ARKO Corp. has announced its financial results for the third quarter of 2023, which ended Sept. 30.

Key Highlights

• Net income for the quarter was $21.5 million, compared to $25.0 million for the prior year quarter.
• Adjusted EBITDA for the quarter was $91.2 million, compared to $99.5 million for the prior year quarter, primarily due to reduced fuel contribution at same stores, with retail cents per gallon (CPG) of 40.3 in the current quarter compared to retail CPG of 44.8 in Q3 2022.
• Same store merchandise sales excluding cigarettes increased 1% for the quarter compared to the prior year period; same store merchandise sales for the quarter increased 0.1% compared to the prior year period, and were impacted by approximately $2 million in increased loyalty investments in customer acquisition related to expanding membership in the fas REWARDS loyalty program, other loyalty promotions and growth in the total loyalty membership base — a long-term goal of the company. This caused a reduction in same store merchandise sales of approximately 0.4%, and same store merchandise sales excluding cigarettes of approximately 0.6%.
• Merchandise gross profit contribution grew by $21.8 million for the quarter, or 15.7%, as compared to the prior year period.
• Merchandise margin expanded, increasing approximately 50 basis points to 31.7% for the quarter compared to 31.2% for the prior year period, due to execution of key marketing and merchandising initiatives.
• Total retail gallons increased 14.8% in Q3 2023 compared to Q3 2022.

Other Highlights

• The company closed its 25th acquisition, marking five closed acquisitions since the beginning of Q3 2022, increasing the total number of locations by approximately 720.
• Added more than 365,000 enrolled fas REWARDS members during Q3 2023, while offering a special $10 enrollment promotion commencing in mid-May 2023 through September 2023. As of the end of Q3 2023, the company had 1.85 million total enrolled fas REWARDS members, representing a 50% increase in enrolled members since the end of Q3 2022.
• Announced the expansion of the executive ranks at its subsidiary, GPM Investments, with the hiring of Richard Guidry as GPM’s senior vice president of food service, who was hired to expand its food strategy.
• Current available liquidity for future acquisitions of more than $2 billion, including cash, lines of credit and availability under the Oak Street program agreement.

“I am very pleased with our third quarter performance, which we believe compares favorably to what was a strong prior year quarter,” said Arie Kotler, chairman, president and CEO of ARKO. “In the third quarter, our entire team continued to execute on our three key marketing and merchandise pillars, including significantly expanding the number of enrolled members in our fas REWARDS loyalty program, which we designed to enhance our relationship with our customers and provide them with extraordinary value. We continue to implement the ARKO way in the five acquisitions closed over the last year, adding merchandise assortment and growing sales in these stores’ core destination categories while capturing synergies. Our retail fuel margin was lower than the prior year quarter’s elevated fuel margins, which we expected, and we continue to execute our strategy of optimizing retail fuel gross profit dollars.”