ARKO 2025 Q1 Earnings Misses Targets as Net Income Declines 2033.3%

ARKO Corp. reported a quarterly loss of $0.12 per share, which was better than the Zacks Consensus Estimate of a loss of $0.17 but worse than last year’s loss of $0.02 per share. The company’s revenue of $1.83 billion surpassed consensus estimates by 1.06%, yet declined from $2.07 billion a year ago. ARKO's guidance remains in line with expectations, focusing on strategic store conversions and channel optimization efforts to boost operating income.

Revenue
The total revenue of ARKO decreased by 12.0% to $1.80 billion in 2025 Q1, down from $2.05 billion in 2024 Q1.

Earnings/Net Income
ARKO's losses deepened to $0.12 per share in 2025 Q1 from a loss of $0.02 per share in 2024 Q1 (500.0% wider loss). Meanwhile, the company's net loss widened to $-12.67 million in 2025 Q1, representing a 2033.3% increase from the $-594000 loss recorded in 2024 Q1. The EPS performance reflects a negative financial outcome for the quarter.

Price Action
The stock price of ARKO has climbed 6.21% during the latest trading day, has jumped 10.42% during the most recent full trading week, and has surged 18.35% month-to-date.

Post-Earnings Price Action Review
The strategy of buying ARKO shares after a revenue drop quarter-over-quarter and holding for 30 days resulted in a significant loss. Over the past five years, this approach returned -50.22%, while the benchmark return was 92.56%, leading to an excess return of -142.78%. The compound annual growth rate (CAGR) was -13.07%, indicating poor performance. The strategy experienced a maximum drawdown of -62.94% and had a Sharpe ratio of -0.32, highlighting poor risk-adjusted returns and considerable risk. With volatility at 40.67%, the strategy faced substantial price fluctuations during the backtesting period, demonstrating the challenges of investing based on this method.

CEO Commentary
“Despite a pressured consumer environment, we effectively navigated ongoing macroeconomic headwinds in the first quarter,” said Arie Kotler, Chairman, President and Chief Executive Officer of ARKO. He noted that the company delivered results above the midpoint of their guidance, emphasizing a disciplined execution focus amid challenges, including adverse weather conditions and the impact of a leap day. Kotler highlighted the ongoing transformation strategy, which includes converting retail stores to dealer sites and enhancing customer engagement through food service and loyalty initiatives. He expressed a commitment to executing strategic priorities while maintaining a long-term vision.

Guidance
Looking ahead, the company continues to expect that its channel optimization efforts will yield a cumulative annualized operating income benefit exceeding $20 million. Additionally, ARKO plans to convert a meaningful number of additional stores to dealer sites throughout 2025 and advance its store remodeling initiative. The company is focused on driving shareholder returns and plans to open four new-to-industry stores in the second half of 2025. The leadership remains committed to disciplined capital deployment to support long-term value creation.

Additional News
Recently, ARKO Corp. announced its 'Fueling America's Future' campaign, offering significant fuel discounts through its fas REWARDS® loyalty program. Members can save up to $2 per gallon nationwide by stacking rewards from qualifying purchases. This initiative is part of a broader effort to address rising fuel prices and support working Americans. Additionally, ARKO's subsidiary, GPM Investments, launched its annual MDA Holiday Retail Campaign across 1,500 locations in 27 states, supporting families affected by muscular dystrophy and related diseases. These initiatives reflect ARKO's commitment to enhancing its customer engagement strategies and supporting community welfare.