ARKO

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 9 a.m. ET Investor Relations - Priya Trivedi Chairman, President and Chief Executive Officer - Arie Kotler Chief Financial Officer - Gallagher Jeff Operator: Greetings, and welcome to Arko Corp.'s second quarter 2026 earnings conference call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Priya Trivedi, Investor Relations. You may begin. Priya Trivedi: Thank you. Good morning, and welcome to Arko's second quarter 2026 earnings conference call and webcast. On today's call are Arie Kotler, Chairman, President and Chief Executive Officer, and Gallagher Jeff, Chief Financial Officer. Our earnings press release and quarterly report on Form 10-Q for the second quarter of 2026, as filed with the SEC, are available on Arko's website at www.arkocorp.com. During our call today, unless otherwise stated, management will compare results to the same period in 2025. Before we begin, please note that all second quarter 2026 financial information is unaudited. During this call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please review the forward-looking and cautionary statement section at the end of our second quarter 2026 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during today's call. All forward-looking statements made during this call reflect our current views with respect to future events, and Arko is under no obligation to update or revise forward-looking statements made on this call, whether as a result of new information, future events, or otherwise, except as required by law. On this call, management will share operating results on both a GAAP and non-GAAP basis. Descriptions of the non-GAAP financial measures that we use, such as adjusted EBITDA, and reconciliations of those measures to our results as reported in accordance with GAAP, are detailed in our earnings release or in the quarterly report on Form 10-Q for the quarter ended June 30, 2026. Additionally, management will share profit measures for our individual business segments along with fuel contribution, which is calculated as fuel revenue less fuel costs, and excludes intercompany charges by our GPMP segment. Now, I would like to turn the call over to Arie. Arie Kotler: Thank you, Priya, and thank you all for joining. Before we begin, I want to welcome Priya Trivedi, who recently joined us as our new head of investor relations. Many of you will have the opportunity to connect with Priya, and we are excited to have her on our team. Before turning to the detailed results of the quarter, I want to spend some time on yesterday's announcement by APC, our approximately 74% owned subsidiary, on signing an agreement to acquire the business of U.S. Petroleum Partners, or USPP. We believe this planned acquisition is not simply another acquisition. It is a strategic step that accelerates APC's growth plan, expands scale in attractive markets, and demonstrates the earning power we believe can be created from the APC platform. As a reminder, in February, we publicly offered a minority interest in our subsidiary, APC, to give investors a clearer view of the strength and value of our wholesale, Fleet Fueling, and GPMP businesses. At the time of the IPO, we outlined a clear strategy, compound stable fee-based earnings through disciplined, accretive acquisition while giving Arko shareholders direct participation in the value created by APC. The USPP transaction is exactly the type of opportunity we built APC to pursue. This deal demonstrates each of the key pillars of APC's investment thesis. It deepens supplier relationships, expands APC's stable fee-based business model, utilizes the financial flexibility created through the IPO, builds on a proven acquisition track record and accelerates APC's growth outlook. USPP is a sizable, vertically integrated fuel distribution platform and a highly strategic fit for APC. The pending acquisition is expected to add approximately 280 million gallons of annual fuel volume, increasing APC trailing 12-month gallons sold by approximately 14% by adding more than 400 dealer locations. Upon closing, the addition of the USPP business will not only meaningfully expand APC's scale and presence in the Great Lakes region, it will also add two fuel terminals on the Buckeye pipeline and a transportation fleet that currently handles more than 80% of USPP's distributed fuel volumes. By adding terminal and transportation capabilities, APC can participate in more of the refined product value chain, thereby potentially capturing incremental margin opportunities, strengthen last-mile logistics, and add another source of stable fee-based earnings. The consideration at closing will consist of $205 million in cash plus the cost of inventory. Additionally, at closing, APC will issue $30 million in Class A common stock to be held in escrow and be released to USPP, subject to the acquired business achieving certain EBITDA based financial targets in the first four fuel quarters after we close the transaction. This earn-out payment is subject to adjustment if the acquired business does not achieve $31.7 million EBITDA and $2.2 million EBITDA generated by certain fuel-related components. EBITDA is defined in the purchase agreement. Also, the earn-out may increase if the acquired business achieves results that are greater than these financial targets. We expect the transaction to close later this year, to be accretive upon closing, and to add approximately $30 million of annual adjusted EBITDA to APC and enhance its discretionary cash flow. This is a clear example of the strategic value creator APC, a growth vehicle with access to capital and attractive conversion of adjusted EBITDA to discretionary cash flow and a disciplined balance sheet supporting a dividend from which Arko Corp and our shareholders benefit. APC gives us a second public platform for value creation while allowing Arko to remain focused on transforming the retail business. Turning now to Arko's results, we operated against a challenging consumer backdrop, a highly volatile fuel pricing environment during the second quarter. Consumer sentiment reached historic lows while prolonged higher fuel prices placed additional pressure on our household budget and influenced purchasing behavior. The national average for gasoline prices climbed from $4.24 per gallon in April to nearly $4.61 per gallon in May, before finally easing to roughly $3.96 per gallon at quarter end. While trend held relatively steady throughout much of the quarter, the cumulative pressure showed up more visibly in June as retail demand softened. Trips to the pump actually increased as customers fueled up more frequently, but we saw pressure on both gallons sold and in-store spending. Despite these pressures, we closed out the first half of 2026 in a solid position with adjusted EBITDA up 14% to last year. As a reminder, when fuel prices rose rapidly earlier this year, we reacted quickly and disciplined pricing delivered an exceptionally strong first quarter with adjusted EBITDA up 65% year over year. We knew that as elevated prices persisted, a portion of that outsized fuel margin benefit would normalize. Through strong execution, we minimized the give back in the second quarter, delivering adjusted EBITDA of $72 million compared to $76.9 million in the prior year period. The year-over-year decline in the second quarter was largely driven by $3.3 million of increased credit card fees on a same-store basis associated with elevated fuel prices. Taken together, first half adjusted EBITDA was $123 million compared to $108 million last year, up a strong 14% year-over-year. The consumer environment tested the model, and our results showed the benefit of scale, disciplined pricing, and more diversified earning base. We remain focused on what we can control, delivering clear value, maintaining disciplined pricing, managing expenses, and executing initiatives that improve the long-term productivity and cash flow profile of the business. Now turning to the results by segments. In our retail business, trips to the pump increased 4% as customers fueled up more frequently. Though gallons sold remained under pressure and convenience store spending softened in June. Same-store merchandise sales excluding cigarettes declined a modest 0.9%. At the same time, disciplined category management, vendor supported promotions, market share gain in several key categories and dealerization program drove merchandise margin to 34.7%, an expansion of 110 basis points versus last year and delivered nearly flat merchandise margin dollars on a same-store basis. In a pressured consumer environment, maintaining nearly flat same-store merchandise sales, excluding cigarettes, while expanding margin by 110 basis points, is an important proof point for the quality of our retail execution. Fuel remained an important earning stabilizer during the quarter, and we continue to balance competitive pricing and customer value while maximizing fuel gross profit dollars. Same-store fuel contribution increased slightly compared to the prior year period, as an increase in same-store retail fuel cents per gallon margin driven by disciplined pricing and the benefit of our scale, more than offset lower same-store gallons. We remain committed to using targeted fuel offers to drive traffic, loyalty enrollment, and profitable in-store engagement while recognizing elevated fuel prices and associated credit card fees will continue to be a headwind. In wholesale, cents per gallon margin increased year over year, primarily reflecting higher prompt pay discount while gallons declined due to higher retail fuel prices, partially offset by retail sites converted to dealer locations through our dealerization program. Fleet Fueling operating income was relatively flat year over year as margin compressed this quarter and the prior year period had a higher than average margin. Our value proposition remains central to driving traffic and engagement in a pressured consumer environment. We believe we have the best fuel discount program in the country. Through Fueling America's Future, enrolled Fast Rewards members can earn stackable fuel discounts of up to $2.50 per gallon on as many as 20 gallons by purchasing qualifying items in our stores, which has saved our enrolled members more than $4 million since inception. This is not only a customer value program. It is a traffic, loyalty, and gross profit engine that string our relationship with high-value customers. The data reinforce why we are so focused on loyalty. In the second quarter, enrolled members' average monthly spend was more than 2x higher than non-enrolled members. Numbers of visits and average basket size were almost 50% higher versus non-enrolled members. These are not incremental differences. They represent a fundamentally more valuable customer relationship and a meaningful opportunity to grow repeat traffic, basket attachment and margin over time. In June, we introduced the 10-Cent Tuesdays, offering enrolled members a fuel discount on Tuesdays. Since launch, enrolled gallons sold on Tuesdays have grown double-digit, demonstrating strong engagement with the loyalty program and its compelling value proposition. We're also leveraging vendor-supported promotion with major vendors and consumer product partners, which delivered a further 6% in customer savings while protecting our merchandise margin. We took action in Q2 to win value-seeking customers, adding more than 100,000 new members, or 5% during the quarter. We will continue working with our supplier partners to help customers save on everyday purchases while driving profitable engagement for Arko. This engagement is already showing up in our financials. Enrolled sales growth and enrolled margins both increased 30 basis points in Q2 compared to Q1. With loyalty, our focus is increasingly on the quality of the engagement, active users, repeat visits, incremental basket attachments, gross profit contribution, vendor funding, and measurable return on promotional spend. Behind loyalty, we continue to invest in initiatives designed to modernize our retail offerings, improve customers' experience, and strengthen long-term store economics. During the quarter, we completed two remodels with 12 additional projects currently in progress and we expect a total of approximately 25 remodels in 2026. Because stores generally stay open during construction, temporary closure or portion of the sales floor creates a modest headwind to comparable same-store merchandise sales. Completed remodels generated double-digit merchandise sales and gallon growth versus the pre-remodel period, enforcing our confidence that targeted capital investment can unlock higher productivity from the existing store base. We also opened one new to industry retail store during the quarter. A remodeled and new to industry retail location incorporates our fas craves food and beverages offering, updated layout, and new technology and operating processes designed to improve store productivity. We are encouraged by the results we're seeing from the NTI open so far. While several are still in ramp-up stage, we're seeing returns approaching 20%, which gives us confidence as we look to accelerate the program in a disciplined way. To support the continued growth and modernization of the company's store and fueling footprint, we recently added to our real estate development team an accomplished vice president of real estate development with 30 years of industry experience. Our extensive track record in new store development, capital deployment and strategic growth will support the execution of the company's remodel, new to industry store, and new cardlock initiative. As planned, we continue to expand what is one of the largest cardlock platforms in the country. We have identified 20 new cardlock locations for opening in 2026, have opened three new locations thus far, and have the remaining 17 in various stages of development. We expect to continue adding to this segment because we like the low capital investment, attractive mid-to-high-end expected return per location, and recurring cash flow characteristics of this model. We now offer an enhanced food service offering in approximately 140 of our stores and expect to expand that to additional locations this year. We remain deliberate in our pace of expansion, prioritizing the regions and stores best positioned to maximize margin while incorporating learning along the way. Dealerization remains an important lever in Arko's transformation. During the second quarter, we converted 21 additional retail stores to dealer locations, bringing our total to 471 conversions since the program began in the middle of 2024. We also have approximately 70 additional stores committed under letter of intent, under contract or already converted since quarter end. Each conversion moves us further towards a lower cost, more capital efficient operating model with stronger cash flow characteristics. While the pace of conversion moderated this quarter, our expectation for the program remained unchanged. Stepping back, I want to reiterate again, we ended the first half of the year in a solid position with adjusted EBITDA up 14% to last year. Our execution through the first half gives us conviction in our full-year outlook. With that, I will turn the call over to Gallagher to review our second quarter results in greater detail. C. Jeff: Thank you, Arie, and good morning, everyone. As Arie noted, our second quarter results reflected softening in our retail business in June, while APC and disciplined fuel margin management continue to support overall profitability. Adjusted EBITDA was $72 million compared with $76.9 million in the prior year period. Net income was $9.4 million compared with $20.1 million in the prior year period. As a reminder, last year's second quarter included approximately a $21 million non-cash gain related to a sale leaseback. Despite the softer retail demand, we continue to generate healthy cash flow, manage expenses with discipline, and preserve flexibility to invest in our highest return priorities. Looking at our retail segment, same-store merchandising sales, excluding cigarettes, were slightly down 0.9% in the prior year period, while same-store merchandising sales overall were 1.7% below the prior year period. Cigarettes continued to decline as expected, but as Arie mentioned, we also saw consumer pressure impact our sales this quarter. We experienced pressure from lower SNAP EBT sales as certain states tightened eligibility rules around benefit purchases. While SNAP EBT accounts for less than 2% of our sales, lower EBT spend in the second quarter reduced same-store sales growth ex-cigarettes by approximately 75 basis points in the quarter, primarily across three states. We continue to focus on offering our customers value through our loyalty program, leveraging Fueling America's Future, 10-Cent off Tuesdays, and targeted in-store pricing with key partners to win on value while protecting our margins. Merchandising margin in the quarter increased 110 basis points versus Q2 2025 to 34.7%, with same-store merchandising margin also increasing to 34.7%, an expansion of 40 basis points, compared with 34.3% in the prior year period. This reflected our dealerization efforts, disciplined pricing, favorable product mix, and vendor-supported promotions. On retail fuel, same-store gallons were 5.7% below the prior year period, while same-store fuel cents per gallon margin increased 6.5% to $0.487 per gallon from $0.457. The same-store fuel contribution grew to $97.8 million. Turning to expenses, total retail site-level operating expenses were $160 million compared with $176.6 million for the prior year period. Same-store operating expenses were $156.5 million compared with $148.2 million in the prior year period, driven primarily by approximately $3.3 million of higher credit card fees associated with elevated fuel prices, along with slightly higher insurance, personnel costs and rent. On a consolidated basis, G&A expenses were $43.7 million compared to $40.7 million in the prior year period, primarily driven by increased stock-based compensation and normalized incentive compensation. We continue to manage our personnel expenses closely, reducing regular personnel expenses by $1.3 million versus the prior year period. Turning to our wholesale segment, operating income increased 7.1% to $24.9 million from $23.2 million in the prior year period. Wholesale gallons were 241 million compared with 252 million and fuel margin increased 8.7% to $0.109 per gallon from $0.101 in the prior year period. In our Fleet Fueling segment, operating income slightly increased 1.6% to $13.3 million from $13.1 million for the prior year period. Fleet Fueling gallons were 36.4 million, broadly unchanged from the 36.3 million in the prior year period, while fuel margin was $0.469 per gallon, compared with $0.49 in the prior year period, primarily due to higher than average fuel margins in the prior year, as well as margin compression during the second quarter of 2026, as index prices declined more quickly than our weighted average inventory cost. Cardlock location expansion remains one of our most attractive capital allocation opportunities, given its return profile, capital-efficient operating model, and recurring cash flow characteristics. Our balance sheet remains healthy and provides flexibility to invest in our strategic priorities. During the quarter, we repurchased $38 million of our 5.18% senior notes for $35 million of cash. Following this, we ended the quarter with $246 million of cash and cash equivalents and total liquidity of approximately $1 billion. Subsequent to the quarter end, we increased the size of our GPM credit line with PNC by $74 million, bringing the aggregate capacity across our PNC credit lines to $214 million. This liquidity positions us well to fund high-return organic projects, support APC's growth strategy, evaluate additional senior note repurchases, and pursue other value-creating opportunities while maintaining a disciplined capital allocation approach. We ended the quarter with $675 million of long-term debt, excluding lease-related financing liabilities, a decrease of $29 million versus Q1. Capital expenditures were $33 million in Q2 compared with $45 million in the prior year period. The majority of our capital spending in Q2 continued to be invested in growth initiatives, and our capital allocation framework remains consistent and returns focused. Our priorities are completing dealerization and capturing the associated cash flow benefits, investing in high-return remodels, retail NTIs, and new cardlocks, and growing food service. We also maintain balance sheet flexibility, which allows us to deliver our strategy in strategic acquisitions when they meet our discipline return thresholds, such as APC's planned acquisition of the business of USPP. We are focused on deploying capital only where we believe it can improve the durability, cash generation, and long-term value of the business. We are reaffirming our full year 2026 adjusted EBITDA guidance of $245 million to $265 million. Given the current operating environment, we are increasing our outlook for your retail fuel margin range between $0.455 to $0.475 per gallon, with higher margins expected to offset lower retail fuel volumes. Reaffirming guidance in this environment reflects our confidence in the earnings durability of the business and the controllable levers we are executing across retail-operated stores and APC. With that, I'll hand the call back to Arie for closing remarks. Arie Kotler: Thank you, Gallagher. We delivered a solid first half with adjusted EBITDA up 14% to last year. We maintained disciplined margin, continued to execute our transformation plan, and reaffirmed our full-year adjusted EBITDA outlook. Most importantly, the key pillars of our investment story are intact. APC is scaling as a public growth platform. Dealerization is improving the cash flow profile of the business. Loyalty is deepening customer engagement and our balance sheet gives us flexibility to pursue value creating opportunities. We're also excited about yesterday's announcement. The planned acquisition of the USPP's business, which we expect will add an annual adjusted EBITDA of approximately $30 million to APC, marks the next phase of growth for both Arko and for APC. We believe it is a clear demonstration of the value we can create through disciplined, accretive M&A as a public company. It adds scale, enhanced vertical integration, and reinforces why we believe APC can become an increasingly important value driver for Arko shareholders. Our focus remains on execution, capital discipline, and the areas within our control. We believe that through a combination of operational discipline, high return growth initiatives, and our more diversified earning platform, Arko is continuing to convert its large convenience and fuel network into a more resilient, higher cash flow business positioned to create meaningful long-term value for shareholders. Operator, please open the line for questions. Operator: Thank you. The floor is now open for questions. [Operator Instructions] Our first question today is coming from Bobby Griffin of Raymond James. Robert Griffin: Congrats on the deal announcement. I guess first for me, I wanted to understand a little bit more of the adjusted EBITDA guide. Is the deal in there? Because when I look at the second half, it implies down EBITDA year over year, but it seems like the fuel margin environment is healthy. You guys have made a little progress inside the store, and then you have that deal as well. So I'm just trying to understand what the puts and takes are assumed in an adjusted EBITDA guide for Arko consolidated for the rest of 2026. C. Jeff: Yes, thanks, Bobby. This is Gallagher. I'll take that one. When we did the guide, we had planned acquisitions, but we really did not know the size or the timing of the acquisitions, which was part of the reason we had the $20 million range. So based on the timing of close, we do expect some benefits this year, but we've not -- we feel that's captured in the $20 million guidance. So, you know, I think the fundamentals of the business are good and we feel good about delivering that and the timing, you know, of the close will help us for EBITDA, but it's not going to change our guide. Robert Griffin: Okay, Gallagher what's the back half pressure then? Like you look at forward first half, EBITDA is up year over year, as you guys talked about, and then the back half at the midpoint implied down. You know, what's the moving parts there? C. Jeff: Yes, it's primarily uncertainty, Bobby. And we've seen fuel volatility. We've seen customer volatility. We're executing our programs. We're doing our part to drive customers into the stores, both for fuel and for merchandising and APC is delivering. We're just very uncertain now going forward. And month to month, it seems to change. So we didn't want to, you know, give too much confidence in some certain environment other than that we will deliver what we can. Robert Griffin: Okay, fair enough. I guess also I want to ask on the fleet card segment, the down year over year margins, and I'm not as familiar in the weeds of this business versus traditional retail, admittedly, but like, what was the pressure point, especially in the third party locations? You know, like industry margins, it seems from peers, at least at retail are really good in Q2. You know, what happened with the third-party locations being down pretty big year over year? C. Jeff: I'll take that one. So what happens in the fleet fueling with the card locks is many of our deals are OPIS Plus pricing. So it's a fixed price when we sell the fuel. So in a falling environment, we end up paying more and lose margin in that situation because the price of the customer is fixed in OPIS Plus, whereas our purchase price, you know, it could be days or a week before it was higher. So in a falling environment that pressures those margins. Robert Griffin: Okay. And then Arie, on the deal and adding on the significant amount of gallons, I thought the conversation about some of the other capabilities that are going to be brought to the Arko enterprise as well as APC obviously were interesting. How do you think that helps back into the retail network? Is there synergy opportunities as we look at FY '27 and FY '28 from these additional gallons and capabilities of sourcing that could offer some fuel benefits back into your retail ownership? Arie Kotler: Well, I think the biggest one, Bobby, is economy of scale. If you think about that, this is a huge opportunity for us, not only from a gallon standpoint, also from a relationship with the major oil companies. The USPP business brings 280 million gallons. We are currently selling 2 billion gallons. So as you can imagine, you know, efficiency and, you know, better cost of goods when you add another 280 million gallons, which is an extra 14% increase to the current gallons in an environment where everybody's trying to capture gallons. I believe that would be an opportunity for us. Robert Griffin: Is there a time where your fuel contracts come up and they're up for renegotiation at a certain time? I agree with you on the economy of scale aspect, but I want to get ahead of ourselves on when that could actually play out. Arie Kotler: Bobby, we always negotiate fuel supply contracts. This is not just about timing. Every time you grow, you go back. And remember, we have great relationship for many, many years with the fuel suppliers, that's one thing. The second thing is don't forget, we are bringing right now also some throughput opportunities for some of those major oil companies. Given that we have more than 50% available terminal capacity in this market, and we have a lot of business in this market in Great Lakes, that's just another meaningful opportunity for us to enhance basically our business. And I just want to remind you that we keep talking about retail, retail, but at the end of the day, APC and basically the retail should complement itself. At the end of the day, you know, the better capabilities you actually bring through the business that we are acquiring right now, that should provide additional cost of goods or better cost of goods, you know, for the overall margin across retail and across, of course, the wholesale business. Operator: The next question is coming from Daniel Guglielmo of Capital One. Please go ahead. Daniel Guglielmo: You've talked about the retail store investment with fas craves and the F&B offering. As that's had more time to develop, can you give us a sense of any learnings that you've had there? Are there certain F&B offerings that you've had that you've had to develop? can you give us a sense of any learnings that you've had there? Are there certain F&B products that are performing better than others, anything additional would be helpful. Arie Kotler: Daniel, that's a good question. And as you can imagine, you know, we started with a menu and we continue to reaffirm our menu. I'll call it, you know, day over day, month over month. I think what you see in the results when we're talking about increasing results and increasing margin to 34.7%, it's clearly basically the additional food service offering that we actually add here. There is no question that food service, you know, push the margin with all of the additional high margin items over here. So I can't point you to like a specific items, but I can just tell you that we, on a regular basis, we're trying to improve our menu. Don't forget right now with the customers pressure that we see in the marketplace right now, it's not only the menu, it's also basically the value. I'll give an example. This morning, loyal members can basically purchase a chicken sandwich plus a Coca-Cola drink and wedges for $5. I don't think you have any kind of offering like this, you know, in the country today. So, I mean, the goal is not only the menu. The goal is also the value creation that we actually bring to customers, especially now when there is so much pressure out there. C. Jeff: Just to add on that Arie, Daniel, we're still in a very test and learn phase as we roll out food. But one thing we're very happy with is the customer response. We've seen double-digit growth in all those stores, both for merchandising sales and in fuel gallons when we remodel. So we're very happy with that. One thing we continue to work on is the operations as well, as Arie mentioned make sure the menu is right, make sure our cost model supports that sales growth that we're seeing. So we will go faster. This year is really about testing and learning from the menu, and right now the customer response is really strong. Daniel Guglielmo: And then you had mentioned, you know, some retail customer wallets kind of being stretched volumes down a little bit. And so just you guys are like a national brand now, right? Lots of different states. As kind of we've progressed, are you seeing any kind of softness in particular areas or is it kind of a broad-based? Arie Kotler: Yes, I think it's a broad base, it's a broad base. It's not one particular area versus the other. But I think that's again, that's our goal or basically what we are trying to do over here given our size is to make sure that we're providing value to our customers. I mentioned Fueling America just for your benefit and everybody's benefit, Daniel, is that Fueling America, since we started, provides $4 million savings to our customers. And you know that the number one item that is very expensive and probably, basically puts a lot of pressures on every household is fuel spending right now. We have over 70 different offerings inside the store that are attached to Fueling America. I mean, you can get up to $2.50 saving basically with those offerings. And you can stack that. And you're talking about a $50 basically discount for purchasing fuel. And those are the things that we need to do. And in some areas, of course, where some areas that are more low income, I mean, we probably see people taking more advantage. In addition to that, the 10-Cent Tuesday, for example, as we mentioned, since we launched that, we doubled our gallons over there. So we just need to do all of those things in order to help our consumers, you know, to go through this, you know, time that everybody's under pressure. And hopefully when price of fuel will come back to normal, you know, I believe we're going to see the trend coming back to normal. Operator: The next question is coming from William Reuter of Bank of America. William Reuter: I just have two. The first, there was a little bit of a deceleration of the dealerization program this quarter. I guess, is there anything that, that speaks to? And can you remind us the target of where you ultimately hope to get to in terms of the number of company operated in our own stores? Arie Kotler: Sure, so there is no deceleration you know remember when we started almost two years ago in August 2024 when we started we have a large group of stores that we had to dealerize its up until now we dealerize 471 stores so the amount of stores that we have under letter of intent right now, purchase agreement or in process are a much smaller amount. We're talking about 70 locations right now. So, you know, like I said, when we started with a large amount of stores, it was just a large portion of them that just turned on a quarterly basis. We're basically getting right now to a smaller amount of stores. We have, like I said, around 70 left. Some of them already closed during the queue, so it's just a matter of how many stores are out there. We never put a target, but like I said, I think that right now with those 70 stores, we're going to reach close to a little bit over 500 stores that we're going to dealerize. William Reuter: Got it. And then the second question for me, I believe this is the first time you've repurchased the 5 1/8% notes in the open market. I guess, you mentioned in your capital allocation portion of the prepared remarks that this is something you'll continue to evaluate. How are you thinking about those additional repurchases over the next couple of quarters versus other uses of capital? C. Jeff: I'll take that one. So thank you. And good question, William. We are very return focused in our allocation of capital. There's really two uses. One is growth, which primarily is the new stores, the remodels and the card locks. The other one is opportunistically looking at things like the bonds. And when we're able to get a discount on the bonds, it makes a lot of sense to retire those when we can. So we are working to actively manage our balance sheet to ensure that it just helps drive our growth. And we will continue to look at that. So we're taking advantage of growth opportunities and buy down bonds when we can, but we actually want to maintain enough flexibility to keep our strategy executing. Arie Kotler: I would like just to jump in William and as Gallagher mentioned, you know, we are very, very opportunistic on one end. On the other end, you know, as we basically bought those bonds, we were able to basically to receive an increase in our line of credit from PNC. We just increased that, you know, a few days ago. So we just want to make sure that on one end we maintain liquidity, but on the other end we continue to be opportunistic when it comes to our capital and to the return on investment on the things that we're doing over here. William Reuter: Got it. I guess maybe it's just one quick follow-up on that. Does it make sense for there to be high-yield bonds in your capital structure going forward, or do you feel like using your line of credit is kind of the way that the company will finance itself in the future? Arie Kotler: Listen, when we raised the bonds five years ago, interest rate was close to zero. We raised the bonds at the 5.18%. And if you think about it today, basically you can get those rates today. So I think it's a very attractive rate. And we like it. So, you know, it's part of the capital structure. It's been part of the capital structure for the past five years. And, you know, we actually think that this is, this is just something that, you know, very attractive for us from basically from a pricing standpoint. Operator: The next question is coming from Karru Martinson of Jefferies. Karru Martinson: When you talk about June retail demand softening, as gas prices have come down, have you seen that rebound? And kind of how is the consumer handling the kind of the up and down that we've been seeing on gas prices? Arie Kotler: Sure. So, you know, this is a very, very volatile year. Very, very volatile year. You know, we saw, I'm going back to January just to remind everybody, January was a very, very good month from an inside sales standpoint and gallons. Then everybody got hit with the weather during February. And then the war started and we start to see some pressure probably in April, going into May. June was probably the softest month since everything started, but we start to see some bounce back in July. Okay. Who knows where price of fuel is going next week. But at least as we see price of fuel easing a little bit at the end of basically the quarter, we start to see some relief, you know, at the beginning or at the month of July so far. But again, it's too early to tell. Who knows where price of fuel will be tomorrow. The one thing I can tell you, when price of fuel goes above $4, the consumer gets more pressure. And that's why Fueling America and all of those promo with 10-Cent Tuesday, all of those things are so important basically for our customers and for us. And you see it, you see it through the margin. I mean, we lost only 0.9% on sales excluding cigarettes, but we were able to actually capture margin and increase margin by 110 basis points, which explained to you that the consumers are coming more frequently to buy gas, they're coming inside the stores, our loyal members taking advantage of those promotions. And at the end of the day, if you think about it, I mean, we actually finished our gross margin basically, our gross profit on inside sales was actually flat. Karru Martinson: And then looking at the U.S. Petroleum Partners, just not being familiar as much with the fuel supply and distribution platforms that are out there, I mean, are there other platforms of this scale that you could be looking at? What are the opportunities in that? Or do you feel that you have the scale now necessary? Arie Kotler: Sure, sure. So first of all, it's a very good question. And I know I say a lot over the call, but I would like maybe to reiterate something and, you know, make it very, very clear. I know I'm very, very excited about this opportunity. This is a very, very important opportunity for APC. That's the first large deal that we're doing after IPO. We've been telling the market about that. And remember, APC become a very, very, very important component of basically of Arko. So maybe I can just walk you through and walk everybody through maybe the biggest highlight of this deal of USPP. I mean, this deal is, you know, highly complimentary to our business model. I mean, not only that we're adding over here fee-based and fixed margin earning, earning to our profile over here. I mean, this business has very low working capital requirements. This business basically adds additional 280 million gallons basically to the Arko APC business. The business have more than 50% available terminal capacity, which is very, very meaningful, given our relationship with the major oil companies. If you think about that, when we buy fuel, we buy fuel and we pull the fuel from different terminals. So that's become an opportunity for us to actually bring our customers, APC volumes through our own terminal right now. It's also going to expand APC's participation across the fuel value chain. And it's going to provide basically margin expansion. It's also going to provide some logistic and storage opportunities for the overall business that we have out here. So again, the bottom line, the bottom line from all of those things that I said, and I say it a lot, is that this deal create a huge share on order actually value over here. Its very accretive to adjust the EBITDA. As I mentioned, we're expecting $30 million on annual adjusted EBITDA increase and that's going to help our discretionary cash flow. It's going to support our dividend capacity and longer basically shareholder return. It's going to maintain the balance sheet very, very flexible. And as I mentioned earlier, after this deal is set and done, we're talking about being between 3x to 3.5x net debt to adjusted EBITDA. So we have plenty of availability to support additional growth. And I think the bottom line, I mean, this deal is going to enhance cash flow generation through basically additional fee-based earnings streams that will support basically our shareholders. In terms of opportunities, just to finish, in terms of opportunities, like I said, this is only the beginning. We have over $700 million of liquidity. We are using $205 million of this liquidity right now in order to increase EBITDA by almost 20%. And that's going to be a big driver for us. And there are plenty opportunities out there. Operator: Our final question today is coming from Ian Zaffino of Oppenheimer. Ian Zaffino: I know you talked about the consumer environment and what you're doing as it relates to the consumer environment, but what does the competitive landscape look like in this environment? I know you mentioned some of the initiatives you're taking to attract customers, but what are you also kind of doing as far as maybe countering what some of the competitors are doing? Or maybe just kind of talk about the competitive environment in general. Arie Kotler: Sure. So as you know, Ian, you know, OPIS reported, I believe last quarter, minus 5.8% or 5.5%, but it's in the high fives. And everybody is actually feeling the pressure. You know, this is a pressure across the country when it's come to fuel. And everybody is basically looking for ways to basically to get gallons. Everybody's struggling. Everybody's trying to get gallons even though gallons are down dramatically. Fueling America, like I said, I think it's the only promotion in the country. And, again, I'm very certain about that. I don't believe any competitor is providing $2.50 off with 70 different offering inside the store. Everybody's trying, you know, you asked me about the competitors, everybody trying to come up with, you know, we came up with 10-Cent Tuesday, some other competitors coming up with, 10-Cent maybe Monday or Tuesday or Wednesday or whatever, but I think that none of them actually have such a big offering when it's come to basically to fuel. And then again, we're just going to continue to tweak it. We're going to continue to be competitive. We're going to come up with, continue to come up with food offering and a special value meal to basically to ease our consumers. Everybody's trying to do that. I just don't believe anyone in the country is providing up to $2.50 off and up to 20 gallons which is equal to $50, I don't believe anyone is doing that. Ian Zaffino: Okay, thanks. And then, you know, as far as APC, how are you just looking at that in general? You know, I know you have still a very large stake. Is this something that you think you'll continue to keep at these levels? Is it something that you might use as a source of funds? How do we kind of think about that holding there? Arie Kotler: Yes, so it's a good question. So as Gallagher mentioned earlier, you know, the company is very liquid. If you're looking on Arko on a consolidated level, we're talking about a $1 billion in liquidity. The cost of capital at APC is very, very attractive. Cost of capital today, it's around 6.75%. So, you know, our goal is going to continue to grow, basically pursue acquisition very, very similar to this complimentary acquisition that we just announced yesterday that I'm very excited about that. If you think about it, we are increasing, we are expecting to increase the EBITDA of APC by around 20%. We are going to increase gallons by approximately 14%. So as long as we can continue to grow and pursue attractive opportunities with our very attractive cost of capital, we're going to continue to do so. There is really no reason for us to issue equity or to sell equity at that level and make sure that our current shareholders at APC and at Arko will enjoy the benefit of what we created or are going to create over here. Operator: Thank you. At this time, I'd like to turn the floor back over to Mr. Kotler for closing comments. Arie Kotler: Thank you very much, Donna, and thank you again for joining us today. You enjoy your summer and we look forward to update you on our progress next quarter. Have a great day everybody and a great weekend. Operator: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day. Before you buy stock in Arko, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arko wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Arko. The Motley Fool has a disclosure policy. Arko (ARKO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

ARKO Corp. ARKO entered its Q2 2026 call with a split message: retail demand softened as elevated fuel prices pressured consumers, but management kept full-year adjusted EBITDA guidance intact and raised its retail fuel-margin outlook. The planned U.S. Petroleum Partners acquisition also dominated the discussion, giving ARKO Petroleum Corp. a larger fee-based platform while management leaned on margins, dealerization and loyalty to navigate softer retail demand. Chairman, president and chief executive officer Arie Kotler said first-half adjusted EBITDA rose 14% to $123 million, supporting confidence in the full-year outlook despite weaker retail demand in June. Chief financial officer Gallagher Jeff reaffirmed 2026 adjusted EBITDA guidance of $245 million to $265 million. ARKO also raised its expected average annual retail fuel margin to 45.5 cents to 47.5 cents per gallon, with higher margins expected to offset lower volumes. Revenues of $2.35 billion topped the Zacks Consensus Estimate of $1.99 billion, while EPS of $0.04 missed the consensus estimate of $0.15. ARKO Corp. price-consensus-eps-surprise-chart | ARKO Corp. Quote Kotler said sustained higher fuel prices pressured household budgets and reduced gallons sold and in-store spending. Same-store merchandise sales excluding cigarettes fell 0.9%, while same-store fuel gallons declined 5.7%. Merchandise margin still expanded 110 basis points to 34.7%. Same-store fuel margin increased to 48.7 cents per gallon from 45.7 cents, allowing same-store fuel contribution to edge higher. In Q&A, a Jefferies analyst asked whether demand improved as fuel prices eased. Kotler said July showed some rebound after June, while emphasizing continued fuel-price and consumer volatility. Kotler described the pending USPP transaction as a strategic step for ARKO Petroleum. The deal is expected to add roughly 280 million gallons of annual volume, more than 400 dealer locations and about $30 million of annualized adjusted EBITDA. The transaction also brings two fuel terminals and transportation capabilities. Kotler said the added scale should strengthen supplier economics, expand participation across the fuel value chain and create more fee-based earnings opportunities. A Raymond James analyst asked about benefits to ARKO's broader network. Kotler said greater purchasing scale and terminal throughput should support better fuel economics across retail and wholesale operations. Kotler said loyalty remains central to ARKO's response to consumer pressure. Fueling America's Future has delivered more than $4 million in fuel savings, while the company added more than 100,000 loyalty members during the quarter. Management also highlighted remodels and food service. Completed remodels generated double-digit merchandise sales and gallon growth versus pre-remodel levels, and Kotler said returns on recently opened new-to-industry stores were approaching 20%. Dealerization continued with 21 retail stores converted during Q2, bringing the total to 471. In Q&A, Kotler said about 70 additional locations were committed or in process, putting the program on track to exceed 500 conversions. Gallagher Jeff said ARKO remains focused on remodels, new stores, cardlocks and food service. The company also repurchased about $37.9 million of senior-note principal during the quarter at a discount. ARKO ended June with approximately $1.0 billion of liquidity, including about $246 million of cash and cash equivalents. After quarter-end, it increased PNC credit-line capacity by $74 million. A BofA Securities analyst asked how debt repurchases compete with other uses of capital. Jeff said ARKO will balance opportunistic debt retirement with growth investments while preserving financial flexibility. Management's posture centered on protecting margins, improving retail productivity and using APC as a separate growth platform. Kotler continued to frame dealerization and loyalty as tools for producing a more capital-efficient business. Jeff was cautious about the second half. In response to a Raymond James question, he said fuel and customer volatility created enough uncertainty that management did not raise guidance despite first-half adjusted EBITDA growth. ARKO carries a Zacks Rank #3 (Hold). Its Value, Momentum and VGM Score is A each, while its Growth Score is C. Under the Zacks framework, A is the strongest Style Score grade, and VGM combines value, growth and momentum characteristics. Zacks emphasizes that Style Scores work best alongside Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks, while Rank #3 stocks can still be held under the framework. ARKO's scores show stronger value and momentum attributes than growth, but the Zacks Rank can change as estimates are revised after the just-reported results. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ARKO Corp. (ARKO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

ARKO Corp. (ARKO) came out with quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.15 per share. This compares to earnings of $0.16 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -73.33%. A quarter ago, it was expected that this company would post a loss of $0.16 per share when it actually produced a loss of $0.07, delivering a surprise of +56.25%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. ARKO, which belongs to the Zacks Consumer Products - Staples industry, posted revenues of $2.35 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 18.15%. This compares to year-ago revenues of $2 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. ARKO shares have added about 60.6% since the beginning of the year versus the S&P 500's gain of 12.6%. While ARKO has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for ARKO was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.14 on $1.97 billion in revenues for the coming quarter and $0.29 on $7.51 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consumer Products - Staples is currently in the bottom 16% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. BBB Foods (TBBB), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This discount retailer is expected to post quarterly loss of $0.18 per share in its upcoming report, which represents a year-over-year change of -38.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. BBB Foods' revenues are expected to be $1.42 billion, up 47.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ARKO Corp. (ARKO) : Free Stock Analysis Report BBB Foods Inc. (TBBB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in ARKO Corp.? Here are five stocks we like better. Second-quarter profitability softened as elevated gasoline prices pressured fuel volumes and in-store spending: Adjusted EBITDA fell to $72 million from $76.9 million, while net income declined to $9.4 million. However, first-half Adjusted EBITDA rose 14% to $123 million, helped by stronger fuel and merchandise margins. ARKO continued advancing growth and cost initiatives, adding more than 100,000 loyalty members, converting 21 stores to dealer locations and expanding its food-service and remodel programs. Wholesale operating income increased 7.1%, while retail fuel margins rose 6.5% despite a 5.7% decline in same-store gallons. ARKO reaffirmed 2026 Adjusted EBITDA guidance of $245 million to $265 million and raised its retail fuel-margin outlook. Its APC subsidiary also plans to acquire USPP later in 2026 for $205 million in cash plus inventory costs, a deal expected to add about 280 million annual gallons and approximately $30 million in annual Adjusted EBITDA. ARKO (NASDAQ:ARKO) reported second-quarter results that reflected softer retail demand in June amid elevated gasoline prices and pressure on consumer spending, while management said disciplined fuel pricing, wholesale performance and growth initiatives supported profitability. Adjusted EBITDA totaled $72 million in the second quarter, down from $76.9 million a year earlier. Net income was $9.4 million, compared with $20.1 million in the prior-year period, which included an approximately $21 million non-cash gain related to a sale-leaseback transaction. For the first half of 2026, Adjusted EBITDA increased 14% to $123 million from $108 million a year earlier. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Chairman, President and Chief Executive Officer Arie Kotler said the company faced a challenging consumer environment as national average gasoline prices climbed from $4.24 per gallon in April to nearly $4.61 in May before easing to roughly $3.96 at quarter-end. While trips to the pump increased, ARKO saw pressure on fuel volumes and in-store spending, particularly in June. Same-store merchandise sales excluding cigarettes declined 0.9% in the quarter, while total same-store merchandise sales fell 1.7%. Chief Financial Officer Galagher Jeff said lower spending through SNAP/EBT programs reduced same-store sales growth excluding cigarettes by about 75 basis points, primarily across three states. SNAP/EBT represented less than 2% of company sales, he said. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Despite the sales pressure, ARKO’s merchandise margin increased 110 basis points to 34.7%. Same-store merchandise margin rose 40 basis points to 34.7%, supported by dealerization efforts, pricing discipline, product mix and vendor-funded promotions. Kotler said the company delivered nearly flat same-store merchandise margin dollars despite the softer demand environment. Retail fuel same-store gallons declined 5.7%, but same-store fuel margin increased 6.5% to 48.7 cents per gallon from 45.7 cents per gallon a year earlier. Same-store fuel contribution rose to $97.8 million. Management said higher fuel margins more than offset lower gallon volumes, though higher gasoline prices also raised credit card fees. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Same-store operating expenses increased to $156.5 million from $148.2 million, mainly due to approximately $3.3 million in higher credit card fees tied to elevated fuel prices, along with somewhat higher insurance, personnel and rent costs. Consolidated general and administrative expense rose to $43.7 million from $40.7 million, largely because of stock-based and normalized incentive compensation. Regular personnel expense declined by $1.3 million from the prior year. Kotler said ARKO is using its loyalty programs and targeted promotions to attract value-oriented consumers. Under the company’s Fueling America’s Future program, fas REWARDS members can earn stackable fuel discounts of up to $2.50 per gallon on up to 20 gallons through qualifying in-store purchases. The program has saved enrolled members more than $4 million since inception, according to the company. ARKO added more than 100,000 loyalty members during the quarter, a 5% increase. Enrolled members spent more than twice as much per month as non-enrolled customers, while their visits and average basket sizes were nearly 50% higher, Kotler said. The company’s 10-cent Tuesdays promotion, launched in June, contributed to double-digit growth in enrolled gallons sold on Tuesdays. The company completed two store remodels during the quarter and had 12 more projects underway, with approximately 25 remodels planned for 2026. Completed remodels produced double-digit growth in merchandise sales and gallons compared with pre-remodel periods, management said. ARKO also opened one new-to-industry retail store, with several newer stores generating returns approaching 20% while still in their ramp-up periods. ARKO has expanded its fas craves food and beverage offering to about 140 stores and expects to add more locations this year. Kotler said food service has helped lift margins, while management continues to test menu options, pricing and operating models. Dealerization remained a central part of the company’s cost-transformation strategy. ARKO converted 21 retail stores to dealer locations in the second quarter, bringing total conversions to 471 since the program began in mid-2024. About 70 additional stores were under letters of intent, contract or in process following the quarter. Kotler said the company expects to dealerize slightly more than 500 locations, though it has not set a formal target. Wholesale operating income rose 7.1% to $24.9 million. Wholesale gallons declined to 241 million from 252 million, while fuel margin increased 8.7% to 10.9 cents per gallon. Management attributed the margin increase primarily to higher prompt-pay discounts. Fleet fueling operating income increased 1.6% to $13.3 million, while gallons were essentially flat at 36.4 million. Fleet fuel margin declined to 46.9 cents per gallon from 49 cents per gallon. Jeff said margins were affected by a declining fuel-price environment because certain customer contracts are priced at a fixed amount relative to OPIS pricing while inventory costs can lag. ARKO has identified 20 new cardlock locations to open during 2026 and has opened three so far. Management said the business offers low capital requirements, expected mid- to high-teens returns per location and recurring cash flow. ARKO also highlighted the planned acquisition by its approximately 74%-owned subsidiary, APC, of the business of U.S. Petroleum Partners, or USPP. The transaction is expected to add approximately 280 million gallons of annual fuel volume, more than 400 dealer locations, two terminals on the Buckeye Pipeline and a transportation fleet that handles more than 80% of USPP’s distributed fuel volumes. Consideration at closing is expected to include $205 million in cash plus inventory costs. APC also plans to issue $30 million in Class A common stock into escrow, subject to EBITDA-based performance targets during the first four fuel quarters after closing. The deal is expected to close later in 2026 and add approximately $30 million of annual Adjusted EBITDA to APC. Kotler said the acquisition would increase APC’s trailing 12-month gallons sold by about 14%, enhance its position in the Great Lakes region and provide additional terminal, transportation, storage and logistics capabilities. He also said the greater scale could strengthen supplier relationships and potentially improve fuel costs across ARKO’s retail and wholesale operations. ARKO reaffirmed full-year 2026 Adjusted EBITDA guidance of $245 million to $265 million. The company increased its outlook for full-year retail fuel margin to a range of 45.5 cents to 47.5 cents per gallon, saying higher margins are expected to offset lower retail fuel volumes. During the quarter, ARKO repurchased $38 million principal amount of its 5.125% senior notes for $35 million in cash. The company ended the quarter with $246 million in cash and cash equivalents, approximately $1 billion of total liquidity and $675 million of long-term debt excluding lease-related financing liabilities. Subsequent to quarter-end, ARKO increased aggregate capacity under its PNC credit lines by $74 million to $214 million. ARKO Corp (NASDAQ: ARKO) is a downstream energy and convenience retail company based in Matthews, North Carolina. The company's core operations encompass fuel supply, distribution and retailing through a network of terminals, independent dealer locations and company-operated convenience stores. ARKO's fuel offerings include branded and unbranded gasoline and diesel, as well as lubricants and other petroleum products marketed under various regional and private labels. In its retail segment, ARKO operates a portfolio of convenience stores under the Kangaroo Express banner, serving on-site customers with fuel, grab-and-go food items, beverages and everyday household essentials. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "ARKO Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Adjusted EBITDA: $72 million in Q2 2026, compared to $76.9 million in the prior year period. Net Income: $9.4 million, compared to $20.1 million in the prior year period (which included an approximately $21 million non-cash gain related to a sale leaseback). Same-Store Merchandise Sales (ex-cigarettes): Declined 0.9% year-over-year. Merchandise Margin: Expanded 110 basis points to 34.7%. Same-Store Fuel Gallons: Declined 5.7% year-over-year. Same-Store Fuel Cents Per Gallon Margin: Increased 6.5% to $0.487 per gallon from $0.457. Same-Store Fuel Contribution: Grew to $97.8 million. Retail Site Level Operating Expenses: Totaled $160 million, down from $176.6 million in the prior year period. Wholesale Segment Operating Income: Increased 7.1% to $24.9 million, with gallons of $241 million and fuel margin of $0.109 per gallon. Fleet Fueling Segment Operating Income: Slightly increased 1.6% to $13.3 million, with gallons of $36.4 million and fuel margin of $0.469 per gallon. Capital Expenditures: $33 million in Q2, compared to $45 million in the prior year period. Long-Term Debt: $675 million, a decrease of $29 million versus Q1. Cash and Cash Equivalents: $246 million at quarter end. Full-Year 2026 Adjusted EBITDA Guidance: Reaffirmed at $245 million to $265 million. Warning! GuruFocus has detected 7 Warning Signs with ARKO. Is ARKO fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ARKO Corp (NASDAQ:ARKO) announced a strategic acquisition of US Petroleum Partners (USPP) by its subsidiary APC, expected to add approximately 280 million gallons of annual fuel volume and $30 million in annual adjusted EBITDA, enhancing scale and vertical integration. First half 2026 adjusted EBITDA increased 14% year-over-year, demonstrating strong execution despite a challenging consumer environment and volatile fuel prices. Merchandise margin expanded by 110 basis points to 34.7% in Q2, driven by disciplined category management, vendor-supported promotions, and the dealerization program, helping offset softer sales. Loyalty program engagement is strong, with enrolled members spending more than two times more than non-members, and the new $0.10 Tuesdays offering drove double-digit growth in gallons sold on Tuesdays. The company repurchased $38 million of its senior notes at a discount, reducing debt and improving balance sheet flexibility, while maintaining total liquidity of approximately $1 billion. Dealerization program continues to progress, with 471 stores converted since inception and approximately 70 additional stores committed, moving the company toward a lower-cost, more capital-efficient model. Second quarter adjusted EBITDA declined to $72 million from $76.9 million in the prior year, impacted by increased credit card fees of $3.3 million due to elevated fuel prices. Same-store gallons sold decreased 5.7% year-over-year, reflecting softer consumer demand and higher fuel prices, which pressured retail volumes. Same-store merchandise sales, excluding cigarettes, declined 0.9%, and overall same-store merchandise sales were down 1.7%, with June showing notable softening. Fleet fueling segment experienced margin compression, with fuel margin per gallon down to $0.469 from $0.49 in the prior year, due to falling index prices and higher-than-average prior-year margins. The company faces ongoing headwinds from elevated fuel prices, which are expected to continue pressuring consumer spending and credit card fees, creating uncertainty for the back half of 2026. SNAP EBT sales declined due to tightened eligibility rules in certain states, negatively impacting same-store sales growth by approximately 75 basis points in the quarter. Q: Can you provide more details on the US Petroleum Partners (USPP) acquisition, including its strategic rationale and expected financial impact?A: Arie Kotler, Chairman, President and CEO, and Galagher Jeff, CFO, detailed that the USPP acquisition is a strategic step for APC, adding approximately 280 million gallons of annual fuel volume (a 14% increase), over 400 dealer locations, two fuel terminals on the Buckeye pipeline, and a transportation fleet. The deal is expected to be accretive upon closing, adding approximately $30 million of annual adjusted EBITDA to APC. The consideration includes $205 million in cash plus inventory costs, and $30 million in Class A common stock held in escrow, subject to EBITDA-based targets. This acquisition expands APC's scale in the Great Lakes region, adds vertical integration capabilities, and demonstrates the value creation potential of the APC platform. Q: What are the key assumptions and moving parts behind the reaffirmed full-year 2026 adjusted EBITDA guidance, especially given the softer retail demand in June?A: Galagher Jeff, CFO, explained that the guidance range of $245 million to $265 million reflects uncertainty in the current environment, including fuel and customer volatility. While the USPP acquisition was planned, its size and timing were not known when guidance was set, so any benefit from the deal is captured within the existing $20 million range. The company is executing its programs to drive customers into stores for both fuel and merchandise, and APC is delivering, but management remains cautious about giving too much confidence given the month-to-month changes in the operating environment. Q: Can you elaborate on the pressure points in the fleet fueling segment, particularly regarding the year-over-year margin decline?A: Galagher Jeff, CFO, explained that the margin compression in fleet fueling is primarily due to the Opus+ pricing model, where many deals have a fixed price for customers. In a falling fuel price environment, the company ends up paying more for fuel than the fixed price it charges customers, which pressures margins. This dynamic was particularly pronounced in the second quarter as index prices declined more quickly than the weighted average inventory cost. Q: How is the company's loyalty program, particularly Fueling America's Future and the new $0.10 Tuesdays offering, driving customer engagement and financial performance?A: Arie Kotler, Chairman, President and CEO, highlighted that enrolled members' average monthly spend is more than two times higher than non-enrolled members, with visits and basket size almost 50% higher. The company added over 100,000 new members (5% growth) in Q2. The $0.10 Tuesdays offering, launched in June, has driven double-digit growth in gallons sold on Tuesdays. Enrolled sales growth and enrolled margin both increased 30 basis points in Q2 compared to Q1. The program has saved members more than $4 million since inception, and the company believes it offers the best fuel discount program in the country, with stackable discounts up to $2.50 per gallon on up to 20 gallons. Q: What are the learnings from the foodservice offering rollout, and how is it impacting store performance?A: Arie Kotler and Galagher Jeff noted that the company is in a test-and-learn phase with its foodservice offering, now available in approximately 140 stores. The customer response has been strong, with double-digit growth in both merchandising sales and fuel gallons at remodeled stores. The foodservice offering has contributed to merchandise margin expansion, which reached 34.7% in Q2, up 110 basis points year-over-year. The company is focusing on menu optimization and cost model support, with plans to expand the offering to additional locations this year while prioritizing regions and stores best positioned to maximize margin. Q: Can you provide an update on the dealerization program and its impact on the company's operating model?A: Arie Kotler, Chairman, President and CEO, clarified that there has been no deceleration in the dealerization program. The company converted 21 additional stores in Q2, bringing the total to 471 conversions since the program began in mid-2024. There are approximately 70 additional stores committed under letter of intent, under contract, or already converted since quarter end. The pace has moderated simply because the initial large pool of stores has been addressed, and the remaining pipeline is smaller. The program is a key lever in ARKO's transformation toward a lower-cost, more capital-efficient operating model with stronger cash flow characteristics. Q: How is the company thinking about capital allocation, particularly regarding the recent senior notes repurchase and future uses of cash?A: Galagher Jeff, CFO, and Arie Kotler explained that the company is very return-focused in capital allocation, with two primary uses: growth investments (new stores, remodels, and card locks) and opportunistic debt repurchases. The recent repurchase of $38 million of 5.8% senior notes for $35 million in cash was opportunistic, taking advantage of a discount. The company also increased its PNC credit line by $74 million subsequent to quarter end, bringing aggregate capacity to $214 million. Management will continue to evaluate bond repurchases while maintaining flexibility to execute its growth strategy, and the 5.8% notes remain an attractive part of the capital structure given current interest rates. Q: How is the consumer behaving in the current environment, and have you seen any rebound as gas prices have eased?A: Arie Kotler, Chairman, President and CEO, described 2026 as a very volatile year, with January strong, February impacted by weather, and pressure building from April through June as fuel prices rose. June was the softest month, but the company has seen some bounce back in July as fuel prices eased. When gas prices exceed $4 per gallon, consumers face significant pressure, which is why programs like Fueling America and $0.10 Tuesdays are critical. Despite the challenging environment, the company managed to limit same-store merchandise sales decline (excluding cigarettes) to just 0.9% while expanding merchandise margin by 110 basis points, resulting in nearly flat merchandise margin dollars on a same-store basis. Q: What does the competitive landscape look like in this environment, and how is ARKO differentiating itself?A: Arie Kotler, Chairman, President and CEO, noted that the entire industry is feeling pressure, with peers reporting similar declines in fuel gallons. Competitors are all trying to attract gallons through various promotions, but ARKO believes its Fueling America program is unique, offering up to $2.50 off For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the 14% year-over-year increase in first-half adjusted EBITDA to disciplined fuel pricing and the benefits of a more diversified earning base. The retail segment faced a challenging consumer backdrop in June, with sentiment reaching historic lows and high fuel prices influencing purchasing behavior. Despite retail demand softening, the company expanded merchandise margins by 110 basis points through disciplined category management and vendor-supported promotions. The 'dealerization' program remains a core strategic pivot, converting 21 retail stores to dealer locations this quarter to move toward a lower-cost, more capital-efficient operating model. Management highlighted the strategic importance of the APC subsidiary, which signed an agreement to acquire U.S. Petroleum Partners (USPP) to add scale and vertical integration. Fuel remained a critical earnings stabilizer, with disciplined pricing delivering strong margins that offset lower same-store gallons sold. The loyalty program is a primary traffic engine, with enrolled members spending more than 2x higher monthly than non-enrolled members. Management reaffirmed full-year 2026 adjusted EBITDA guidance of $245 million to $265 million, assuming higher fuel margins will offset lower retail volumes. The USPP acquisition is expected to close later this year, contributing approximately $30 million in annual adjusted EBITDA and adding 280 million gallons of fuel volume. The company plans to complete approximately 25 store remodels in 2026, targeting double-digit merchandise sales and gallon growth based on early results. Expansion of the cardlock platform continues with 20 new locations identified for 2026, driven by low capital requirements and attractive mid-to-high-end expected returns. Guidance for the second half of the year reflects caution due to ongoing fuel price volatility and uncertainty regarding consumer behavior. Elevated fuel prices resulted in a $3.3 million increase in same-store credit card fees, acting as a direct headwind to retail profitability. Tightened SNAP EBT eligibility rules in certain states reduced same-store sales growth (excluding cigarettes) by approximately 75 basis points. The USPP deal includes an earn-out provision of $30 million in stock, contingent on the acquired business achieving specific EBITDA targets in its first four quarters. Fleet Fueling margins were pressured by a falling price environment where index prices declined faster than weighted average inventory costs. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that while the USPP deal will provide benefits, the $20 million guidance range accounts for uncertainty in closing timing. The conservative outlook is primarily driven by volatility in fuel prices and shifting consumer demand patterns observed month-to-month. The deal adds two fuel terminals and a transportation fleet, allowing APC to participate in more of the refined product value chain. Management expects the additional 280 million gallons to provide economies of scale and better leverage when negotiating supply contracts with major oil companies. The pace of conversion moderated because the company has already addressed the largest initial groups of stores, with approximately 70 locations remaining in the pipeline. Management expects to reach a total of slightly over 500 dealerized stores upon completion of current contracts and letters of intent. The company repurchased $38 million of senior notes at a discount and will continue to evaluate opportunistic buybacks alongside growth investments. Management emphasized maintaining liquidity, recently increasing a credit line with PNC by $74 million to support strategic flexibility.

Subsidiary Signs Agreement to Acquire a Vertically Integrated Fuel Supply and Distribution Platform RICHMOND, Va., Aug. 07, 2026 (GLOBE NEWSWIRE) -- ARKO Corp. (Nasdaq: ARKO) (“ARKO” or the “Company"), one of the largest operators of convenience stores and wholesalers of fuel in the United States, today announced financial results for the second quarter ended June 30, 2026, and reaffirms full-year financial 2026 guidance. Second Quarter and First Half 2026 Key Highlights (vs. Year-Ago Period) 1,2 Net income for the quarter was $9.4 million compared to $20.1 million in the prior year period, and net income for the six months ended June 30, 2026, was $3.8 million compared to $7.4 million in the prior year period. Prior year periods net income included a non-cash gain of $20.8 million related to a sale-leaseback transaction. Adjusted EBITDA for the quarter was $72.0 million, compared to $76.9 million in the prior year period, as higher retail same store operating expenses, mostly a $3.3 million increase in credit card fees driven by higher fuel prices, more than offset incremental benefits resulting from the Company's dealerization program. Adjusted EBITDA for the six months ended June 30, 2026 was $122.9 million, compared to $107.8 million in the prior year period, an increase of 14.0% year-over-year. Merchandise margin for the quarter increased 110 basis points to 34.7% compared to 33.6%, reflecting disciplined pricing, favorable product mix and vendor-supported promotions. Retail same store fuel margin for the quarter increased to 48.7 cents per gallon compared to 45.7 cents per gallon, while same store fuel contribution increased approximately 0.5%. ARKO Petroleum Corp.'s Strategic Acquisition Announcement Subsequent to quarter end, the Company’s subsidiary ARKO Petroleum Corp. (Nasdaq: APC), announced an agreement to acquire the business of U.S. Petroleum Partners, LLC, ("USPP"), a vertically integrated fuel supply and distribution platform serving customers throughout the Great Lakes region. The strategic transaction would meaningfully expand APC’s platform and accelerate APC's growth strategy outlined at the time of its initial public offering. The acquisition is expected to increase APC’s annual fuel volumes by approximately 280 million gallons, or approximately 14% on a trailing twelve-months basis, by adding more than 400 dealer locations and meaningfully enhance the Company's commercial and operational scale. The acquisition is expected to be accretive and add approximately $30 million of annualized Adjusted EBITDA and enhance Discretionary Cash Flow, further enhancing APC’s earnings diversification and cash generation capability. The acquisition is expected to strengthen supplier relationships, enhance vertical integration and expand fee based earnings streams through the addition of two fuel terminals and expanded transportation capabilities. These assets are expected to create additional opportunities for future earnings growth through increased throughput, operational synergies and future acquisition opportunities. The consideration at closing will consist of $205 million in cash plus the cost of inventory. Additionally, at closing APC will issue $30 million in APC Class A common stock that will be held in escrow and released to the seller subject to the acquired business achieving certain EBITDA-based financial targets of the acquired business in the first four full quarters after closing. 1 See Use of Non-GAAP Measures below.2 All figures for fuel costs, fuel contribution and fuel margin per gallon exclude the fixed margin or fixed fee paid to the GPMP segment for the cost of fuel. Additional details regarding the transaction, including the strategic and financial highlights, can be found in a separate press release issued by ARKO Petroleum Corp. yesterday, along with an investor presentation, both available on the Investor Relations section of APC's website at www.arkopetroleum.com. Other Key Highlights The Company continued execution of its transformation strategy, including converting 21 retail stores to dealer locations during the quarter, bringing total conversions to 471 since the dealerization program began in 2024. The Company advanced customer-value and loyalty initiatives, including Fueling America’s Future, which has delivered more than $4.0 million in customer fuel savings through stackable discounts, weekly member savings and targeted promotions. The Company continues to invest in its retail stores, including remodels, fas craves food and beverage offerings, retail new-to-industry ("NTI") stores, technology and automated ordering. During the quarter, the Company opened one NTI retail store, completed two remodels and had 12 projects in construction or active development, and continues to plan for a total of approximately 25 remodels, all which feature the fas craves food and beverage elements. The Company is targeting 20 additional new fleet fueling locations in 2026, with one opened in March, two opened in July and 17 in progress, reflecting the attractive, durable cash flow profile of its fleet fueling business. Repurchased approximately $37.9 million principal amount of the Company's outstanding 5.125% senior notes during the quarter, at a discount, further strengthening the Company's balance sheet and financial flexibility. The Board of Directors declared a quarterly dividend of $0.03 per share of common stock to be paid on August 31, 2026, to stockholders of record as of August 20, 2026. “We delivered a strong first half of 2026, generating $123 million of Adjusted EBITDA, compared to $108 million last year, up 14.0%, despite weather disruption early in the year and a more challenging consumer environment as the second quarter progressed," said Arie Kotler, Chairman, President and Chief Executive Officer of ARKO. "Consumer demand softened during the second quarter as sustained higher fuel prices continued to pressure household budgets. Even so, our teams remained focused on the areas within our control, maintaining disciplined fuel and merchandise margins while continuing to deliver value for our customers. Importantly, our Wholesale and Fleet Fueling segments continued to perform well, which we believe demonstrates the strength of ARKO's diversified platform and the value of APC as a focused growth and acquisition vehicle. We expect that the recently announced acquisition of the business of US Petroleum Partners will be an important next step in APC’s growth strategy, aimed at increasing scale while creating additional opportunities to enhance supplier economics, throughput and cash generation.” Mr. Kotler continued: “We continue to make progress across dealerization, remodels, loyalty and other transformation initiatives as we convert our network into a more focused, resilient and higher cash flow business. Our solid first-half performance, together with our diversified business model and continued execution across the organization, positions us well to achieve our reaffirmed full year 2026 Adjusted EBITDA outlook and create long-term value for our shareholders.” Second Quarter 2026 Segment Highlights Retail For the second quarter of 2026, merchandise contribution decreased by $14.0 million, or 10.4%, compared to the second quarter of 2025, while merchandise margin increased by 110 basis points to 34.7% for the second quarter of 2026 compared to 33.6% for the second quarter of 2025. The decrease in merchandise contribution was primarily due to a $14.0 million decrease related to retail stores that were closed or converted to dealer locations. Same store merchandise contribution decreased by $0.6 million in the second quarter of 2026 compared to the second quarter of 2025, reflecting the challenging macroeconomic environment and soft consumer environment. For the second quarter of 2026, fuel contribution decreased by $8.4 million, or 7.8%, compared to the second quarter of 2025, primarily due to a $9.3 million decrease in fuel contribution related to retail stores that were closed or converted to dealer locations, which was partially offset by a same store fuel contribution increase of $0.5 million. Same store fuel margin per gallon for the second quarter of 2026 increased 3.0 cents per gallon to 48.7 cents per gallon compared to 45.7 for the second quarter of 2025, primarily as a result of significant volatility in the fuel market due to the geopolitical environment. For the second quarter of 2026, site operating expenses decreased by $16.6 million, or 9.4%, compared to the second quarter of 2025 primarily due to $25.8 million of reduced expenses related to retail stores that were closed or converted to dealer locations, partially offset by an increase in same store operating expenses of $8.3 million, or 5.6%, primarily due to higher credit card fees associated with elevated fuel prices, insurance, personnel costs and rent. Wholesale For the second quarter of 2026, wholesale operating income increased by $1.6 million compared to the second quarter of 2025 as a result of additional operating income from retail sites converted to dealer locations, which was partially offset by reduced operating income at comparable wholesale sites. For the second quarter of 2026, fuel contribution increased by $0.9 million compared to the second quarter of 2025. Fuel contribution for the second quarter of 2026 at fuel supply locations increased by $2.0 million due to incremental contribution from retail sites converted to dealer locations. Fuel margin per gallon at fuel supply locations increased 1.3 cents per gallon compared to the second quarter of 2025, primarily as a result of increased prompt pay discounts related to higher fuel costs. Fuel contribution for the second quarter of 2026 at consignment agent locations decreased $1.1 million due to reduced fuel contribution at comparable wholesale sites, which was partially offset by $0.5 million of incremental contribution from retail sites converted to dealer locations. Fuel margin per gallon at consignment agent locations decreased 1.5 cents per gallon compared to the second quarter of 2025, as market prices declined more quickly than the Company's weighted average inventory cost. For the second quarter of 2026, other revenues, net increased by $4.5 million, and site operating expenses increased by $4.2 million, in each case compared to the second quarter of 2025, resulting primarily from retail stores converted to dealer locations. Fleet Fueling For the second quarter of 2026, fuel contribution decreased by $0.7 million compared to the second quarter of 2025. At proprietary cardlocks, fuel contribution decreased by $0.3 million, and fuel margin per gallon also decreased for the second quarter of 2026 compared to the second quarter of 2025. At third-party cardlock locations, fuel contribution decreased $0.4 million, and fuel margin per gallon decreased for the second quarter of 2026 compared to the second quarter of 2025. These decreases were primarily due to higher than average fuel margins in the prior year, as well as margin compression during the second quarter of 2026, as indexed prices declined more quickly than the weighted average inventory cost. Liquidity and Capital Expenditures As of June 30, 2026, the Company’s total liquidity was approximately $1.0 billion, consisting of approximately $246 million of cash and cash equivalents and approximately $786 million of availability under the Company's lines of credit. Outstanding debt was approximately $675 million, which after deducting cash and cash equivalents resulted in net debt of approximately $429 million. During the second quarter of 2026, the Company repurchased approximately $37.9 million principal amount of its outstanding senior notes as part of its disciplined capital allocation strategy. Capital expenditures were $33.3 million for the second quarter of 2026, including investments in NTI retail stores and fleet fueling locations, remodeling of new format stores, EV chargers, upgrades to fuel dispensers and other investments in stores. Subsequent to quarter end, the Company increased one of its PNC lines of credit by $74 million, to an aggregate of $214 million under the two PNC lines of credit, providing additional flexibility to continue executing its strategy. Quarterly Dividend The Company’s ability to return cash to its stockholders through its cash dividend program is consistent with its capital allocation framework and reflects the Company’s confidence in the strength of its cash generation ability and strong financial position. The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on August 31, 2026 to stockholders of record as of August 20, 2026. Company-Operated Retail Store Count and Segment Update The following tables present certain information regarding changes in the retail, wholesale and fleet fueling segments for the periods presented: Full Year 2026 Guidance Based on its first-half performance and current expectation for the remainder of the year, the Company is reaffirming its full year 2026 Adjusted EBITDA, which the Company currently expects to range between $245 million and $265 million, while increasing its outlook for the range of average annual retail fuel margin between 45.5 cents per gallon to 47.5 cents per gallon, with higher margins expected to offset lower retail fuel volumes. The Company is not providing guidance on net income at this time due to the unavailability of certain required inputs that are not available without unreasonable efforts, including depreciation and amortization related to its capital allocation as part of its focus on strategic and organic growth. Conference Call and Webcast Details The Company will host a conference call today, August 7, 2026, to discuss these results at 9:00 a.m. Eastern Time. Investors and analysts interested in participating in the live call can dial 877-605-1792 or 201-689-8728. A simultaneous, live webcast will also be available on the Investor Relations section of the Company’s website at https://www.arkocorp.com/news-events/ir-calendar. The webcast will be archived for 30 days. About ARKO Corp. ARKO Corp. (Nasdaq: ARKO) is a Fortune 1000 company that is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Based in Richmond, VA, our retail segment operates retail convenience stores under more than 25 regional store brands in the District of Columbia and more than 30 states across the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern U.S. Our highly recognizable Family of Community Brands offers delicious, prepared foods, beer, snacks, candy, hot and cold beverages, and multiple popular quick serve restaurant brands. Our wholesale segment supplies fuel to independent dealers and consignment agents; our fleet fueling segment includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations), and commissions from the sales of fuel using proprietary fuel cards that provide customers access to a nationwide network of fueling sites; and our GPMP segment primarily engages in inter-segment transactions related to the wholesale distribution of fuel to substantially all of our sites that sell fuel in the retail, wholesale and fleet fueling segments. In February 2026, we completed the initial public offering of our subsidiary ARKO Petroleum Corp. (Nasdaq: APC), which is the primary operating entity for the wholesale, fleet fueling, and GPMP segments. To learn more about GPM stores, visit: www.gpminvestments.com. To learn more about ARKO, visit: www.arkocorp.com. To learn more about APC, visit: www.arkopetroleum.com. Forward-Looking Statements This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, the Company’s expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by use of words such as “accretive,” “anticipate,” “aim,” “believe,” “continue,” “could,” “estimate,” “expect,” “guidance,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to, among other things, changes in economic, business and market conditions; the Company’s ability to successfully integrate business that it may acquire, including the business of USPP; the Company’s ability to achieve the benefits that it expects to realize as a result of its acquisitions, including the business of USPP; the potential negative impact on the Company’s financial condition and results of operations if it fails to achieve the benefits that it expects to realize as a result of its business acquisitions, including the business of USPP; liabilities of the businesses that the Company acquires that are not known to the Company; the Company’s ability to maintain the listing of its common stock on the Nasdaq Stock Market; changes in its strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; expansion plans and opportunities; changes in the markets in which the Company competes; changes in applicable laws or regulations, including those relating to environmental matters; market conditions and global and economic factors beyond its control; the success of the Company's transformation plan, including the dealerization of retail stores; the impact of APC operating as a public company; and the outcome of any known or unknown litigation and regulatory proceedings. Detailed information about these factors and additional important factors can be found in the documents that the Company files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. The Company does not undertake an obligation to update forward-looking information, except to the extent required by applicable law. Use of Non-GAAP Measures The Company discloses certain measures on a “same store basis,” which is a non-GAAP measure. Information disclosed on a “same store basis” excludes the results of any store that is not a “same store” for the applicable period. A store is considered a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. The Company believes that this information is useful for its investors, securities analysts, and other interested parties by providing greater comparability regarding its ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company discloses certain measures on a “comparable wholesale sites” basis, which is a non-GAAP measure. Information disclosed on a “comparable wholesale sites” basis excludes wholesale sites added through retail stores converted to dealer locations until the first quarter in which these sites had a full quarter of wholesale activity in the prior year. The Company believes that this information is useful for its investors, securities analysts, and other interested parties by providing greater comparability regarding its ongoing operating performance. The Company defines EBITDA as net income including net income attributable to non-controlling interests before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition and divestiture costs, share-based compensation expense, other non-cash items, certain litigation expenses, and other unusual or non-recurring charges. Both EBITDA and Adjusted EBITDA are non-GAAP financial measures. The Company uses EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating its performance because they eliminate certain items that it does not consider indicators of its operating performance. EBITDA and Adjusted EBITDA are also used by many of its investors, securities analysts, and other interested parties in evaluating its operational and financial performance across reporting periods. The Company believes that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that it uses internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing its operating performance. EBITDA and Adjusted EBITDA should not be considered as alternatives to any financial measure presented in accordance with GAAP, including net income. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation, or as substitutes for the analysis of its results as reported under GAAP. The Company strongly encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, same store measures, comparable wholesale sites, EBITDA and Adjusted EBITDA, as defined by the Company, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare the Company’s use of these non-GAAP financial measures with those used by other companies. Reconciliations of forward-looking non-GAAP measures related to the business of USPP following its acquisition included in this press release to the corresponding GAAP financial measures are not included due to variability and difficulty in making accurate forecasts and projections, particularly in light of potential changes in USPP’s business following its acquisition, as well as, because certain information is not currently ascertainable or accessible, and because not all of the information necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures is available to the Company without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information, nor can the Company accurately predict all the components of the applicable non-GAAP financial measures and reconciling adjustments thereto; accordingly, the corresponding GAAP measures may be materially different than the non-GAAP measures. Such forward-looking information is also subject to uncertainty and various risks, including those set forth in the risk factors discussed above, and there can be no assurance that any forecasted results or conditions will actually be achieved. Company and Investor ContactPriya TrivediARKO [email protected] Supplemental Disclosure of Non-GAAP Financial Information Supplemental Disclosures of Segment Information Retail Segment Wholesale Segment Fleet Fueling Segment

Arko Corp. ARKO is likely to witness top-and bottom-line declines when it reports second-quarter 2026 earnings on Aug. 7. The Zacks Consensus Estimate for revenues is pegged at almost $2 billion, indicating a 0.7% drop from the year-ago period level. The consensus mark for earnings has remained unchanged over the past 30 days at 15 cents a share, which suggests a decline of 6.3% from the figure reported in the year-ago period. ARKO has a trailing four-quarter surprise of 43.2%, on average. ARKO Corp. price-consensus-eps-surprise-chart | ARKO Corp. Quote ARKO’s second-quarter performance is likely to have remained under pressure from a value-conscious consumer environment, with elevated fuel prices influencing customer spending patterns. Management noted that consumers were actively seeking promotions and discounts, making competitive pricing and compelling in-store offers important for sustaining traffic. These initiatives are likely to have supported store visits, though the emphasis on value may have limited pricing flexibility.The continued conversion of company-operated stores to dealer locations is likely to have weighed on retail merchandise sales and fuel volumes. Although dealerization lowers operating costs and shifts contribution to the wholesale segment, the reduced company-operated store base is likely to have created unfavorable year-over-year comparisons for retail revenues. Higher labor rates, utilities and credit card fees are also likely to have pressured same-store operating expenses.On the positive side, ARKO may have benefited from improving traffic trends, disciplined fuel pricing, targeted promotions and continued loyalty engagement. Management said April trends remained consistent with the momentum seen earlier in the year, while the relaunched loyalty app, Fueling America’s Future campaign and summer promotions are likely to have supported trip frequency, customer retention and basket size. Our proven model doesn’t conclusively predict an earnings beat for Arko this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. Arko currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.US Foods Holding Corp. USFD currently has an Earnings ESP of +1.10% and a Zacks Rank of 2. The consensus estimate for the quarterly revenues is pinned at $10.46 billion, which indicates 3.8% growth from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for US Foods’ upcoming quarter’s EPS is pegged at $1.37, which implies 15.1% growth year over year. USFD delivered a trailing four-quarter earnings surprise of 1.4%, on average.The Kraft Heinz Company KHC currently has an Earnings ESP of +0.82% and a Zacks Rank of 2. The Zacks Consensus Estimate for quarterly revenues is pegged at $6.2 billion, which indicates a decrease of nearly 3% from the figure reported in the prior-year quarter. The Zacks Consensus Estimate for second-quarter 2026 earnings per share is pegged at 53 cents, implying a 23.2% year-over-year decline. KHC has a trailing four-quarter earnings surprise of 10.2%, on average.Monster Beverage Corporation MNST currently has an Earnings ESP of +2.61% and a Zacks Rank of 3. The consensus estimate for Monster Beverage’s quarterly revenues is pinned at $2.4 billion, which implies 14.5% growth from the figure reported in the prior-year quarter. The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at 59 cents, which calls for a 13.5% jump year over year. MNST delivered a trailing four-quarter earnings surprise of 9.6%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ARKO Corp. (ARKO) : Free Stock Analysis Report Monster Beverage Corporation (MNST) : Free Stock Analysis Report Kraft Heinz Company (KHC) : Free Stock Analysis Report US Foods Holding Corp. (USFD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

RICHMOND, Va., July 30, 2026 (GLOBE NEWSWIRE) -- ARKO Corp. (Nasdaq: ARKO) (the “Company”), a Fortune 1000 company and one of the largest convenience store operators in the United States, today announced that the Company will host a conference call on Friday, August 7, 2026 at 9:00 a.m. Eastern Time to discuss its financial results for the second quarter ended June 30, 2026. ARKO Corp.’s management team will host the conference call, followed by a question-and-answer period. The Company will provide its financial results in a press release prior to the call. Date: Friday, August 7, 2026Time: 9:00 a.m. Eastern TimeToll-free dial-in number: (877) 605-1792 International dial-in number: (201) 689-8728Webcast: ARKO's Q2 2026 Earnings Call A telephonic replay will be available approximately three hours after the call concludes through Monday, November 9, 2026. Toll-free replay number: (877) 660-6853 International replay number: (201) 612-7415Replay ID: 13761864 A link to the live webcast and replay will also be available at https://www.arkocorp.com/news-events/ir-calendar. We encourage all participants to register at least 15 minutes prior to the 9:00 a.m. ET start time. If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829. About ARKO Corp. ARKO Corp. (Nasdaq: ARKO) is a Fortune 1000 company that is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Based in Richmond, VA, our retail segment operates retail convenience stores under more than 25 regional store brands in the District of Columbia and more than 30 states across the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern U.S. Our highly recognizable Family of Community Brands offers delicious, prepared foods, beer, snacks, candy, hot and cold beverages, and multiple popular quick serve restaurant brands. Our wholesale segment supplies fuel to independent dealers and consignment agents; our fleet fueling segment includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations), and commissions from the sales of fuel using proprietary fuel cards that provide customers access to a nationwide network of fueling sites; and our GPM Petroleum segment primarily engages in inter-segment transactions related to the wholesale distribution of fuel to substantially all of our sites that sell fuel in the retail, wholesale and fleet fueling segments. In February 2026, we completed the initial public offering of our subsidiary ARKO Petroleum Corp., which is the primary operating entity for the wholesale, fleet fueling, and GPMP segments. To learn more about GPM stores, visit: www.gpminvestments.com. To learn more about ARKO, visit: www.arkocorp.com. To learn more about APC visit: https://www.arkopetroleum.com/. Company and Investor ContactPriya TrivediARKO [email protected]

Image source: The Motley Fool. Thursday, May 7, 2026 at 5 p.m. ET Chairman, President, and Chief Executive Officer — Arie Kotler [Unspecified Finance Executive] — [Unknown Speaker] Operator Need a quote from a Motley Fool analyst? Email [email protected] Arie Kotler: Capital allocation is showing up in our financial results. The initial public offering of minority interest in our subsidiary APC in February 2026 was an important milestone in our story, and we believe that it gives investors a clear view of the strength and value of our wholesale, fleet fueling, and G&P businesses, their attractive margins, and cash flow attributes. We believe that Arko Corp. is currently positioned with strong growth opportunities across both operating channels, the retail on the one hand, and the wholesale and fleet fueling on the other hand. As of 03/31/2026, Arko Corp. owned 35 million shares of APC, representing an implied value today of roughly $650 million based on APC's market capitalization of approximately $900 million. We will keep the APC discussion short, but it is important investors recognize both the transparency and the embedded value that the APC structure provides. Turning to the operating environment, the consumer remains value focused and deliberate, especially in this elevated fuel cost environment. We continue to see customers taking advantage of promotions and actively using our apps for savings on both fuel and merchandise. That reinforces the importance of sharp pricing, clear value communication, and compelling in-store offers. Importantly, underlying trends improved as we moved through the quarter. After weather-related disruptions early on, traffic, transactions, and gallons all improved in March, reinforcing our confidence in the trajectory of the business. Dealerization has continued to be one of the most powerful levers reshaping Arko Corp. We converted 41 retail stores to dealer locations in the first quarter, bringing total converted locations to 450 since we adopted our transformation plan in 2024, with approximately 75 additional stores committed, either under letter of intent, under contract, or already converted since quarter end. We expect to complete those plus additional conversions by 2026. The benefits are increasingly evident: lower operating costs, reduced maintenance CapEx, stronger cash flow generation, and a more focused retail portfolio that is positioned for growth. As we progress through 2026, we believe our reported KPIs will increasingly reflect the quality of the remaining portfolio, something that is already apparent in our Q1 performance. Retail performance clearly improved this quarter. Same-store merchandise sales excluding cigarettes returned to growth, marking our strongest results in two years. This was driven by better execution across promotions, pricing, and customer engagement. Merchandise margin grew 70 basis points year-over-year and finished Q1 at 33.9%. This 70 basis points margin improvement is on top of the 70 basis points we grew margin in Q1 of last year. Cigarette sales performed better than expected due to promotional pricing and manufacturer support, while other tobacco products continued to grow strongly, supporting traffic and transactions without undermining margin integrity. Overall, our retail performance reflects a healthier business with improving trends and a more productive store base. We are not trading margin for volume. Fuel was a significant earnings contributor in the quarter. We operated through a highly volatile fuel environment and executed effectively, delivering retail cents per gallon of $0.0479 and driving same-store fuel contribution up approximately 20%. While gallons were pressured early in the quarter by the weather, they improved throughout the quarter, even in a higher price environment, and fuel transactions increased approximately 7% in March. While fuel volatility was supportive this quarter for CPG, it was not the only driver of improved results. Higher fuel prices can lead to smaller fill-ups, but they can also drive more frequent visits. This reinforces our strategy of being competitive to drive traffic and offering promotions like the Fueling America's Future discount fuel campaign to give dollars back to the consumer. In honor of America's 200th birthday, Fueling America's Future is now offering $2.50 off per gallon up to 20 gallons. We remain focused on delivering value as we head into the summer driving season. That brings me to loyalty. Our Fueling America's Future campaign and Fas Rewards platform remain central to our growth strategy in trip frequency, customer engagement, and basket size. Enrollment increased 98% in the first quarter compared to the same period last year, with approximately 53 thousand new members. Notably, almost half of new enrollees joined since the launch of the new app and $10 enrollment program in early March. We believe that these programs are important in any environment, but especially in one where customers are actively looking for value. A relaunched loyalty app on a new technology platform positions us to better personalize offers, improve communication, and more deliberately use loyalty as a traffic and retention engine, especially as we head into our one hundred days of summer promotional season. Remodels and new-to-industry locations also remain key components of our long-term growth strategy. In the first quarter, we opened two NTI retail stores and one NTI cardlock location, and we remain on track for three new Dunkin' stores, one NTI retail store, 20 NTI cardlocks, and 25 remodels in 2026. Early performance from recent remodels has been encouraging, reinforcing our conviction that modern, food-forward formats can drive higher sales, stronger fuel performance, and improved store-level economics. On the fleet fueling side, building new cardlocks continues to represent one of our most attractive uses of capital, given the low investment, modest labor model, and compelling returns. Before I turn it over, let me leave you with this. The first quarter was not driven by a one-time margin event or a single metric. It reflected structural progress across fuel pricing, dealerization, cost discipline, portfolio quality, and retail execution. We are not going to overstate one quarter, but we are encouraged by what we are seeing. Our transformation plan has been gaining traction, and promotions are driving sales and loyalty program enrollment, which is visible in our financial performance. I will now turn the call over to Unknown Speaker for the financial results. Thank you. Unknown Speaker: We continue to be encouraged by the broad-based performance we are seeing across the business. In Q1, we saw improvement in retail trends, strong fuel margin execution, continued benefit from dealerization, and meaningful cost discipline at both the store and corporate levels. We remain focused on investing growth capital to drive strong returns in remodels, NTI retail stores, and cardlocks. Turning to our first quarter results, net loss was $5.6 million, compared with $12.7 million for the prior-year period, and adjusted EBITDA was approximately $51 million, up roughly 65% from the prior-year period, as Arie mentioned. In our retail segment, same-store merchandise sales were down 0.5% for the quarter, while same-store merchandise sales excluding cigarettes increased 0.4%, representing the strongest ex‑cigarette performance we have seen in two years, and we achieved these results even with disruptions caused by winter storms in our footprint. Merchandise margin was 33.9%, up 70 basis points from the prior year, driven by product mix and targeted customer promotions. This 70 basis points improvement in margin is on top of the 70 basis points improvement we had last year in Q1. On retail fuel, same-store gallons were down 3.2% year-over-year, but improved sequentially through the quarter, with fuel transactions increasing approximately 7% in March year-over-year. Same-store fuel contribution increased 20%, and retail cents per gallon increased by approximately [inaudible] to $0.0479 per gallon. That result reflects efficient pricing and strong execution in a volatile market. As mentioned, our merchandising and fuel trends were affected by the winter storms in Q1 across our core footprint. While difficult to quantify, we estimate same-store merchandising sales volumes would have been approximately 80 basis points stronger absent weather disruptions, reflecting the underlying strength of our base business. Similarly, we estimate the storm-related impact to total company fuel gallons was approximately 160 basis points. While we cannot control the weather, we do feel the normalized performance of the business is even stronger than shown, and we expect to build on this momentum. Turning to expenses, we remain focused on disciplined cost management across the business. Total retail site-level operating expenses were down 12% at $155.9 million, compared with $177.2 million for the prior-year period, which was primarily driven by our dealerization strategy. Same-store operating expenses increased 3.3% versus Q1 2025, driven by slightly higher labor rates, utilities, and higher credit card fees as retail fuel prices increased in March. On a consolidated basis, G&A expenses were down 4% from the prior year. This is consistent with our transformation plan and reflects a leaner cost structure and tighter operating discipline that we expect to continue. In our wholesale segment, operating income was approximately $23 million. Performance continued to benefit from dealerization and the related expansion of wholesale volume and profit contribution. Gallons were approximately 234 million gallons, and fuel margin was $0.98 per gallon. We continue to expect dealerization to support both earnings quality and cash flow generation over time. In our Fleet Fueling segment, operating income was approximately $12 million, an increase of 9% year-over-year from the strong margin environment. Fleet fuel margin was $49.3 per gallon, while gallons declined 3.2% and were also impacted by weather events in the quarter. Fleet Fueling remains a durable cash flow business, and with around 20 cardlocks targeted in 2026, we believe that cardlock expansion continues to represent an attractive capital deployment opportunity given the return profile and modest labor model. On the balance sheet, we ended the quarter with cash of $272 million and total liquidity of approximately $1.1 billion. In Q1, we paid down $206.7 million in debt using the net proceeds from the APC IPO, with long-term debt now at [inaudible], excluding lease-related financing liabilities. On capital allocation, our priorities remain clear. We will continue to execute on dealerization, invest in retail initiatives and remodels, support NTI and high-return cardlock growth, all while we maintain balance sheet discipline and a focus on returns. Capital expenditures were approximately $31 million in the first quarter, primarily focused on growth capital, as we have 17 cardlocks and 25 remodels underway. The APC IPO has improved our financial flexibility, but our framework has not changed. We are focused on the highest-return opportunities across the business and on improving cash flow over time. As we progress through 2026, we are encouraged by the momentum in the business. First quarter results reflected strong execution and improving underlying trends, particularly as the quarter progressed. While we are happy with our Q1 performance and strong start to 2026, we believe there is too much uncertainty in the market now to update our full-year guidance at this point. Looking ahead, we remain focused on continuing to execute, capturing the structural benefits of dealerization, and allocating capital to deliver strong returns. With that, I will hand the call back to Arie. Thank you. Arie Kotler: We are encouraged by the first quarter results, and our mindset remains the same. April has continued the year-to-date trends across the business. We plan to stay disciplined, keep executing, and continue building on the progress we made through the end of last year and into 2026. Operator, please open the line for questions. Thank you. Operator: We will now open the call for questions. And the first question comes from the line of Bobby Griffin with Raymond James. Operator: Please proceed. Bobby Griffin: Hey guys, thanks for taking the questions this morning. Congrats on some of the progress showing up in the business. Good to see. I guess, first, I wanted to maybe just touch on the dealerization aspect, and now that we really are starting to see the inflection point in the operations on a consolidated basis, does the end kind of pie of savings still look the same from a G&A standpoint that we have talked about in the past, and from the SG&A standpoint? Are you actually now kind of getting in the weeds and seeing that there might be more low-hanging fruit or more upside to some of those original estimates? Arie Kotler: Good morning, Bobby. Thank you for this question. Thank you for participating. So, as we mentioned before, Bobby, the transformation plan that we put together in 2024, we kept talking about the $20 million upside over there when actually, when this transaction is actually going to take place. So far, as you can see over here, and as we disclosed, approximately $30 million of benefits already is in place, given the trailing twelve months. As I mentioned, we have 75 additional locations that we are about to execute. Some of them are under LOI. Some of them are under contracts already. And I think the goal is really to complete that with maybe some additional others between now and the end of the year. And I think that is really the plan at the moment. If things will actually come later on and we see additional opportunities, of course, we will execute on them. That is something that we always take into account. But I think we are going to stick to our plan at the moment. Bobby Griffin: Okay. And then, Arie, so that puts you, round numbers, call it 1 thousand stores at retail. When you get to that level, then what is the go-forward kind of initiatives? You have the remodels that are starting to accelerate, you have some of the merchandising work, you have loyalty. So maybe help us think about once we get to this 1 thousand-store base at retail with those additional 75 stores to go, what are the moving parts or the initiatives that will be the focus point going forward there for us to grade the business on? Unknown Speaker: Sure, sure. Arie Kotler: First of all, what we did, going back to the transformation expenses of 2024 when we actually put the plan together, the goal was to move approximately 500-plus stores from the retail business to the wholesale business, concentrate on areas where we have economies of scale, concentrate on areas that we can win, concentrate on areas that are more competitive for us in terms of scale, in terms of where we operate. Concentrate on promotions. And, as you can see right now, you mentioned 1 thousand stores. The portfolio that we actually kept are the jewel of the jewel of the jewel when it comes to those stores. The goal moving forward will be to continue to grow and to continue to invest in those stores. As you can see, we are remodeling an additional 25 stores this year. The goal will be to build NTI around those stores. And the goal will be to continue to execute around those stores. I can tell you that a large portion of the portfolio is concentrated in the Mid-Atlantic states, Southeast, and Southwest. And that is basically the concentration, and that is where we would like to continue moving forward and just build around that. There is no question about that. We are very well capitalized, as was mentioned. Over $270 million cash on hand, and we have plenty of liquidity up to $1.1 billion to continue to grow the business. Bobby Griffin: Go ahead. Sorry about that. Go ahead. Really quickly. No. It is okay. Unknown Speaker: Arie covered it well. There are three big benefits we are starting to see in the business. One is operating expenses. As those stores get dealerized, it lowers our operating expenses. Second is G&A. As you mentioned, we are a more focused, lean organization on G&A. The third, which I think you hit on with Arie, it focuses our investment on retail stores that are positioned to win. So whether it is remodels, merchandising initiatives, loyalty program, the approximately 1 thousand stores that are left let us focus the capital on those and hopefully return very quickly to growth. We were almost there this quarter, but it really allows us to focus the investments to drive growth in those retail stores. Bobby Griffin: That is helpful. And then that actually dovetails into my final two questions. I mean, the remodels, I think we took that number up a little for what we are targeting to now do. Can you share any of the early stats you are seeing as the lift from these remodels? We have talked in the past about the capital for kind of a soft remodel versus a hard remodel, so I would imagine that is roughly about the same. But what about just the lift, now that you have maybe a little bit more data on what you are seeing? Unknown Speaker: Sure. Arie Kotler: So I can just talk about the early performance from the recent remodels. Like we mentioned, we are very encouraged with this part. It proves that the minute you actually invest in food service and you put food service format forward, that drives higher sales and stronger fuel performance. As a matter of fact, when people come into the store, they are actually leaving the stores and going to the pump, and it just helps us with better store-level economics. There is no question. Now, the plan for 2026, which we mentioned, approximately 25 store remodels, the whole idea is to continue concentrating on adding food service into those stores. Because the minute you invest in food service and you add food service into those stores, you bring more traffic, you have better customer engagement, and there are other items that are actually being attached to the food service when people are coming to the store. So that is really going to be the goal moving forward, to make sure that in all of those stores we are touching right now and we are remodeling right now, we are adding food service. In addition to all of those promotions that we mentioned earlier, all of those promotions are very beneficial for us, especially in this environment when fuel prices are going up. For example, when you purchase food, we talked about Fueling America. Think about it, Bobby. When you buy two Gatorade right now and get $0.50 off per gallon, in this environment you are talking about $10 off when you purchase 20 gallons. This is really important. So, again, all of those things will be very beneficial for us into 2026. Bobby Griffin: And, Arie, I am going to try to pin you down a little more. When you remodel a store, you put in the fast craves and that stuff you are working on, do you see a lift in same-store merchandise sales as well as same-store merchandise gallons? Unknown Speaker: Yes. So, Bobby, I will jump in on that one. Yes. The first ones we did last year, we saw about a 12% increase in merchandise sales overall and 14% in gallons versus the pre period. Some categories were up 20%, 30%. So we continue to see really good results, which is why we are accelerating the program. Every store is different, the levels of remodels are different, but we are very happy with what we are seeing, which is why we are trying to do it more. Bobby Griffin: Very good. I have taken enough time. I appreciate it. Arie Kotler: One more thing, Bobby. Since you got me excited about that, when we talk about food service, it is not just the words “food service.” It is also to make sure that we have delicious value meals. We launched in Q1 meals at $3, $4, $5, $6. Think about it. You can come to our stores in the afternoon to buy a chicken sandwich and a drink for $5. You can come to our stores and buy a coffee or cold drink and a breakfast sandwich for $4. Those are very important components. It is not just to add food service; it is also to make sure that you actually bring value to the consumers. Bobby Griffin: Thank you. I appreciate the details. Best of luck here in Q2, guys. Arie Kotler: Thank you very much, Bobby. Thanks, Bobby. The next question comes from the line of Daniel Guglielmo with Capital One Securities. Please proceed. Daniel Guglielmo: Everyone, thank you for taking my questions. Broader consumer trends have been mixed in this kind of complex macro environment. Can you just dig in a little more into your retail customer trends? Are you seeing strength in certain regions? And do you have any additional insights on April trends? Arie Kotler: Sure, sure. So let me start with the first one about consumer trends. Putting the weather aside for a second, I can tell you that before the volatility in gas prices, January started very strong. Excluding cigarettes, merchandise sales were above 5%. And then, of course, we were impacted by the weather. And then going into March, with the volatility of fuel pricing, we actually see customer trips increasing because of that. Just because the price of fuel is up, customer trips are up. We see an increase in penetration inside the stores because customers are coming more often because of that. And that brings me to the consumer and Fueling America promotions and all of the promotional activities that we are doing here when it comes to cigarettes and OTP—everything. I mentioned earlier today that cigarette trends are up. I believe this is the first time for a long period of time that cigarettes actually trended up. E‑cigarette trends are down. I believe the promotional activity, Daniel, that we are having in our stores, along with all of the other promotions that we are doing, brings traffic. And for me, traffic means that we are grabbing market share from somewhere else. The same thing goes to fuel. We mentioned that for the first time in a long period of time, we have been trending even a little bit better than the market average. So, again, I just think that is a mix of all of the things that we are doing in the stores to bring those customers in while everybody feels the pressure. Unknown Speaker: Dan, let me just add a little bit. The customers are under pressure, and I think we are having to take action to keep that traffic up, as Arie mentioned, provide promotions, provide discounts that they can get in the store and use in fuel. But you do see, especially as gas retail price elevates, we need to differentiate, and we are continuing to put our promotions out there that will continue to drive the traffic, hopefully in-store and with fuel through Fueling America. We had some really strong pockets of geography. We did have that weather noise, but Indiana, Kentucky, parts of Ohio were very strong. Our Southeast continues to be very strong. Some of what we call our Texarkana regions, which is Arkansas and Louisiana, are also continuing to perform. So we had a lot of very positive parts of the country and some that are a little more sluggish. But, like I said, we are taking action now and not waiting on the customer. We are trying to drive value for them. They continue to bring their trips, both gallon and merchandise, to Arko Corp. Daniel Guglielmo: That is great. I really appreciate all that color. That is really helpful. And just as a follow-up to that, can you talk about how the dealers have been able to navigate this complex environment? I know they are kind of smaller entrepreneurs with less resources, so I am curious if they have seen more headwinds in their businesses this year? Arie Kotler: There is no question that those dealers are having the same challenges like everybody else. But remember, the environment that we are living in is that almost 65% to 70% of the stores in America are operated by those dealers. So I think all of those guys are in the same boat. And when prices go up and we see volatility, there is no question that they are probably going to have a little bit of a decline in gallons, but that is going to be offset by an increase in CPG. That is the way they are managing the business, and this is the way they have been managing their business for the last fifty years. There is no question that prices of fuel have to come down at some point. We saw that for the past—look, we have been a public company for the past five years, and I have been around the block for over twenty years. It is a cycle. It is a cycle, and at some point the price will come down, and consumers and those dealers are going to continue to drive gallons and drive sales as they have before. Daniel Guglielmo: Great. I appreciate all that insight. Thank you. Arie Kotler: Thank you, Daniel. Thank you. This concludes the question and answer session. Operator: I would like to turn the call back over to Arie Kotler for closing remarks. Arie Kotler: Thank you, everyone, for participating this morning. It was great talking to you. And we hope to see you in our stores. Have a great morning. Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation. 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While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Arko. The Motley Fool has a disclosure policy. Arko (ARKO) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool