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• Adjusted EBITDA: $78.8 million for Q3 2024, down from $87.3 million in Q3 2023.

• Retail Segment Operating Income: Approximately $71 million, down from $81.5 million in the previous year.

• Adjusted Operating Income: $85.1 million, compared to $96.5 million in the prior year.

• Total Retail Merchandise Sales: Down approximately 7.3% for the quarter.

• Merchandise Contribution: Down 4.2% with a margin rate expansion of 110 basis points.

• Total Retail Fuel Contribution: Down 3.4% with a 5.9% gallon decline, partially offset by a margin increase of 1 per gallon.

• Same Store Merchandise Sales (excluding cigarettes): Down 5.7% year-over-year.

• Same Store Transactions: Down high single digits for the quarter.

• Same Store Fuel Contribution: Down approximately 4.3% for the quarter.

• Same Store Fuel Gallon Demand: Down 6.6% for the quarter.

• Fuel Margin: 41.4 per gallon, up 1 per gallon from the previous year.

• Wholesale Segment Operating Income: $8.2 million, compared to $10 million in the prior year.

• Fleet Segment Operating Income: $10.8 million, up from $8.8 million in the previous year.

• General and Administrative Expense: $38.6 million, down from $44.1 million in the prior year.

• Net Income: $9.7 million, compared to $21.5 million in the previous year.

• Long Term Debt: $885 million at the end of Q3 2024.

• Liquidity: Approximately $869 million, including $292 million in cash on hand.

• Capital Expenditures: $29.3 million for the quarter.

• Q4 2024 Adjusted EBITDA Guidance: Expected range of $53 to $63 million.

• Full Year 2024 Adjusted EBITDA Guidance: Revised range of $245 to $255 million.

• Warning! GuruFocus has detected 5 Warning Sign with ARKO.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ARKO Corp (NASDAQ:ARKO) delivered adjusted EBITDA at the midpoint of their guidance by effectively managing operating expenses.

• The company saw a strong customer response to their expanded food service offerings, with same-store hotdog sales up more than 30% and non-franchised pizza sales increasing by 11.5%.

• ARKO Corp (NASDAQ:ARKO) successfully converted 51 retail stores to dealer sites, exceeding their target and expecting an annualized benefit of $8.5 million from these conversions.

• The company expanded their new-to-industry (NTI) pipeline with eight new stores, indicating a focus on long-term organic growth.

• ARKO Corp (NASDAQ:ARKO) maintained substantial liquidity with approximately $869 million, including $292 million in cash on hand at the end of the quarter.

Negative Points

• ARKO Corp (NASDAQ:ARKO) experienced a decrease in adjusted EBITDA to $78.8 million from $87.3 million in the previous year, primarily due to lower retail fuel and merchandise contributions.

• Total retail merchandise sales were down approximately 7.3% for the quarter, with same-store merchandise sales excluding cigarettes down 5.7%.

• Same-store fuel gallon demand declined by 6.6% for the quarter, reflecting continued external headwinds.

• The company faced persistent pressure on consumers due to inflation and increased prices for daily necessities, impacting consumer spending.

• ARKO Corp (NASDAQ:ARKO) reported a net income of $9.7 million for the quarter, down from $21.5 million in the previous year.