ARKO Gives Update on Multiyear Transformation Plan

Kotler shared that ARKO expects to convert "a meaningful number" of additional stores throughout 2025, including approximately 100 more retail stores by the end of the first quarter of this year. 

The company now expects that, at scale, its channel optimization will yield a cumulative annualized benefit of operating income in excess of $20 million. The channel optimization is also expected to enable ARKO to better focus and prioritize future investments in its remaining retail stores, noted Kotler.

ARKO also reported during the earnings call that in 2024, the company expanded its planned pipeline of new-to-industry (NTI) stores to eight, including two stores that opened in 2024 and two stores that opened in the first quarter of 2025. ARKO anticipates the opening of the four remaining NTI locations over the course of this year.

"We made progress with our dealerization program by strategically refining our retail footprint, strengthening merchandising initiatives and enhancing customer engagement through value-driven promotions for in-store merchandise and, more recently, a more aggressive value offer at the pump," Kotler said. "Our focus on operational efficiencies and the dealerization program allowed us to manage through industrywide headwinds while making strategic investments in high-growth areas, such as foodservice and other tobacco products to meet evolving customer preferences."

By the Numbers

ARKO's merchandise contribution for the fourth quarter of 2024 was $134.9 million vs. $146.8 million for the year-ago period. More than half of the merchandise contribution decline for the quarter was associated with ARKO's accretive dealerization program. For the year, merchandise contribution was $579.6 million vs. $585.1 million in 2023.

Other earnings news the Richmond-based company reported included:

• Net loss for the fourth quarter was $2.3 million.
• Net income for the full year was $20.8 million.
• In Q4, adjusted EBITDA was $56.8 million. For full year 2024, adjusted EBITDA was $248.9 million.
• Merchandise margin rate for the quarter increased to 33%. For the full year, the rate increased to 32.8%.
• Retail fuel margin for Q4 was 38.7 cents per gallon compared to 39.2 cents per gallon in Q4 2023 as a result of macroeconomically driven lower fuel prices and reduced price volatility. For the year, retail fuel margin increased to 39.6 cents per gallon.
• For Q4, retail fuel contribution was $100.2 million, while the full-year contribution was $428.2 million.

ARKO owns 100% of GPM Investments LLC and is one of the largest operators of convenience stores and wholesalers of fuel in the United States. It operates in four reportable segments: retail, which includes convenience stores selling merchandise and fuel products to retail customers; wholesale, which supplies fuel to independent dealers and consignment agents; fleet fueling, which includes the operation of proprietary and third-party cardlock locations, and issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites; and GPM Petroleum, which sells and supplies fuel to the company's retail and wholesale sites and charges a fixed fee, primarily to its fleet fueling sites.