Arko (ARKO) 7 May 242024 Q1 Earnings call transcript

Thank you. Good afternoon, and welcome to Arko's First Quarter 2024 Earnings Conference Call and Webcast. On today's call are Arie Kotler, Chairman, President, and Chief Executive Officer; and Rob Giammatteo, Executive Vice President and Chief Financial Officer.

Our earnings press release and quarterly report on Form 10-Q for the first quarter of 2024 as filed with the SEC are available on Arko's website at www.arkocorp.com.During our call today, unless otherwise stated, management will compare results to the same period in 2023.

Before we begin, please note that all first quarter 2024 financial information is unaudited.

may Securities statements XXXX. Litigation management of the call, Private the Reform this make within forward-looking meaning During Act of or review statements XXXX cautionary of and actual statements results future factors revise reflect information, our the made statements result at materially cause obligation the current Please end from events, to call differ the and forward-looking call respect forward-looking no a Arko that this this statements during to future could our on during release earnings with section update quarter forward-looking made to as otherwise. for call, under is made views events whether or various new first forward-looking of today.Any a on this basis. non-GAAP GAAP and On will on management call, a share operating both results those reported we those GAAP reconciliations accordance and XX-Q as financial use, adjusted adjusted on report as of for are for as in in non-GAAP earnings that Form results such in and our measures release income operating or our our EBITDA quarterly detailed with measures to Descriptions charges fuel I measures to and ended the Arie. calculated the profit will as share which segments our revenue, over fuel individual XXXX.Additionally, would business fuel like less management to year March along intercompany is now XX, exclude with quarter by call for GPMP.And contribution, costs, turn

managing remain on this as we performed focused afternoon.We expected controllable Jordan, you, us challenging first all thank and quarter the joining Thank in macroenvironment. and for you during this our

inflationary a throughout we that performance continue shared modestly to we see persisting consumer to trends hesitant March, in improved February adjusting While pressure.

we help the convenience opportunities continue guide navigate that us this believe these the store environment, offered are operational not to positioning microeconomic through by ourselves believe headwinds near-term are only resilient will to as implementing $XX.X aggressively we that for accelerate first to million organic XXXX announcement performance. transformation are growth.Turning industry.We the we the longer-term in generated We lay call. but plan implied We quarter last which above midpoint on EBITDA, foundation multi-year was we the the our to will the also shared range in the adjusted developing to of

our to efforts Although quarter, assortment excluding ongoing announce which up the significant modest made progress all mix strong same-store categories, X expansion, delivering our prior-year merchandising with stock, also our X.X% loyalty declined in growth margin on of destination acceleration over of REWARDS merchandising growth cigarettes.Additionally, drove sales a the offering. merchandise contribution our on of were core period.We to our X-year food the offset continued merchandise fas pillars same-store rate program, merchandise expansion they compared decline sales, prior-year and merchandise on

call expect the this to to improve to focus pillars on our drive to merchandise will strategy, utilize traffic we like initiating. larger central more and stores time efforts our changes structural remain to these would these profitability.While I on are We to

We wholesale XXXX We over on Wholesale retail we our focus last by converted form have last transformation plan our bolstered provided retail build more this conference is operating on some additional refining we call, the growth. leveraging segment. like added developing on on with off customers, will March on our this to over with period's that while one color we model.I XXX would into more our been now execute acquisition-driven give XX later fully stores, sites, going details network. Day years, our have shared it to a to Since proposition value Investor during resonates our our which than in lines kicked with complementary cardlock intend multi-year clearly time year performance our now the we expansion, unique multi-segment the of we last our XX-years, aggressive wholesale we be accelerating more XXX in referenced next X closing and and XX, this holistic developing our basis targeted are of towards store stores in stage between.Earlier a of core aggressively an Fueling network, through retail aggressive XXX segment acquirer to in Fleet in organic retail and our of XX of with strategy public opportunity the Retail off exist review our evaluate this a stores. businesses year, scale.We net more believe acquisitions our locations.Additionally, of within capital the business rapid significant strategic subsegments process allocation to Coming XXXX, plan and to

expect expanding this our working competitive stable share efforts are this XXX-degree customers. markets.With we with work, to a positioning more in for maintain consulting our support recognized pilot will options to our We to in grow firm nationally and investment different develop a offering for that markets and respect

of retail the new on mentioned rollout end about we to are focus call. help value customers ultimately design operations our service.The We advancing our learn our to food X make we traffic profitability.Finishing with proposition improve stores store X selectively one goal our footprint. focus the on a will allocation, with conference our pilot methodically our stores before of on that and construction investment the a meaningful an will region-wide stores capital of drive be leverage and what X base significant and us the last up of expansion to The along result in across with will regions our on enhance we customer within

weeks. aggressive strategic stores to across increasingly drive margin merchandise to elaborate, growth, top-line are with agreement is, required procurement dealer creating the work the expenses we Wholesale our matured has to seller I competitive notify agreement, we more insurers accordance we site strategic retail pricing and I number for day of the believe Full optimize the in preserving as a we to are updates profitability important nicely our $X.XX, our $XX as first We payment model, or our our line pricing We than closing expect opportunities Empire Wholesale dealer are pricing will for X.X to dynamics. with filings, sites a evaluating navigate to the March the we the meaningful was retail by agreement.However, VWAP closed we significantly million to originally capabilities have conversion become Xst, million quarterly $X.XX, will was G&A. Concurrently, which million.To and to for cost while we formula provided purchase total to around basis share segment cash sites that growth. believe and to on ongoing the we of there a in but in forward.Before investment believe I to confusion purchase the pay to operate to a moving these since hand focused we price plan the repurchase. to more shares segments.On accordance of On $XX.X over TEG locations public leverage and that in rate price as is to asset we stores, This support Rob, within sites.Converting competitive our acquisition offers at are TEG and NTIs the whether currently were share shares goods. subsequent February stores elected per we in details purchase off on our more issued in pay in more of on XXXX.As be which $XX network.We a our to installment the leverage we strategies of additional both our of our on and to also of deliver that of fully identified based segment, review would continuing site installment of dealer TEG scale focused retail address payments the reduce cash.Our for in at create in a Together March needs specifically deferred acquisition want zone sourcing calculation portfolio to scale retail can with in our the as there continue subsegments we to XX, experience the XXXX, provide expect corporate are underway, pricing satisfy more approach working liquidity and stores, was of in in match our operating on to we investments. stock we opportunity customer strategies found million procurement decline side, unique business shares the XX-day price price bottom aggressive capital believe registration purchase XXXX, with stock, different strategies we improve our following

announce turn $XXX price a allow stock. over our repurchase Today, quarter repurchased review deliver to Concurrently, our here under happy million. to underlying not and full-year $X.XX March shares remarks the we an program. value a payment note, of $XXX to before for continue per our million to Given like the second by long-term million.I'm business us, the program stock well expansion upon to reduced the on to payment quarter million XXXX prepared first our $XX now Board the TEG that of up results we after thanking were capitalize reflect touch the our of of million to questions on repurchase as Rob for will of in all I'm to believe On believe confidence but $XX.X we XXXX. remains of we seller a second quarter, XX in for with repurchase on we call if the does business.During the reached X.X the opportunity March has as thinking our that or share for for common of installment to the we finish unclear, to approximately stockholders. fully opportunity of of an our million agreement team their an repurchased existing and $XX.X any our approved financial work.I hard I'd that these shares to pleased due satisfy value originally total our to million our share $XX.X able take our price

right quarter results. XXXX Arie. Good you, everyone.Jumping Thank afternoon, first into

segment continued $X.X for total fuel in were Retail approximately in the increases contribution down gallons state-wide fuel merchandise significant segment range points. from and $XX.X income gaming closed X.X%, EBITDA X% elimination operating up year-ago retail of sales quarter EBITDA up earlier, on to in was total repair respectively, accelerated to merchandise related year-ago our workers with operating XXXX, related segment events.Moving was million hourly compared the $XX.X growth, XX.X period. X.X% fuel provided strong call. acquisitions operating expansion the with the operating quarter, period compared to fuel by on income and million for the for decline, income, wholesale million referenced sales compared down compares the and income approximately modestly rate to were merchandise comp same-store Same-store offset gallons driven points.Same-store to million margin gallon. regulatory our up This was contribution in with and increase adjusted implied $XX.X sales, contribution X.X down million down the was to of fuel was period, period, respectively, was fuel quarter, gallons year-on-year national elevated X.X%, million same-store decline period. year-ago X.X% sequentially fuel driven by were per which Despite $XX.X the merchandise was of the to from quarter CPG the the operating the in year-ago up quarter, of compared X.X gallons the year-ago the for million from Adjusted X.X% margin throughout XXX QX of operating XX sales and of improved $XX.X the X.X% expansion the sales which in quarter above income up Increases million gallon lower was prior-year gallon million stronger X.X%.Fuel million $XX.X wage maintenance, operating income Arie contributed and partially driven X.X%, down in were expenses.At merchandise down was segment, the with excluding margin in contributed for from retail level, million growth acquisitions.Gallon approximately our the reaching period.Total the compared year-ago over segment demand and the adjusted were month merchandise for variance for total was and year-ago reflecting the of Virginia Adjusted quarter for CPG basis of period, for period. benefiting midpoint same-store $X with million March. OPIS, by contribution lower and per CPG merchandise company As in to period, the Same-store $X.X the to CPG partially margin retail was $XX.X were underlying offset the contribution, adjusted to cigarettes, the by fuel basis up year-ago $XX.X expenses year-ago XXX $X.X the rate by which X.X%. claims in while quarter.Same-store contribution versus X.X CPG, rate last versus period. that quarter a

in a was our $X CPG administrative gallons share operating to in $X.X segment, year-ago faced quarter significantly prior-year company versus WTG $XX diesel general increase related quarter XX.X% the had on total the that fleet in loss for year-ago XXXX Please Arie was was period, period. press expenses for to a terms along comparison transformation the million the other adjusted CPG, by million we fuel period. was were quarter quarter million $X.X margin with for year-ago versus by elevated the retirement For XX year-on-year $XX.X for compared our with period. valuation $X.X million Adjusted performance, million to million earlier.Net challenging of $X.X to growth EBITDA.Turning at compared obligation $XX.X up remaining the lower of related the million to healthy acquisitions company The the closed in significant income favorable period, our current where from operating year-ago sheet. performance while year-on-year expenses was referenced by $XX.X compared TEG for warrants multi-year consulting to that and driven XX.X acquisition.Gallon in the with million purchase support prior-year interest offset margins.Total our income which, quarter total the with loss million the for the along the development was for of net the of $X.X to to the the for the primarily detailed plan.Net release reduction balance million financial driven reconciliation reference price, Arko's and

$XXX forward remaining to liquidity, first outstanding the availability activity. with ended on M&A comprised One billion, of this our $XXX total debt, remainder organic Oak is in Street sheet Capital outstanding reserved and related Excluding is our XXXX almost lines One our lease-related approximately real and to and million commitment manage has cash to the total Together $XXX quarter on of Capital the support $XXX senior approximately we million cash estate our more than liabilities, financing which undrawn We million.Turning capital equipment $X.X financing.Our for $XXX end, along million flexibility we we liquidity million operating ABL initiatives credit.Of maintained in needs primarily investment guidance. of Including line, attached M&A. on at growth remain notes, quarter our long-term line, with balance working adequate with completely ongoing substantial remains expenditures both as flow. balance capital, of the from our capital for comfortable to were that $XX.X hand quarter million, including

an to year-to-go I'll call, guidance XX average the for CPG for closing recent retail outlook million.As hand second higher adjusted in quarter, of end For fuel of referenced and XX guidance EBITDA our range maintaining most the million to million in for full-year million. EBITDA it $XXX total full-year of expect company-adjusted be to end on period.With our Arie remarks. XXXX, lower $XXX $XX corresponds total we a on company full-year of earnings the that, earnings $XX CPG range we And for the back range to to margin our range our are our in

a call the close of points key forward. inform like Thanks, our discussed framework this that on emphasizing Rob.I'd out to the by call few will going strategy

improving the believe decade, past as fully acquisitive leverage leaders to of the We operating growth our plan shareholder questions. the model later scaled up profitability our become strategic business, year.With are to organic to and network.We Day our more industry. it forward unique time convenience committed of has it the Over to been during unlock by one transformation and multi-segment now to we retail this look driving we value within value we will to is store focus the that, sharing our our embedded the further store open our in have right Investor

[Operator Instructions] Bobby from James. Our first comes with question Griffin Raymond

items, little ex little talk about X% first I Can lot I in the gather cigarettes. you wanted to sizing, of on that the a on your of here you're seeing a different geographies but right about there's across of negative comps what's merchandise some of now the core the is of kind economy, -- among bit us moving you're what customer? there know weakness kind from going basket anything help seeing a from of parts down talk customer? trade smaller bit kind the to

elaborate that then we But, I'll the QX a the bit, to maybe going we since pressure, I in. you business especially Sure, involve way think see I'll jump with lowest the see markets QX even that see probably low know, income. -- the let everybody Rob little is and though Q, challenge, microeconomic inflation all do in we QX,

trending by fuel, fuel, impact as us the that increase their that's help I Price people think, of of down. way, doesn't habit. basically, well.The yes, another So in purchasing are actually actually, price

reason people and actually that's spending think over think we I here. money, I that less So of the are one emphasize

to were in items, by to compensate margin I basically X-year mean, to actually and our we I increase points. minus margin we by the keep selling to the XX.X%, see looking basically excluding we as minute selling basis were from margin we a -- cigarettes. X% excluding last points about XX.X% can we with talking stack, same-store it as items. on I excluding to to you able on reason over see but were our over basically here, call were and cigarettes.Because able the able high that The finish cigarettes, sales, decrease high here, the XXX quarter are you're basis in X-year company-wide quarter stack, X.X% able for If the can increase basis XXX marginal it's actually you

our walk know is sure through every that you amount actually anything I to we $X.XX my promotion challenge, just the the working, of career. that over our value team But days people is one have that's we industry the in think the think this this sales smoking is of few door with initiative in years, but I I I resilient. launched you especially days can you in this that's tell that I of XXX you terms to of the that to, think to margin items.And ever valuable more into to here, I the the we increasing, softness show all summer. bringing now saw thing is industry. now So basically basically, again, think mean, of like issuing people I we we need that bring high valuable that across promotions and I retail that and summer, are the saying, just the something basically January, less, XXX in very marketing proposition continue and see know, right keep going now this reason mean, happened I pizza constantly don't for especially that make customers.And of ready for right

I anything I Bobby, see categories. just Yes, didn't add between significant the on,

where it's are transaction a issue think down. I transactions

macro more versus issue it's think that I a of we're assortment. So seeing

early time guys last or kind we kind out anything then, stacks. some the you the year? as about can we these are share maintain talked about it was of Just maybe plays trends? to how thinking mean, trying through had about That conversation the I and just And April last you of it of, aspects, May

half. first as to inflect positive a it the like of April start bit you second Yes, and know, started I saw weeks, it off in think, turn a couple the look, looked and we QX then little lot more

closely. a the we're think you we're trend kind But half I that, with in weaker first of of some of know, a the it bit acceleration again, months back the seeing what watching X stronger still half.So and was QX. in So it little tale off weaker was in

peak You imagine, at of you in selling but to at we'll this okay lot year more know, how we that got you as a point, days, we're positioned. next know XX know might the rest we've point season, with going be the the the feel

below trying the bit. had Rob, but, model And per margin, through at retail we're there to for yet guidance to in kind is flow because of haven't time numbers, up little gallon then something what offsetting in at our unpack is least all EBITDA the and of the with a come XQ a speaking. some came of I the fuel lastly, the model obviously line just cents new like, with and side

up So offsets I'm inside of you numbers worth other pressures thinking maybe any for there's OpEx -- is out know, some, there clean there as kind XQ we is calling ourselves? that or the more are

I Bobby, the that last the Yes, fiscal look, be results, would through we full shared, the call, base QX longer-term year said trend. right, QX 'XX that gallons X%, down the at on that we what for

X-year stack. are where period Our basing that year-to-go flat on we

behind to we going X have putting we saw and activity than through are meaningful and promotional of lot and albeit to pizza at in slightly down are a more sampling, XXXX, the what merch the QX the from CPG rest lower be we quarter.Did rate retail in first impact midpoint that Arie's expect increased margin CPG We to to quarter. share QX modeling the the rate we a third a way believe the point the second drive that's year, program for

what quarter in call lot's fourth February. talked in the about So from a in -- changed back first we not the

some So questions. of maybe on offline the other we'll chat

in what's just guess change I is -- like major it? Yes, OpEx guess modeling, any you the the I

up the total and company year. G&A OpEx modeling for We're low-single-digits

talked we the about. that's same And as

to luck unpack those best things. appreciate the quarter. was details, trying just in the second Perfect. here helpful. of Okay. That's I I

Fargo. next Bonadio Wells from with Anthony question Our comes

on of just gallon about at per that why sort a I margin So piggybacking range? Just right in guidance updated that you late, talk to getting the on QX little so you far what gas the you're Can to on in guidance, quarter question I maybe that's Bobby's $X.XX just wanted to dig seeing $X.XX bit. little still that's how thinking data, And thoughts industry of looking guess to is be number given would then year? margin on helpful? a XX% more any the constructive XX% you're the about dynamics for

Yes, be if year, saw predict, I I look, different were place. we think, against I up could look, second third I'd think, significant in the But which in a going and last quarters. acceleration

and and were we a the in third up quarters. against second Specifically, the $X.XX CPG $X.XX

So we quarter.We've can first encouraging down to things supported you as being ran $X.XX where But we be, midpoint year think modeling second, -- the $X.XX year, we mentioned, we're level $X.XXX first fourth $X.XXX, it at were from seen where what with expand recently we're last down and and it's some to and do third, a quarters. the things higher expect, to and the expecting the in look rack-to-retail, ran, $X.XXX in in I last quarter.

looking So of that's at things. how kind we're

think And way, our is thing remember one the the I by strategy. Anthony, to

from gallon $X.XXX same-store, $X.XXX didn't company-wide of to We change. $X.XX capture going were strategy know, Our extra to per you per gallon, basically versus an the $X.XXX. $X.XXX able

company-wide over over national here the penny OPIS very, to average basically So to here. trending an very we extra were to, close basically while able capture to

try very to going of course. to capture and competitive, continue be and So continue margin we're to

of ask there? And little looks we drivers And model just rest the the then wanted inside inside like a margins. Can that about as I some margins in just you bit ability more. of maybe a new sustain QX about how then the thinking dig year? It little to underlying record a was on you're the expansion on to

We're the as you details, not we margin. exactly about know, how providing got

the pizza, what the with categories. to important thing talking I basically just $X.XX I valuable we selling drive very we core as most it's high of more service kept say which food margin And remember, think beginning. decline, basically is is started, started, a We concentration. was we're cigarettes. about I kept over item, mentioned, continuation margin pizza I and that's here.And cigarette item about than that very, talking think just just the the

We are additional items to able Nathan getting our add into bakery stores. ready hot the dog stores. to launch XXX We were to

as long and marginal more more the as margin that's that's add drive doing to we to over we and and are what's we're high items, basically what that's continue going what focused up. So here,

where And we at we're that accretion service of drive point to just penetration to for we quarters. is forward clear, least, significant to Anthony, industry don't opportunity expect versus which We're modeling the the in continuing food not that but be think drive level we Arie's us the to think is.

question Our next Capital comes from Ben BMO Markets. Wood with

specifically can last share but a color pizza inside start the trends, from quarter, we'll with you incremental labor the this any there? point, of sales follow-up the at seeing, rollout store to you're wanted on shrink, little or I bit lift any

just, to very the with January, launched with any the results January, incremental basically, labor in football, pizza about value just the the become We launched This far. grown don't pizza mean, program, use week we And before program, basically. happy said, I we promotions. talking We're to offer high very a to I category just we the basically we're of to days for launched And going elaborate, said, a our We see like customers. moment. this at great it.It's since we third going we're you of the very pizza we're summer. use so strong XXX like the, know, I to pizza

pizza.And get are pack Pepsi, are you're going Pepsi, to of over XX CPG buy, packs you supported or pack when being X example, us supporting by promotions of of that For all a Company those here. the XX basically free

for drive So a of we drive believe the us moving that high all And the to the I here, see that, sell see to we drive over that's item marginal idea and and inflationary with sales pizza going very and pressure believe that. really more become forward. drive big is more across I

And walk in gears you bit. behind And little Can more to dealer retail in thought sites which address, you converting some benchmarks retain through the point? you can you bit spread or of what into get the between a know you said meaningful, your banners the, just little guys sites, this I sites? used on process know, specific sites of the what the then would are which you there some then of share to sites some sense color trying you the But switching a performance magnitude? were for Any retail is just at depth? versus a your us at it was markets would fleet? but maybe just convert

Sure. Sure.

First I a new just used is actually This something not maybe high this is all, basically something mention to that level, do we did. past. we the in to of for that, just

in are earlier, geographies that some we As mentioned I scale. converted less us attractive in past the have don't for or less-performing we stores

something fleet. in the goal organic was what, stores best growth and the is on is our think done to is drive call, I really this in mentioned something the best that and So concentrate on our stores this in the invest past.I the last goal, and

to challenge you the with firm, we really So hire working the know, us, know, part -- is of the the few some that to markets.So we our maybe them of few we've stronger little really basically consulting identified bit other about a months, in more are some some we and you reputable to and in us, firm don't a markets we over consulting is know, markets, as transformation idea to over bit them. know, you we have learn in of past to idea few the care so the scale take challenge for dealing, stores help our a been little months.And a some plan, very some the markets, them past a fleet, you

Some basically performing are, of the less the other. stores that than

those the impact those over stores we have we because provide don't on basically an sure advantage, what's some update I we wholesale versus moment, be a that determine we're of more have to of to ahead become money, are not them to G&A we're able return that those at our know doing of We're idea quarterly are of you of the the keep at to the to fuel going are on to us is know how going long-term We location. dealerize invest to of X,XXX volume. while stores to be is one there.And It's a with of guys day, dealer. control. every of that operating under We're money the those scale the retail decided believe stores fuel as customers we on still volume of capital because customers, that. but that.And dealers, given the We're in expenses actually is going going really wholesale the did over keep going dealerize and stores basically going to a past. make what upside to in to the here and still to we and that. we keeping arrangement and of lot remember, going able reduce amount here.We you as go basis, be didn't running end the a the on many we're some The basically planning to because just because platform location there the Remember, you stores because that reduce be some going potential just

Martinson next with from Our comes question Karru Jefferies.

also impact you the about and gross line margin pricing line? on that top margin When what's on talked to for drive both zone looking you're optimizing pricing, the the top

Yes. more Thanks this, and do stores. Investor folks in But customer who detail be today. the certainly lot a sharing into level for get of going the you matching pricing that there's the you of segments know as Day. various to can understand question. We're That's we not

So that's done with in need the to work perhaps our where of talking Arie more less and a promise, to and our, understand does brand customer.How a been terms customer. where price lot be we done what aggressive brand a has of again little was segment understand and that that type market delivery trying can research lower we with detailed customer our match of about on be

ones So environment. going more especially more it's think sensitive customers, to significant fleet-wide.And in it's inflationary cost are the impacted sense think is resonate a who going to to it's we our be, the being we something make opportunity

-- get going we items as come to of to be going more diving the the that's So we're Day, into. to Investor one one of to be

year, into guidance the for built is that you But have the that correct?

No.

So that's something -- capability.

quite of the Arie bit transformation, one program. mentioned, be as a of the there's So transformation the capabilities that would part capabilities as of

like -- had $XXX left $X buyback just about so on million. you Okay. And the it then million share I'm original the authorization, just on looked clear,

expansion is million program $XX is that original it brand new the $XXX $XXX So or from the million million? a

$XX million a expansion. It's

from with comes question Hale Holden next Barclays. Our

I had X questions.

is, flip does reduction wholesale them a maintain the to when retail you is expense? a dealerize G&A and inflow just or one company, to cash that stores first The in there simply result the in relationship,

something G&A. -- I carry mean, mean, of profitability. you don't I when have do both. increase to first you expense, all, you increase operating like don't you carry profitability, because you're you the don't able the the It's that,

basically over the flow it'll of here. it's So and -- will course, increase, increase profitability cash

may times, it attached And key be in there money many to also.

it's across board. the So favorable

of kind that's There key I a you back like can payment in to So cases? asking. was what some be

profit sure. Sure, selling fuel. basically related that may mean, of business. some day, some to that, we cases, we are be of the either way, to we or split when just it's the -- arrangement not rent I collecting the the going vast the consignment a actually I end majority to in still have the basically by clear, of know At basically we're

guys you'd is you it? that potentially expectation as of increase going would that you the about for we fund that's was, accelerate to to or that new you're format, this see cash flow, question think small operating out store grow, second borrowing My trial the doing

have liquidity I think we now. of right plenty

cash see You're flow you mean, probably going deal. using know operating to us for that. that's the I

question next Our Stifel. Mark with comes from Astrachan

to any the little a of on changes in-store of the softness? seeing more what and traffic the potentially there, sort That's bit is a you're ask sales, bit ticket, versus how just driving wanted I first question.

Yes.

earlier, force So little Mark, been the it's are a has transactions upside, been down, on bit transactions we're ticket seeing, offset by and again, the on downside. as the but average I mentioned driving

different I X order guess, prior the quarters maybe materially magnitude? X X quarters of the last, or over Is last that versus

of me of -- You're be we in for going analytics for just one could place, that to on new the terms you. something have that so up put for forgive we some to being in can follow

just if in is stuff out food store so tends a could just maybe consumer to then a how environment squeezing the prepared where on tougher us respond more dollars? little their macro bigger remind And the service sales, maybe in of question, picture you the bit

reason concentrating provide Well, I know really the think are items. that's We're That's I dogs. on bakery the concentrating chicken. on on value are That's we mean, that's concentrating you offering the the are are we basically reason we reason we over pizza. hot trying reason here. to

stores, We're basically the talk those that Forgot, value here. the to that, for this we for I you million drive a our over to keep for go chicken. over Because trying pizza for of up of Pepsi really for are we mean, that.Remember, our a we customers, for reason with about And And valuable day we our example, is to that, famous to to coming know, have bundled have stores. members looking what seeing example, great can getting know X-liter into think keep that. seeing customers. because people our what pick every this members but are and to you we you $X.XX. stores, that's actually opportunities, value promotions, today, course, those I is our didn't customers.That's really I mentioned, you provide X basically our those the people loyalty drive people if

size than basically XX% members. quarter, the just I average non-enrolled basically think greater that saw stores. into on And promotions, looking them transaction the were you're If driving in those we our this were enrolled loyalty

would which lastly, do into mean, bit go folks there those within you part focus how in from gallon a offering share bigger you're standpoint? a some of concentrated, maybe bit fared shift there competitors If from I bit of maybe a foods. number to away just wondering gas retailers, kind is just ask the And does be sort on versus you're a the you markets Anything of that your value I retailers, a stores? think seeing are fuel consumption it more where constrict and a markets, of traditional prepared of means part shopping little you from more could helpful? more standpoint, grocery whether your offer the towards grocery, are that locations shift compared of of of,

give that. a I'll So high-level answer you on

Okay.

you actually fact markets know, the many the that I that many, we are think operate where, actually areas are, that we are in grocer. rural we

mentioned promotion, and X.X%, question about way to that's going see no there not pricing. that we they the outside. So get for to is those we people that just better The around, average go is question a that very looking earlier, X.X% believe was is, actually the coming gallons idea the chance more and There's And valuable stores, our OPIS there actually close national as the reason were that into there. no other OPIS. good are minus it. down I But we people were -- I to

with for working We mean, food product the are great I cents inside promotion. are our trying of sales over a you that time gallons the to inside tie, there. every example, company sales, buy by to we storeYou get the way, a CPG some

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remarks. would We no at any this queue back further to for I questions presenters call to have like now over additional the in turn today's time. or the closing

great Really great Thank questions. for call. you, questions By of way, the the today. Thank Operator. you joining you very all guys, much,

that our have we initiative to us here, much here.I ahead are we're of into understand it's of can lot we investors big compelling a X:XX, give plan year. have over growth to after our story performance a we help do of as to insight ahead you Given this we trying what during trying that as us, tell over can

We are Have quarter. basically is summer, great guys afternoon, you we're day season, to the everybody. a talk towards next which looking XXX to of in and heading again forward our best

This program. today's conclude participation. for Thank your you does

time. any at disconnect may You