Core Insights - ARKO is implementing a dealerization strategy to enhance profitability and streamline operations, targeting approximately 1,000 core stores while converting around 120 additional locations into the wholesale segment by leasing to independent dealers [2] - The company has a strong acquisition history, completing 26 acquisitions from 2013 to 2024, while maintaining a disciplined approach with a minimum return on invested capital of 25% over the past five years [3] - ARKO has generated approximately $1.5 billion in cumulative adjusted EBITDA since its Nasdaq listing in 2020, operating over 3,500 locations across more than 30 states [4] Retail Operations - The retail segment's gross profit is diversified, with 59% coming from inside sales and other income, supported by centralized procurement and a common loyalty program across various banners [1] - The company is focusing on foodservice initiatives, launching a new food brand "fas craves" and reporting a 14% increase in inside sales from a pilot remodel store [8] - In the tobacco sector, ARKO is shifting focus from declining cigarette sales to other tobacco products, achieving a 4% growth in these products in 2025 compared to 2024 [7] Wholesale and Fleet Fueling - ARKO's business mix is shifting, with expectations that by the end of 2025, 50% to 55% of EBITDA will come from wholesale and fleet fueling, following the recent IPO of ARKO Petroleum [9] - The wholesale model is primarily cost-plus and contract-based, with 86% of contracts supporting predictable cash flow [11] - ARKO Petroleum supplies fuel to 2,053 dealer locations and operates 288 cardlock locations, capturing approximately 1% of the U.S. gasoline and diesel market [12] Financial Performance - For full-year 2025, ARKO reported $249 million in adjusted EBITDA and a net income of $9.1 million, reflecting a 9.1% increase in net income [15] - Retail operating expenses decreased by 13.3%, while same-store sales remained flat, and Q4 adjusted EBITDA increased by 16% [15] - The company ended the year with $305 million in cash and access to $760 million in additional liquidity, totaling over $1 billion, positioning it for future investments and M&A opportunities [17]

One of the Largest Operators of Convenience Stores and Wholesale and Fleet Distributors in the U.S. A Fortune 500® Company Raymond James Investor Conference M A R C H 2 0 2 6 1 BODY TEXT 0, 0, 0 LIGHT GRAY 210, 210, 210 BLACK 0, 0, 0 WHITE 255, 255, 255 ACCENT 1 0, 63, 135 ACCENT 2 51, 122, 183 ACCENT 3 224, 40, 38 ACCENT 4 116, 116, 116 ACCENT 5 51, 51, 51 ACCENT 6 0, 0, 0 TITLES: Source Sans Pro Bold BODY: Source Sans Pro CASING: Title Case Safe Harbor Statement This document includes certain "forward-loo ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2025 grew 16% year-over-year to $66 million, reflecting strong operational execution [5][20] - Net income for Q4 2025 was $1.9 million, reversing a net loss of $2.3 million from the prior year [20] - For the full year 2025, net income was $22.7 million, compared to $20.8 million in 2024 [25] - Adjusted EBITDA for the full year 2025 was $248.7 million, flat compared to $248.9 million in 2024 [24] Business Line Data and Key Metrics Changes - Retail segment merchandising margin increased by 140 basis points to 34.4% in Q4 2025 [20] - Same-store merchandise sales were down 3% for Q4 and down 4.1% for the full year 2025 [20] - Retail fuel same-store gallons were down 4.1% for Q4 and down 5.4% for the full year 2025 [22][25] - Wholesale fuel contribution increased 8% to $24 million in Q4 2025 [23] - Fleet Fueling fuel contribution was $15.9 million for Q4 2025, compared to $16.3 million last year [24] Market Data and Key Metrics Changes - The company gained market share in every nicotine category in 2025, with OTP up 4% and energy drinks up 8% [15] - Same-store merchandise sales showed mid-single digit growth in January and February 2026, despite disruptions from winter storms [15] Company Strategy and Development Direction - The company is focused on executing its transformation plan, optimizing its retail footprint, and improving cost structure [5][6] - The IPO of ARKO Petroleum Corp. was a major milestone, providing greater transparency and unlocking value for shareholders [6][7] - The company aims to expand its wholesale and fleet fueling business, targeting significant growth opportunities in a fragmented industry [8][56] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers remain cautious and value-focused, impacting spending behavior [5][15] - The company expects 2026 Adjusted EBITDA to range between $245 million and $265 million, with same-store retail sales anticipated to improve [27] - Management emphasized the importance of disciplined capital deployment and analytics in driving growth [19] Other Important Information - The company finished 2025 with $305 million in cash, enhancing its liquidity and financial flexibility [26] - A new CFO, Galagher Jeff, was appointed, bringing extensive retail experience to the leadership team [16][18] Q&A Session Summary Question: Can you unpack the drivers of improvement in merchandise sales for retail? - Management highlighted execution, marketing initiatives, and loyalty programs as key drivers, with significant improvements in high-margin categories [32][33] Question: What is the cost of capital for remodels? - Major remodels cost approximately $1 million, while soft remodels could range from $400,000 to $700,000 [37][38] Question: Is the pressure in the Midwest still present? - Management confirmed ongoing pressure in the Midwest but noted improvements in other regions as fuel prices dropped [46][47] Question: Do the $3, $4, $5, $6 value meal deals drive merchandise margin expansion? - Promotions are supported by vendors and do not lower margins; they drive customer traffic and increase sales in higher-margin categories [49][50] Question: What are the M&A opportunities for APC now that it has a separate balance sheet? - The company has over $635 million available for acquisitions in a fragmented industry, targeting significant growth in fuel distribution [56][57]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2025 grew 16% year-over-year to $66 million, with net income of $1.9 million, reversing a net loss of $2.3 million from the prior year [5][20]. - Retail merchandising margin increased by 140 basis points to 34.4%, while same-store merchandise sales were down 3% for the quarter and down 4.1% for the fiscal year 2025 [5][20]. - Retail fuel same-store gallons were down 4.1% for Q4 and down 5.4% for the fiscal year 2025, but retail fuel margins improved to approximately $0.445 per gallon in Q4 [20][21]. Business Line Data and Key Metrics Changes - The wholesale segment saw an 8% increase in fuel contribution to $24 million in Q4, with wholesale gallons increasing by 4% to 249 million gallons [21][22]. - Fleet Fueling segment contributed $15.9 million for Q4, with gallons totaling 34.9 million, compared to 36.1 million gallons in the prior year [22][23]. - Adjusted EBITDA for the year was $248.7 million, flat compared to $248.9 million in 2024, indicating strong cost control despite volume headwinds [23][24]. Market Data and Key Metrics Changes - The company gained market share in every nicotine category in 2025, with OTP up 4% and energy drinks up 8% [15][32]. - The consumer remains cautious, with spending driven by value-focused promotions and convenience [15][46]. - Early 2026 trends show mid-single-digit growth in same-store merchandise sales, despite disruptions from winter storms [15][16]. Company Strategy and Development Direction - The company is focused on executing its transformation plan, optimizing its retail footprint, and improving cost structure [5][9]. - The IPO of ARKO Petroleum Corp. was a significant milestone, providing greater transparency and unlocking value for shareholders [6][8]. - The dealerization strategy is a key lever for transformation, with 409 conversions completed and additional sites committed [10][11]. Management's Comments on Operating Environment and Future Outlook - Management noted that the consumer is still cautious, but execution across various initiatives has led to improved performance [5][15]. - The company expects 2026 Adjusted EBITDA to range between $245 million and $265 million, with same-store retail sales anticipated to improve several hundred basis points versus 2025 [26][27]. - The balance sheet remains strong, with $305 million in cash and a disciplined approach to capital allocation [25][24]. Other Important Information - The company is targeting 20 new NTI cardlock locations in 2026, with expected mid to high teens returns [14][56]. - Leadership changes include Gallagher Jeff as the new CFO, bringing extensive retail experience [16][18]. Q&A Session Summary Question: Merchandise sales improvement drivers - Management highlighted execution and marketing initiatives, including the Fueling America campaign, which increased loyalty transactions and market share in key categories [30][32]. Question: Remodel costs and opportunities - The cost of a major remodel is approximately $1 million, while a soft remodel could cost between $400,000 and $700,000 [36][37]. Question: Retail base post-dealerization - Most stores retained post-dealerization require less capital investment, focusing on food service enhancements rather than full remodels [39][40]. Question: Consumer pressure in the Midwest - Pressure in the Midwest continues, but overall spending has eased as fuel prices dropped below $2.50 [45][47]. Question: Promotions impact on margins - Promotions are vendor-supported and do not lower margins, instead driving customer traffic and increasing sales in higher-margin categories [49][50].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

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]

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]

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]