Core Viewpoint - ARKO Corp. will host a conference call on August 6, 2025, to discuss its financial results for Q2 2025, which ended on June 30, 2025 [1][2]. Group 1: Conference Call Details - The conference call is scheduled for Wednesday, August 6, 2025, at 5:00 p.m. Eastern Time [2]. - A toll-free dial-in number is provided for participants: (877) 605-1792, with an international dial-in number of (201) 689-8728 [2]. - A telephonic replay will be available approximately three hours after the call concludes until September 5, 2025 [3]. Group 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 [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].

In the latest trading session, ARKO Corp. (ARKO) closed at $4.34, marking a +1.52% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 0.14% for the day. Meanwhile, the Dow lost 0.04%, and the Nasdaq, a tech-heavy index, added 0.38%. The stock of company has fallen by 3.06% in the past month, lagging the Consumer Staples sector's gain of 0.17% and the S&P 500's gain of 5.35%.The investment community will be closely monitoring the performance of ARKO Corp. in its forthcomin ...

Core Viewpoint - The article discusses the average brokerage recommendation (ABR) for ARKO Corp. and highlights the potential limitations of relying solely on brokerage recommendations for investment decisions [1][5]. Brokerage Recommendation Summary - ARKO currently has an average brokerage recommendation (ABR) of 2.00, indicating a Buy, based on recommendations from four brokerage firms, with two of those being Strong Buy, representing 50% of all recommendations [2]. - Despite the positive ABR, studies suggest that brokerage recommendations have limited success in guiding investors towards stocks with the best price increase potential [5][10]. Analyst Bias and Recommendations - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, with five "Strong Buy" recommendations for every "Strong Sell" recommendation, indicating a misalignment of interests between these firms and retail investors [6][7]. - The Zacks Rank, a proprietary stock rating tool, is presented as a more reliable indicator of stock price performance, categorizing stocks from Strong Buy to Strong Sell based on earnings estimate revisions [8][11]. Zacks Rank vs. ABR - The Zacks Rank is distinct from the ABR, as it is based on earnings estimate revisions and is displayed in whole numbers, while the ABR is calculated from brokerage recommendations and typically shown in decimals [9]. - The Zacks Rank is updated more frequently, reflecting timely changes in earnings estimates, which correlates strongly with near-term stock price movements [12]. Current Earnings Estimates for ARKO - The Zacks Consensus Estimate for ARKO's current year earnings remains unchanged at $0.08, suggesting that analysts have steady views on the company's earnings prospects [13]. - The unchanged consensus estimate has resulted in a Zacks Rank of 3 (Hold) for ARKO, indicating a cautious approach despite the Buy-equivalent ABR [14].

Company Performance - ARKO Corp. closed at $4.65, reflecting a +2.42% increase from the previous day, outperforming the S&P 500's daily gain of 0.61% [1] - The stock has decreased by 2.37% over the past month, underperforming the Consumer Staples sector's loss of 0.78% and the S&P 500's gain of 3.85% [1] Upcoming Earnings - Analysts expect ARKO Corp. to report earnings of $0.12 per share, indicating a year-over-year growth of 9.09% [2] - The Zacks Consensus Estimate for revenue is projected at $2.07 billion, which is a decrease of 13.12% compared to the previous year [2] Annual Forecast - For the entire year, the Zacks Consensus Estimates forecast earnings of $0.08 per share and revenue of $7.87 billion, representing declines of -38.46% and -9.84% respectively from the previous year [3] Analyst Estimates - Recent changes to analyst estimates for ARKO Corp. are important for investors, as positive revisions indicate optimism regarding the business and profitability [3][4] - The Zacks Rank system, which reflects these estimate changes, provides a rating system for actionable investment decisions [4] Zacks Rank and Valuation - ARKO Corp. currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining unchanged over the last 30 days [5] - The company is trading with a Forward P/E ratio of 56.75, which is significantly higher than the industry average Forward P/E of 18.56 [6] Industry Context - The Consumer Products - Staples industry, part of the Consumer Staples sector, holds a Zacks Industry Rank of 90, placing it in the top 37% of over 250 industries [6][7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on ARKO Corp. (ARKO), and emphasizes the importance of using these recommendations in conjunction with other research tools like the Zacks Rank to make informed investment decisions [1][5][10]. Group 1: Brokerage Recommendations - ARKO has an average brokerage recommendation (ABR) of 2.00, indicating a Buy, based on recommendations from four brokerage firms, with two of them being Strong Buy, representing 50% of the total recommendations [2]. - Despite the positive ABR, the article cautions against making investment decisions solely based on this metric, as studies show limited success of brokerage recommendations in predicting stock price increases [5][10]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, often issuing five "Strong Buy" recommendations for every "Strong Sell" [6][10]. Group 2: Zacks Rank vs. ABR - The Zacks Rank is presented as a more reliable indicator of a stock's near-term price performance, classifying stocks into five groups from Strong Buy to Strong Sell, based on earnings estimate revisions [8][11]. - Unlike the ABR, which is based solely on brokerage recommendations, the Zacks Rank is a quantitative model that reflects timely changes in earnings estimates, making it a more current indicator of future price movements [9][12]. - The Zacks Consensus Estimate for ARKO has remained unchanged at $0.08 over the past month, suggesting that analysts have steady views on the company's earnings prospects [13]. Group 3: Investment Outlook for ARKO - The recent consensus estimate changes and other related factors have resulted in a Zacks Rank 3 (Hold) for ARKO, indicating a cautious approach despite the Buy-equivalent ABR [14].

Core Insights - ARKO Corp. has opened its first food-focused remodeled store in Ashland, Virginia, featuring its new food brand, fas craves, aimed at enhancing the convenience store experience [1][4][6] Group 1: Store Launch and Concept - The Ashland location is part of a pilot program that includes eight sites, with six remodels and two new builds, focusing on a menu of hot and cold grab-n-go items [2] - The fas craves menu includes a variety of offerings such as crispy chicken biscuits, potato wedges, mozzarella sticks, and various beverages like nitro cold brew and frozen coffee [3] Group 2: Customer Experience and Design - The remodeled store features a customer-friendly layout, digital menu boards, and a contemporary design, all aimed at improving the shopping experience [4] - The store's product assortment is shaped by customer feedback, ensuring it meets the needs of today's on-the-go consumers [4] Group 3: Promotions and Future Plans - To celebrate the opening, special food deals are offered, including Ultimate Chicken Tenders and discounted drinks [5] - The fas craves brand will continue to expand alongside store remodels across ARKO's network, bringing new food options to a wider customer base [6]

Company Performance - ARKO Corp. shares decreased by 2.55% to $4.20, underperforming the S&P 500's daily loss of 0.03% [1] - Over the last month, the stock has declined by 13.97%, contrasting with the Consumer Staples sector's loss of 0.73% and the S&P 500's gain of 0.6% [1] Upcoming Earnings - The company is expected to report an EPS of $0.12, reflecting a 9.09% increase from the prior-year quarter [2] - Revenue is anticipated to be $2.08 billion, indicating a 12.82% decrease from the same quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, earnings are projected at $0.08 per share, down 38.46% from the previous year [3] - Revenue for the fiscal year is estimated at $7.97 billion, representing an 8.74% decline from the prior year [3] Analyst Estimates - Recent adjustments to analyst estimates for ARKO Corp. may indicate changing near-term business trends, with positive revisions suggesting a favorable outlook on business health and profitability [4] - The Zacks Rank system, which incorporates estimate changes, currently ranks ARKO Corp. at 3 (Hold) [6] Valuation Metrics - ARKO Corp. is trading at a Forward P/E ratio of 53.88, significantly higher than the industry average of 18.98, indicating a premium valuation [7] - The Consumer Products - Staples industry, part of the Consumer Staples sector, holds a Zacks Industry Rank of 169, placing it in the bottom 32% of over 250 industries [7]

Core Insights - ARKO Corp. has been recognized on the 2025 Fortune 500 list, ranking No. 488, marking its fourth consecutive year on the list, which highlights companies based on total revenue in the United States [1][2] Company Overview - ARKO Corp. is one of the largest convenience store operators and fuel wholesalers in the United States, owning 100% of GPM Investments, LLC [5] - The company operates approximately 3,600 locations as of March 31, 2025, having grown from 169 stores since its founding in 2003 [3] - The operational structure includes approximately 1,330 company-operated stores, over 1,960 independent dealer sites, and around 280 unmanned fleet fueling locations [3] Business Strategy - In 2024, the company initiated a multi-year transformation plan, converting 153 company-operated stores to dealer sites and investing strategically in high-growth areas such as food service and tobacco products [3] - The company emphasizes customer engagement and delivering value, aiming for long-term growth and optimization of its store portfolio [2]

Group 1: Earnings Performance - ARKO Corp. reported a quarterly loss of $0.12 per share, better than the Zacks Consensus Estimate of a loss of $0.17, but worse than a loss of $0.02 per share a year ago, indicating a 29.41% earnings surprise [1] - The company posted revenues of $1.83 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.06%, but down from $2.07 billion year-over-year [2] - Over the last four quarters, ARKO has surpassed consensus EPS estimates only once and topped consensus revenue estimates just once [2] Group 2: Stock Performance and Outlook - ARKO shares have declined approximately 37.6% since the beginning of the year, compared to a decline of 4.3% for the S&P 500 [3] - The company's earnings outlook is mixed, with current consensus EPS estimates at $0.12 on $2.09 billion in revenues for the coming quarter and $0.08 on $7.95 billion in revenues for the current fiscal year [7] - The Zacks Rank for ARKO is currently 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Group 3: Industry Context - The Consumer Products - Staples industry, to which ARKO belongs, is currently in the bottom 28% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact ARKO's stock performance [5]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $30.9 million, down from $33.2 million in the same period last year, primarily due to lower retail fuel and merchandise contributions [21] - The net loss for the quarter was $12.7 million compared to a net loss of $0.6 million in the year-ago period [24] - Total capital expenditures for the quarter were $27.4 million [25] Business Line Data and Key Metrics Changes - Retail segment operating income was approximately $40.2 million, down from $46.5 million in the year-ago period [21] - Same store merchandise sales excluding cigarettes were down 5.2%, while total same store merchandise sales were down 6.9% [22] - Wholesale segment operating income was $18.6 million, compared to $18.3 million in the year-ago period [23] - Fleet segment operating income increased to $11 million from $9.8 million in the year-ago period [24] Market Data and Key Metrics Changes - Same store fuel contribution decreased by approximately $3.2 million due to a 6.2% decline in gallons sold [22] - Fuel margin for the wholesale segment was $0.88 per gallon, down from $0.92 per gallon in the year-ago period [23] - Total gallons from channel optimization were approximately 14 million for the quarter, offsetting declines from comparable sites [23] Company Strategy and Development Direction - The company is focused on a transformation strategy that includes dealerization, expansion of high-margin categories, and targeted promotional initiatives [9][10] - The Fueling America Future campaign aims to provide discounts on fuel and enhance customer engagement [10][12] - The company is committed to organic growth and store-level reinvestment, with plans for remodels and new store openings [15][17] Management's Comments on Operating Environment and Future Outlook - Management noted headwinds from lower traffic, consumer spending, and severe weather impacting store visits [6][8] - There is optimism for Q2 2025, with slight improvements in sales observed in April [34] - The company remains focused on execution and is optimistic about the path forward despite a dynamic environment [28] Other Important Information - The company repurchased approximately 1.3 million shares at an average price of $4.1 per share during the quarter [19] - The company ended the quarter with $880 million in long-term debt and maintained liquidity of approximately $847 million [25] Q&A Session Summary Question: How has the business performed recently after winter weather? - Management noted that sales were down 6.9% for the quarter, with February being particularly impacted by severe weather, but there has been slight improvement in April [32][34] Question: Are savings from the dealerization starting to flow through the P&L? - The $20 million savings is expected at scale, with $2.4 million delivered this quarter from channel optimization [36][38] Question: When will the remodel initiative be accelerated? - The first pilot stores are expected to be completed by Q3 2025, with potential acceleration in 2026 based on results [40][42] Question: What is driving the fuel margins? - Fuel margins are influenced by market volatility and the need for businesses to adjust prices to remain competitive [48][50] Question: How is the company balancing share buybacks versus bond buybacks? - Management is analyzing capital allocation strategies but did not provide specific details on the cadence of buybacks [82] Question: What characteristics define strategic retail stores for capital allocation? - Strategic stores are identified based on favorable demographics, competitive landscape, and physical plant conditions [72][73] Question: How has the dealerization program performed against expectations? - The stores pushed to the wholesale channel are performing in line with expectations, with significant incremental gallons being realized [74][76]