Fed Governor Adriana Kugler to resign
Investing.com -- Shares of Arko Corp . (NASDAQ: NASDAQ:ARKO) tumbled 30% after the company reported fourth-quarter earnings per share (EPS) and revenue that fell short of analyst expectations, sparking investor concerns.
The convenience store operator disclosed a Q4 EPS of ($0.03), which was $0.05 below the analyst estimate of $0.02. Revenue for the quarter came in at $1.99 billion, missing the consensus estimate of $2.27 billion. This underperformance was a key factor in the stock’s decline, as it indicated weaker-than-expected financial health for the company.
In comparison to the same quarter last year, Arko Corp. reported a net loss of $2.3 million, a significant drop from the net income of $1.1 million it had achieved. The company’s full-year net income also decreased to $20.8 million from $34.6 million. Adjusted EBITDA for the quarter was down to $56.8 million from $61.8 million YoY, and the annual figure similarly fell from $276.3 million to $248.9 million.
The company’s merchandise margin rate did see a slight increase for the quarter, rising to 33.0% from 32.9%, and for the full year, to 32.8% from 31.8%. However, this was not enough to offset declines in other areas such as same store merchandise sales and fuel volume, which both fell by 4.3% and 4.4%, respectively.
Stifel analyst Mark Astrachan downgraded Arko from Buy to Hold with a new price target of $7.50, reduced from $8.50. Astrachan pointed out that "Both same store merchandise sales and same store fuel volume remain challenged, declining 4.3% and 4.4%, respectively, with each weaker than peers."
Looking ahead, Arko Corp. anticipates first quarter 2025 Adjusted EBITDA to be between $27 million and $33 million, with an average retail fuel margin ranging from 37.0 to 39.0 cents per gallon. The full year 2025 Adjusted EBITDA is expected to be between $233 million and $253 million, assuming an average retail fuel margin from 39.5 to 41.5 cents per gallon.
Despite these forecasts, the company’s stock was negatively affected by the current results and the cautious outlook for the near future. Arko’s focus on channel optimization, which includes converting 153 retail stores to dealer sites and planning around 100 more conversions in 2025, aims to yield a cumulative annualized benefit of operating income in excess of $20 million. However, the company has not provided guidance on net income due to the volatility of certain inputs that are not available without unreasonable efforts.
Investors reacted to these mixed signals, with the stock’s significant drop reflecting the uncertainty surrounding Arko’s ongoing business transformation and the macroeconomic challenges it faces.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.