ARKO Converts 450 Retail Stores to Dealer Locations

Conversion progress

ARKO revealed in its latest earnings report that it has converted 450 total retail sites to dealer locations since beginning its company-wide transformation plan in 2024.

In the first quarter of this year, the company converted 41 locations and has 75 additional sites committed either under letter of intent, under contract or already converted since the quarter ended.

The next conversions are expected to be completed by the end of this year.

“The company continues to expect that, at scale, its channel optimization will deliver a cumulative annualized operating income benefit of more than $20 million, before general and administrative expense savings,” ARKO noted in the report.

Additionally, the company has identified more than $10 million in expected cumulative general and administrative expense savings with an opportunity for upside as it continues to execute the site conversion strategy in 2026.

Financial results

“Our first quarter results reflect both strong execution and the structural progress we have been making across the business,” said Arie Kotler, chairman, president and CEO of ARKO. “Adjusted EBITDA increased approximately 65% year-over-year, same-store merchandise sales excluding cigarettes returned to growth, and same-store fuel gallon performance was the strongest we have seen in two years. While weather disruptions negatively affected January and early February results, trends improved as the quarter progressed, and March performance was particularly strong.

We believe these results reflect the work we have been doing across dealerization, loyalty, fuel pricing, merchandising and cost discipline, while also demonstrating our ability to deliver value in a consumer environment that remains economically pressured and value-focused.”

As ARKO continues its conversion strategy, it is also growing its store network with two new-to-industry (NTI) retail stores and one NTI cardlock location opening in the first quarter. It also remains on track for three new Dunkin’ stores and one NTI retail store in 2026, as it targets 20 NTI cardlock openings in 2026 and approximately 25 remodels.

Growth initiatives

On the loyalty side, the company relaunched its app on a new technology platform and rolled out innovative campaigns like Fueling America’s Future, fas REWARDS, the $10 enrollment campaign and 100 Days of Summer.

This emphasis on operations has led to positive returns for ARKO. While the company saw a net loss of $5.6 million in the quarter, it is trending upward when compared to the corresponding quarter last year when it reported a net loss of $12.7 million.

Its adjusted EBITDA for the quarter is also up compared to last year, increasing 65.1% to $50.9 million. Retail same store fuel margin for Q1 increased to 48 cents per gallon compared to 38.7 cents per gallon last year, while same store fuel contribution increased approximately 20.1%.

Notably, the company’s subsidiary, ARKO Petroleum Corp. (APC), completed an initial public offering (IPO) in Q1 for total net proceeds of about $206.8 million. The company owns 35 million APC shares, representing an implied value of approximately $650 million.

“With APC now public, investors have greater transparency into our wholesale, fleet fueling and GPMP businesses, and we believe the APC structure enhances financial flexibility and highlights the value embedded across our portfolio,” continued Kotler. “As we move through 2026, we remain focused on disciplined capital allocation, continued dealerization, high-return growth opportunities such as cardlocks and retail NTIs, and building long-term value through consistent execution across all segments.”