Arko Corp. has recently released its 10-K report, providing an in-depth look into the company's operations. Based in Richmond, Virginia, Arko operates convenience stores across the United States, with a focus on retail, wholesale, fleet fueling, and GPM Petroleum segments. As of December 31, 2023, the company operated 1,543 retail convenience stores under more than 25 regional store brands and supplied fuel to 1,825 dealers while operating 298 cardlock locations.
The retail segment is a primary focus for Arko, generating a significant portion of its revenue from the retail sale of products and fuel at its stores. The company offers a wide array of products, including cold and hot foodservice, beverages, tobacco products, candy, snacks, groceries, beer, and general merchandise. Additionally, Arko has seen a substantial increase in enrolled members in its fas REWARDS loyalty program, reaching approximately 2.0 million members as of the end of 2023.
Arko's wholesale segment supplies fuel to dealers on consignment or cost-plus basis, while the fleet fueling segment operates proprietary and third-party cardlock locations and issues proprietary fuel cards. The company also engages in the wholesale distribution of fuel through its GPM Petroleum segment.
The report highlights Arko's strong store growth over the last decade, driven by successful acquisition strategies, including the completion of 25 acquisitions from 2013 through 2023. The company's strategic acquisitions have significantly impacted its reported results and store count, which grew from 320 sites in 2011 to 3,666 sites as of December 31, 2023. These acquisitions have made period-to-period comparisons of results challenging but have contributed to the company's size and scale, aiding its efforts to deploy organic growth strategies in acquired assets.
Arko has also focused on expanding and improving its in-store foodservice offerings, including fresh foods, quick-service restaurants, and proprietary food offerings. The company sees an opportunity to expand its foodservice offerings and margins in response to changing consumer behavior, with the launch of an extensive new pizza program in 2024.
The report also discusses the impact of fuel margins on the company's results of operations, noting that fuel margins can change rapidly due to factors such as the wholesale cost of fuel, supply chain disruptions, and competition in local markets. Additionally, the report mentions the impact of inflation and higher prevailing interest rates on merchandise costs and consumer purchasing power, which could potentially reduce sales volumes.
As a result of these announcements, the company's shares have moved 0.5% on the market, and are now trading at a price of $7.99. If you want to know more, read the company's complete 10-K report here.
