Arko (ARKO) Q1 2025 Earnings Call May 08, 2025 05:00 PM ET Company Participants Jordan Mann - SVP - Corporate Strategy, Capital Markets & IRArie Kotler - Chairman, President & CEORobert Giammatteo - Executive VP & CFOBobby Griffin - Managing DirectorBenjamin Wood - VP - Equity ResearchKarru Martinson - Managing DirectorHale Holden - Managing Director Conference Call Participants Anthony Bonadio - AnalystDaniel Guglielmo - Equity Research Analyst Operator Afternoon, ladies and gentlemen, and welcome to the A ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $30.9 million, down from $33.2 million in Q1 2024, 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 decreased by 5.2%, while total same store merchandise sales were down 6.9% [22] - Wholesale segment operating income was $18.6 million, slightly up from $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 up, contributing close to 14 million gallons for the quarter [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 to remodel stores and introduce new food offerings [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted challenges from lower traffic, consumer spending, and severe weather impacting store visits [6][7] - Despite these challenges, management expressed optimism for Q2, citing improvements in sales as weather conditions normalize [34] - The company expects total adjusted EBITDA for Q2 2025 to be in the range of $70 million to $80 million [25] 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 loyalty program saw an increase in enrolled members, with approximately 27,000 new members added in Q1 2025 [17] Q&A Session Summary Question: Performance post-winter weather - Management indicated that sales improved slightly in April following severe weather in February, which had a significant negative impact on sales [34] Question: Dealerization savings impact - The $20 million annualized savings from dealerization will be realized at scale, with $2.4 million delivered this quarter from transitioned sites [38] Question: Remodel initiative timeline - The company plans to complete seven pilot remodels by Q3 2025, with potential for accelerated rollout based on results [40] Question: Fuel margins and price dynamics - Management noted that fuel margins are currently strong due to market volatility and competitive pricing strategies [45][49] Question: Capital allocation and buybacks - Management is analyzing the cadence of stock repurchases but did not provide specific guidance on future buybacks [50] Question: Dealerization pace and visibility - The company is on track with its dealerization plan, having closed 77 locations and having 130 under contract [56][58] Question: Loyalty program continuity post-dealerization - Loyalty members will continue to access benefits at other locations, as the program is tied to company-operated stores [76] Question: G&A expenses and dealerization impact - Management is focused on reducing G&A expenses as more retail sites transition to the wholesale channel [82]

Core Insights - ARKO Corp. reported a net loss of $12.7 million for Q1 2025, a significant increase from a net loss of $0.6 million in the same quarter last year, indicating challenges in the current consumer environment [6][5] - The company achieved an adjusted EBITDA of $30.9 million, down from $33.2 million year-over-year, reflecting ongoing macroeconomic pressures [6][5] - Merchandise margin improved to 33.2% from 32.5%, despite a decline in merchandise contribution to $117.6 million from $134.9 million, primarily due to the dealerization program [6][10] - Retail fuel margin increased to 37.9 cents per gallon, up from 36.4 cents per gallon, although retail fuel contribution decreased to $85.3 million from $92.9 million [6][11] Financial Performance - Total revenues for Q1 2025 were $1.83 billion, down from $2.07 billion in Q1 2024, driven by a decrease in fuel revenue to $1.45 billion from $1.63 billion [38] - Fuel gallons sold decreased to 225,063 thousand gallons from 255,464 thousand gallons, with same-store fuel gallons sold down 6.2% [8][11] - Merchandise revenue also declined to $354.5 million from $414.7 million, with same-store merchandise sales decreasing by 6.9% [8][10] Strategic Initiatives - The company converted 59 retail stores to dealer sites in Q1 2025, with plans for further conversions throughout the year, expecting a cumulative annualized operating income benefit exceeding $20 million [6][5] - ARKO initiated a store remodeling initiative aimed at enhancing customer experience, with the first pilot remodel expected to begin construction in May 2025 [6][5] - The company launched the "Fueling America's Future" campaign, offering loyalty customers value promotions and discounts at the pump [6][5] Shareholder Returns - The Board declared a quarterly dividend of $0.03 per share, to be paid on May 30, 2025, reflecting confidence in cash generation capabilities [21][22] - During Q1 2025, the company repurchased approximately 1.3 million shares for about $5.2 million, indicating a commitment to shareholder returns [7][22] Liquidity and Capital Expenditures - As of March 31, 2025, ARKO's total liquidity was approximately $847 million, with $265 million in cash and cash equivalents and $582 million available under lines of credit [20] - Capital expenditures for the quarter were approximately $27.4 million, including investments in new stores and upgrades [20]

Core Viewpoint - Murphy USA reported quarterly earnings of $2.63 per share, missing the Zacks Consensus Estimate of $3.87 per share, representing a -32.04% earnings surprise [1] - The company posted revenues of $4.53 billion for the quarter, missing the Zacks Consensus Estimate by 5.05% and down from $4.84 billion a year ago [2] Group 1: Earnings Performance - The earnings for the previous year were $3.12 per share, indicating a decline in earnings year-over-year [1] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Group 2: Revenue Performance - The company has not been able to beat consensus revenue estimates over the last four quarters [2] - The current consensus EPS estimate for the coming quarter is $7.39 on $5.42 billion in revenues, and for the current fiscal year, it is $25.61 on $20.77 billion in revenues [7] Group 3: Market Performance - Murphy USA shares have added about 0.2% since the beginning of the year, while the S&P 500 has declined by -4.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 4: Industry Outlook - The Retail - Convenience Stores industry is currently in the top 39% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Group 1 - The company has rolled out its strategic plan amidst a challenging economic climate, with steady activity but ongoing financial performance impacts due to transformation efforts [4][5][6] - Consolidated net sales for Q1 2025 amounted to €2.0 billion, reflecting a decline of -1.2% on a like-for-like basis and -5.0% as reported, influenced by a -1.1-point calendar effect and a -2.7-point effect from streamlining the convenience brand store network [5][6][8] - The convenience brands recorded net sales of €1.7 billion, down -0.7% on a like-for-like basis, showing an improvement compared to the previous quarter [9][10] Group 2 - The company closed 466 stores during Q1 2025, with 96% operated by franchisees or under business leases, while opening 31 new stores [11][14] - The adjusted EBITDA for Q1 2025 was €100 million, down -€6 million from Q1 2024, but would have increased by +€6 million excluding disynergies [23][25] - Free cash flow for Q1 2025 was -€81 million, an improvement of +€246 million compared to -€327 million in Q1 2024 [29][30] Group 3 - The company has accelerated the roll-out of new concepts across its brands, including the expansion of Franprix's "Oxygène" concept and Naturalia's "La Ferme" concept [7][15][16] - Cdiscount's overall like-for-like gross merchandise volume (GMV) increased by +2%, supported by a relaunch strategy initiated in Q3 2024 [20][21] - The company disposed of €111 million in real estate assets in Q1 2025, contributing to debt reduction efforts [35][42]

RICHMOND, Va., April 24, 2025 (GLOBE NEWSWIRE) -- ARKO Corp. (Nasdaq: ARKO) (the “Company”), a Fortune 500 company and one of the largest convenience store operators in the United States, today announced that the Company will host a conference call on Thursday, May 8, 2025 at 5:00 p.m. Eastern Time to discuss its financial results for the first quarter ended March 31, 2025. ARKO Corp.’s management team will host the conference call, followed by a question-and-answer period. The Company will provide its fina ...

Core Insights - Convenience stores (C-stores) are increasingly capturing market share from grocery and fast-food chains, leading to heightened investor interest in the net-lease market [1] - The convenience store industry is evolving to meet changing consumer needs, driven by smaller households, urban locations, and shifting food preferences [2] C-Store Product Mix Drives Growth - C-stores have transitioned from fuel and snack retailers to quick-service food and grocery alternatives, with prepared food sales rising by 12.2% year-over-year [3] - 56% of consumers now view C-stores as viable substitutes for fast-food chains, indicating a significant shift in consumer perception [3] - Despite narrow profit margins of around 5% to 7%, high product turnover and steady consumer visits make C-stores a reliable income source for investors [3] Changing Real Estate Needs - As C-stores expand food service offerings, their real estate needs are evolving, with chains investing in larger formats to accommodate food preparation areas [5] - Many operators are returning to urban centers and exploring non-traditional spaces, such as college campuses and downtown locations, creating new opportunities for real estate investors [5] Investment Opportunities for C-Stores - The sector is experiencing significant consolidation, with major players like 7-Eleven planning to open 500 new stores in the U.S. and Canada by 2027 [6] - Regional chains such as Wawa, Sheetz, and Buc-ee's are also expanding into new markets, providing opportunities for investors to acquire properties with stronger tenant profiles and predictable cash flows [6] Stability and Future of C-Stores - C-stores are characterized by convenient locations, long-term leases (up to 20 years), and low vacancy rates, making them a stable investment option in the net-lease market [7] - The ongoing transformation of C-stores, coupled with economic trends like inflation and rising grocery costs, positions them as a key asset class for investors [8] - A new generation of consumers focused on health, value, speed, and convenience further enhances the attractiveness of C-stores for investment [9]

Casey's General Stores, Inc. (NASDAQ:CASY) Q3 2025 Earnings Conference Call March 12, 2025 8:30 AM ET Company Participants Brian Johnson - SVP of IR and Business Development Darren Rebelez - Chairman, President and CEO Steve Bramlage - CFO Conference Call Participants Jacob Aiken-Phillips - Melius Research Anthony Bonadio - Wells Fargo Bonnie Herzog - Goldman Sachs Mike Montani - Evercore ISI Bobby Griffin - Raymond James Krisztina Katai - Deutsche Bank Kelly Bania - BMO Capital Markets Chuck Cerankosky - N ...