Arko Corp. saw its net income for the second quarter of 2023 cut in half compared to the previous year due to an approximately $15 million increase in depreciation and amortization expenses in connection with recent acquisitions, and favorable fair-value adjustments in the prior year quarter, according to the company.
The parent company of GPM Investments reported net income for the quarter of $14.5 million, compared to $31.8 million in the prior year quarter.
- GPM Investments ranks No. 6 on CSP’s 2023 Top 202 list of the largest c-store chains in the country.
Arko Corp. has completed two acquisitions since the beginning of the year. In June, it completed the acquisition of the retail and fleet fueling assets of WTG Fuels Holdings LLC, the owner of Uncle’s Convenience Stores and Gascard fleet fueling operations.
And in March, Arko Corp. completed its acquisition, announced in September, of the assets of Transit Energy Group, which operates 135 convenience stores, supplies fuel to 190 independent dealers and operates a transportation business in the southeastern United States, for $370 million plus the value of inventory.
For the second quarter, convenience store operating expenses increased $29.5 million, or 17.5% as compared to the prior year period, primarily due to $29.8 million of expenses related to recent acquisitions and an increase of $3.2 million in expenses at same stores, mainly driven by $4.2 million, or 6.5% as compared to the prior year period, of higher personnel costs. The increase in store operating expenses was partially offset by underperforming retail stores that the company closed or converted to dealer locations.
Adjusted EBITDA for the second quarter was $86.2 million, an increase of $7.2 million, as compared to $79.0 million in the prior year quarter.
Same-store merchandise sales excluding cigarettes increased 3.8% for the quarter compared to the prior year period, and same-store merchandise sales increased 0.7% for the quarter compared to the prior year period.
Merchandise gross profit contribution grew by $6.5 million for the quarter, or 5.0%, on a same store basis, as compared to the prior year period.
“I am very proud of the results and performance that the employees of our company were able to achieve this quarter,” said Arie Kotler, chairman, president and chief executive officer of Arko Corp. “The team’s key focus is to improve our core convenience-store operations through targeted initiatives, like increasing assortment and merchandising mix to give our customers the options and convenience they seek.
“We always strive to provide the best service and store experience for our customers. We are very pleased with the pace of integration and early results of recent acquisitions. Arko’s results this quarter demonstrate that our organic initiatives and core M&A and integration capabilities help create long-term stockholder value.”
Based in Richmond, Virginia, Arko Corp. owns and operates numerous c-store brands, including Fas Mart, Shore Stop, Scotchman, BreadBox, Young's, Li'l Cricket, Next Door Store, Village Pantry, Apple Market, Jiffi Stop, Admiral, Roadrunner Markets, Jiffy Food Marts, E-Z Mart, 1 Stop, TownStar, ExpressStop and Handy Mart, among others.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.