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Core Insights - ARKO Corp. has appointed Galagher Jeff as the new Executive Vice President and Chief Financial Officer, effective December 1, 2025, to support its growth and transformation plans [1][3]. Company Overview - ARKO Corp. is a Fortune 500 company and one of the largest convenience store operators and fuel wholesalers in the United States, owning 100% of GPM Investments, LLC [4]. - 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 [4]. Leadership Background - Galagher Jeff has a distinguished career as a CFO and finance executive, previously serving as CFO for Murphy USA, Inc., and holding senior finance roles at major retailers such as Dollar Tree, Advance Auto Parts, and Walmart [2][3]. - Jeff holds a Bachelor of Science in Electrical Engineering and two Master's degrees in Engineering and Business Administration from reputable institutions [2]. Strategic Vision - The appointment of Jeff is expected to enhance ARKO's leadership team as the company continues its multi-year transformation plan and focuses on organic growth initiatives [3]. - Jeff expressed optimism about the opportunities for ARKO as it executes its transformation plan and channel optimization work [3].

Core Insights - GPM Investments, LLC has signed a non-binding Memorandum of Understanding (MOU) with Apollo Power to explore solar energy solutions at gas station sites across the U.S. [1][2] - The partnership aims to evaluate the deployment of Apollo Power's flexible solar energy solutions at a minimum of 300 sites, with an estimated project value of approximately $53 million [2][3] - This collaboration marks Apollo Power's significant entry into the U.S. gas station market, leveraging ARKO Corp.'s extensive network of over 3,500 gas stations and convenience stores [3][4] Company Overview - ARKO Corp. is a Fortune 500 company that owns GPM Investments, LLC, and operates in the gas station and convenience store sector in the U.S. [6] - The company operates in four segments: retail, wholesale, fleet fueling, and GPM Petroleum, providing a wide range of products and services [6] Strategic Implications - The MOU is seen as a major milestone for Apollo Power, enhancing its position in the renewable energy sector and providing a strategic platform for further expansion in the U.S. market [4][5] - The technology offered by Apollo Power allows gas station operators to generate solar energy from rooftops that cannot support traditional solar panels, creating additional revenue streams [5]

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分组1 - ARKO Corp. reported quarterly earnings of $0.1 per share, missing the Zacks Consensus Estimate of $0.12 per share, but showing an increase from $0.07 per share a year ago, resulting in an earnings surprise of -16.67% [1] - The company posted revenues of $2.02 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.97%, but down from $2.28 billion year-over-year [2] - Over the last four quarters, ARKO has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] 分组2 - ARKO shares have declined approximately 32.9% since the beginning of the year, contrasting with the S&P 500's gain of 15.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $1.84 billion, and for the current fiscal year, it is $0.17 on revenues of $7.65 billion [7] - The Zacks Industry Rank for Consumer Products - Staples is currently in the bottom 18% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was $75.2 million, slightly above the midpoint of guidance, compared to $78.8 million in the same period last year, primarily due to softer retail performance [17][18] - Net income for the quarter was $13.5 million, an increase from $9.7 million in the year-ago period [20] - Total general and administrative expenses for the quarter were $40 million, up from $38.6 million year-over-year, driven by a $1.7 million increase in share-based compensation [20] Business Line Data and Key Metrics Changes - Retail segment operating income was approximately $77.5 million, down from $85.1 million year-over-year; same-store merchandise sales, excluding cigarettes, decreased by 0.9% [18] - Wholesale segment operating income increased to $24.1 million from $20.3 million in the prior year, with gallons up approximately 7.5% year-over-year [18][19] - Fleet fueling segment operating income was $12.2 million, slightly down from $12.6 million year-over-year, with total gallons down 1.6% [19] Market Data and Key Metrics Changes - Same-store sales, excluding cigarettes, were nearly flat, representing the best comp performance in the last 18 months [6] - Consumer sentiment data indicates that consumers are feeling stretched, leading to more deliberate shopping behavior and increased price sensitivity [5] Company Strategy and Development Direction - The company is focused on its transformation plan, particularly dealerization, which is expected to deliver a cumulative annualized operating income benefit of more than $20 million once fully scaled [8][9] - The Fueling America's Future campaign and Fast Rewards loyalty platform are central to deepening customer relationships and driving engagement [10] - The company plans to launch a new version of its app by the end of Q1 2026 to enhance customer engagement [11] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are pressures in certain markets, healthier trends are observed in the Northeast, Southeast, and Mid-Atlantic regions [5][6] - The company expects adjusted EBITDA for Q4 2025 to be in the range of $50 million to $60 million, with full-year adjusted EBITDA guidance updated to $233 million to $243 million [21][23] Other Important Information - The company repurchased approximately 935,000 shares in Q3 2025, reflecting confidence in its stock value [16] - The company ended Q3 with $911.6 million in long-term debt and maintained liquidity of approximately $890 million [20] Q&A Session Summary Question: Store remodels and food service opportunities - Management indicated that they are working on increasing the number of stores involved in the remodel program, with plans for an additional 20-25 stores following the initial seven [26] Question: Dealerization performance and same-store sales - Management highlighted that they are targeting stores that do not meet return on investment criteria and are focusing on regions with better performance metrics [29][30] Question: Capital expenditure allocation for projects - Management stated that they are measuring return on investment for each capital project and will focus on those that provide the best returns [41] Question: Mom-and-pop dealers' appetite for conversions - Management clarified that the majority of stores converted to dealers are not lower-margin properties but rather those that do not meet their investment criteria [42] Question: Gross margin sustainability - Management emphasized that margin increases are driven by vendor-supported promotions and believe that the improvements are sustainable moving forward [39]

Financial Performance - Net income for Q3 2025 was $13.5 million, up from $9.7 million in Q3 2024[7] - Adjusted EBITDA for Q3 2025 was $75.2 million, compared to $78.8 million in the same quarter last year[7] - Net income attributable to common shareholders for the three months ended September 30, 2025, was $12,009, compared to $8,228 for the same period in 2024, representing a growth of 46%[37] - Net income for the three months ended September 30, 2025, was $13,459,000, up 39.1% from $9,674,000 in the same period of 2024[39] - Operating income for the Retail Segment in Q3 2025 was $77,470,000, compared to $85,094,000 in Q3 2024, a decrease of 9.5%[48] - Operating income for the Wholesale Segment in Q3 2025 was $24,128,000, up from $20,294,000 in Q3 2024, an increase of 19.1%[49] - Operating income for Q3 2025 was $12,211,000, slightly down from $12,640,000 in Q3 2024, indicating a decrease of 3.4%[51] - Operating income for the nine months ended September 30, 2025, was $36,282,000, slightly up from $36,100,000 in the same period of 2024[51] Revenue and Sales - For the three months ended September 30, 2025, total revenues were $2,020,833, a decrease of 11.3% from $2,279,236 in the same period of 2024[37] - Total revenues for the Retail Segment in Q3 2025 were $1,148,847,000, down from $1,415,481,000 in Q3 2024, a decrease of 18.8%[48] - Total revenues for the Wholesale Segment in Q3 2025 were $739,687,000, compared to $727,397,000 in Q3 2024, an increase of 1.8%[49] - Total revenues for Q3 2025 were $124,932,000, a decrease of 2.6% from $128,268,000 in Q3 2024[51] - Total revenues for the nine months ended September 30, 2025, were $365,822,000, a decline of 9.7% compared to $405,270,000 for the same period in 2024[51] Margins and Costs - Merchandise margin increased to 33.7% in Q3 2025 from 32.8% in Q3 2024[7] - Retail fuel margin for Q3 2025 was 43.6 cents per gallon, an increase from 41.3 cents per gallon in Q3 2024[7] - Fuel revenue in the Retail Segment for Q3 2025 was $744,405,000, compared to $929,783,000 in Q3 2024, a decline of 20%[48] - Fuel costs in the Retail Segment for Q3 2025 were $640,278,000, down from $812,693,000 in Q3 2024, a decrease of 21.1%[48] - Fuel costs for Q3 2025 were $105,952,000, down from $109,752,000 in Q3 2024, reflecting a decrease of 2.5%[51] Assets and Liabilities - Total liquidity as of September 30, 2025, was approximately $891 million, with outstanding debt of approximately $912 million[18] - Total current assets increased to $753,154,000 from $722,208,000, representing a growth of 4.6%[38] - Long-term debt, current portion, increased to $36,994,000 from $12,944,000, indicating a significant rise of 186.5%[38] - Total liabilities decreased slightly to $3,213,858,000 from $3,243,792,000, a reduction of 0.9%[38] - Cash and cash equivalents rose to $306,932,000 from $261,758,000, marking an increase of 17.3%[38] - Inventory decreased to $202,290,000 from $231,225,000, a decline of 12.5%[38] - Shareholders' equity decreased to $273,126,000 from $276,866,000, a decrease of 1.4%[38] Dividends and Shareholder Actions - The board declared a quarterly dividend of $0.03 per share, payable on December 1, 2025[19] - Common stock repurchased amounted to $4,182,000 during the three months ended September 30, 2025[39] Operational Changes - The company converted 65 retail stores to dealer sites in Q3 2025, totaling 194 conversions year-to-date[7] - The company closed or divested 32 sites in the wholesale segment during the three months ended September 30, 2025[22] - The number of wholesale segment sites increased to 2,053 at the end of September 2025, up from 1,832 at the end of September 2024, reflecting a growth of 12%[22] - The fleet fueling segment had 288 sites at the end of September 2025, an increase from 281 sites at the end of September 2024, marking a growth of 2.5%[22] Cash Flow - Net cash provided by operating activities for the nine months ended September 30, 2025, was $148,009,000, compared to $199,130,000 for the same period in 2024, reflecting a decrease of 25.7%[39] - Net cash used in investing activities for the nine months ended September 30, 2025, was $93,725,000, compared to $80,935,000 in 2024, an increase of 15.7%[39] - Net cash used in financing activities for the period was $16,893,000, compared to $12,907,000 in the previous period, indicating an increase in cash outflow[40]

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]