The following is a summary of the Arko Corp. (ARKO) Q1 2024 Earnings Call Transcript:
Financial Performance:
Arko Corp's Q1 2024 adjusted EBITDA was $36.6 million, surpassing their prior forecast.
Despite a decrease in same-store merchandise sales compared to the previous year, they achieved a 4.6% upswing over two years when excluding cigarettes.
The expanded merchandise margin rate, driven by an enhanced assortment mix, counterbalanced the plunge in same-store merchandise sales.
The range projected for the Q2 2024 EBITDA is $70 - $77 million, while the full-year 2024 EBITDA estimate remains between $250 - $290 million.
Projections indicate lower fuel sales and retail CPG in Q1 2024 in comparison to the same period in previous fiscal year.
Inside margins attained a record high in Q1 2024 but are not expected to maintain the same level in the coming quarters.
Business Progress:
After a decade of being acquisition-focused, Arko Corp intends to leverage strategic investments to reinforce organic growth, chiefly by enhancing its retail store offerings.
The company's common stock repurchase program has been extended for the buyback of up to $125 million worth of shares.
They are working on three new stores and have plans to convert many of their retail stores into dealer sites in the wholesale division.
To stimulate organic growth and profitability, less successful stores are being converted into dealer stores while further investments are targeted at top-performing stores.
Arko Corp is stepping up promotional activities for its pizza program, expecting it to notably impact Q2 and Q3 results.
Plans are in place to commence trials of a new store format, principally financed by operating cash flow.
More details: ARKO Corp IR
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