Arko reports declining retail fuel sales amid Middle East conflict

Henrico County-based Fortune 500 convenience store operator Arko saw gasoline sales fall sharply during the first quarter as escalating conflict in the Middle East disrupted oil markets and fueled volatility in global gas prices.

The company reported last week in a filing with the U.S. Securities and Exchange Commission that its retail fuel gallons sold fell to 194.7 million during the quarter that ended March 31, down from 225.1 million gallons a year earlier.

Meanwhile, revenue from fuel sales dropped to $627.06 million, down 9.2% from $690.69 million in the same period in 2025.

Although Arko sold fewer gallons of gasoline during the first quarter, it earned more per gallon as the conflict involving Iran contributed to turmoil in global oil markets. The company said its fuel margin — the difference between fuel revenue and fuel costs — rose to 47.9 cents per gallon from 37.9 cents a year earlier.

“During the quarter ended March 31, 2026, global crude oil and refined product markets were impacted by heightened geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, Israel and the United States,” Arko wrote in its filing. “These developments contributed to volatility in crude oil prices and periodic supply disruptions, particularly related to the disruption of shipping through the Strait of Hormuz.”

Arko said higher wholesale fuel costs led to higher gasoline prices and wider swings in fuel pricing across many of its markets, ultimately boosting the quarter’s fuel margins.

While gasoline sales at Arko-operated retail stores declined, the company’s wholesale fuel business grew during the quarter. Fuel gallons sold at wholesale fuel supply locations increased to 198.4 million gallons from 191.1 million gallons a year earlier. Fuel margin at Arko’s wholesale fuel supply locations rose to 6.4 cents per gallon from 6 cents a year earlier.

Arko reported first-quarter adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $50.9 million, up 65.1% from $30.9 million a year earlier, while net loss dropped to $5.6 million from $12.7 million.

CEO Arie Kotler said winter weather disruptions negatively affected January and early February results, though trends improved as the quarter progressed.

In a statement, Kotler said March “was particularly strong” and that the company continues focusing on dealerships, loyalty initiatives, fuel pricing and cost discipline amid what he described as a “value-focused” consumer environment.

In February, Arko closed its initial public offering of fuel subsidiary Arko Petroleum and raised $183.2 million, although earlier in the month it said it was seeking a valuation of as much as $910 million in its U.S. IPO.

As part of an ongoing transformation strategy, Arko converted 41 retail stores to dealer locations during the quarter, bringing total conversions since 2024 to 450 sites. The company said roughly 75 additional conversions are either under contract, covered by letters of intent or already completed since the quarter ended.

Arko also warned that inflation and higher interest rates have reduced consumer purchasing power and could weaken demand if customers cut back on travel and spending.

In addition, the company said changes in U.S. trade policy, including tariffs or duties on imported products, could increase merchandise costs and delay store remodels or new convenience store openings.

The company said it still expects to generate $245 million to $265 million in adjusted operating earnings this year and anticipates making between roughly 42 cents and 44 cents in fuel profit per gallon sold.