98 billion, reflecting a 13.1% decrease from the previous year [1][8] - The earnings consensus remains stable at 12 cents per share, indicating a significant growth of 71.4% year-over-year [1] - The company has experienced a trailing four-quarter negative earnings surprise averaging 42.1% [1] Revenue and Earnings Outlook - Arko is navigating a challenging environment characterized by macroeconomic pressures and changing consumer behavior, impacting same-store merchandise sales and retail fuel volumes [2] - The company anticipates adjusted EBITDA between $70 million and $80 million, down from $78.8 million in the same period last year [3][8] - Fuel margins have normalized, with retail fuel margins fluctuating between 42.5 and 44.5 cents per gallon [3] Sales Performance - Early signs of stabilization were noted in Q3, with July same-store sales (excluding cigarettes) showing slight year-over-year improvement, marking the best performance in nearly 18 months [4] - Both inside sales and fuel volumes are improving sequentially, suggesting that targeted promotions and loyalty initiatives are positively influencing sales [4] Earnings Prediction - The current model does not predict an earnings beat for Arko, with a Zacks Rank of 3 and an Earnings ESP of 0.00% [5]

Core Points - ARKO Corp. will host a conference call on November 5, 2025, at 5:00 p.m. Eastern Time to discuss its Q3 2025 financial results [1][2] - The management team will present the financial results followed by a Q&A session [2] - A press release with the financial results will be issued prior to the call [2] 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 [4] - The company operates in four reportable segments: retail, wholesale, fleet fueling, and GPM Petroleum [4] - The retail segment includes convenience stores selling merchandise and fuel products, while the wholesale segment supplies fuel to independent dealers [4]

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 Goulart's Restaurant Stocks specializes in the U.S. restaurant industry, covering various segments from quick-service to fine dining, and focuses on uncovering hidden value in public equities [1] - The analyst has a diverse background in finance and business management, holding an MBA in Controllership and Accounting Forensics, which supports the firm's analytical capabilities [1] Group 2 - The research includes sectors such as consumer discretionary, food & beverage, casinos & gaming, and IPOs, with a particular emphasis on micro and small-cap companies that are often overlooked [1] - The analyst's work has been featured on multiple financial platforms, enhancing the visibility and credibility of the research conducted [1]

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]