Arko Corp. (ARKO) 2025 Q3 法說會逐字稿

Greetings and welcome to the Arko Corp 3rd quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. If anyone should acquire operator assistance, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ashleigh McDermott, Vice President of Financial Reporting. Please go ahead.

Thank you. Good afternoon and welcome to ARCO's 3rd quarter 2025 earnings conference call and webcast. On today's call are Arie Kotler, Chairman, President and Chief Executive Officer, Jordan Mann, interim Chief Financial Officer and senior Vice President of corporate strategy, Capital Markets and Investor relations.

Our earnings press release and quarterly report on Form 10Q for the 3rd quarter of 2025 as filed Arko the SEC are available on ARCO's website at www.arcocorp.com.

During our call today, unless otherwise stated, management will compare results to the same period in 2024. Before we begin, please note that all 3rd quarter 2025 financial information is unaudited.

During this call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Please review the forward-looking and cautionary statement section at the end of our third quarter 2025 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today.

Many forward-looking statements made during this call reflect our current views with respect to future events, and Arco is under no obligation to update or revise forward-looking statements made on this call, whether as the result of new information, future events, or otherwise, except as required by law. On this call, management will share operating results on both a GAAP and a non-GAAP basis. Descriptions of those non-GAAP financial measures that we use, such as adjusted EBITA and reconciliations of these measures to our results as reported in accordance with GAAP are detailed in our earnings release or in our quarterly report on Form 10Q for the quarter ended September 30, 2025. Additionally, management will share profit measures for our individual business segments along with fuel contribution, which is calculated as fuel revenue less fuel costs and exclude intercompany charges by our subsidiary GPMP.

And now I would like to turn the call over to Arie.

Thank you, Ashleigh, and thank you all for joining.

Our team delivered a strong quarter of execution, staying disciplined and focusing on what we can control.

Stepping back, we're operating in an environment where consumers are still feeling stressed as reflected in consumer sentiment data throughout this year.

This has resulted in more deliberate shopping behavior, greater price sensitivity, and increased reliance on loyalty-driven offers.

These dynamics are consistent with what we're hearing across the industry, and they're shaping our approach, promotions, and value across our business.

It's important to recognize that consumer behavior is not uniform across a footprint.

We're seeing healthier trends in the northeast, southeast, and Mid-Atlantic, while in the Midwest and other select markets remain under pressure, reflecting broader regional differences in household budgets and fuel demand.

Industry feedback suggests these patterns are consistent across the channel, particularly in rural markets where store traffic remains under pressure.

Despite these headwinds, we are executing on our controllable to ensure our long-term opportunities remain intact. Our same store sales, excluding cigarettes for the quarter was nearly flat, representing the best comp performance we've seen in the last 18 months.

We continue to believe Arco's transformation plan will make our business stronger, more efficient, and better aligned with consumer trends.

Now I will provide an update on the core elements of our transformation plan beginning with deal erization.

Deal erization continues to be one of the most meaningful drivers of our plan.

Since the middle of 2024, we've converted approximately 350 stores as of September 30th, 2025 with an aggregate of approximately 185 additional sites committed for future conversion which are currently under a letter of intent or contract or have been converted since the end of the quarter.

The early performance from locations that transitioned 6 or more months ago continues to meet our expectations and validates the benefits of this approach both in reduced overhead and improved operating efficiency.

Behind this initial stores dealerized or under a letter of intent or contract, we see an additional opportunity to round out our dealerization strategy in 2026 with a meaningful number of conversions to come.

As we have stated before, once fully scaled, we expect this program to deliver a cumulative annualized operating income benefit of more than $20 million before G&A.

As our deal erization efforts continue, we have identified more than $10 million in expected annual structural G&A savings with the opportunity for additional upside.

As we continue to execute the deal erization program, we expect the benefits will increase and be further reflected in our financial performance and free cash flow generation moving forward, particularly given the savings for maintenance car packs. Deal erizations remain central to how we plan to drive more consistent return and long-term value creation for shareholders.

Fueling America's future campaign and fast rewards loyalty platform continue to play a central role in deeping customer relationship and driving engagement in our retail stores. These programs not only help us stay relevant with consumers who are seeking more value in every trip, they drive incrementally and provide a valuable lever which we believe can improve same store sales performance over time.

Average daily loyalty enrollment for our fast rewards program grew 37% in the quarter and 43% from the beginning of the promotion compared to the average daily loyalty enrollment prior to the campaign.

During the quarter we saw continued fast reward members grow, adding nearly 35,000 new enrollees to reach approximately 2.4 million total enrolled members at quarter end. Our enrolled customers spend approximately $110 per month, or 53% more compared to non-members, and pump to store conversion is at 55% of visit year-to-date for enrolled members. This engagement matrix reinforced the value of the program and highlight the behavioral differences that make fast rewards a key contributor to in-store performance.

As consumers remain increasingly value conscious, our loyalty program meets their demands for everyday savings and convenience while reinforcing Arco's relevance at the pump and in store.

During America's future, we remain an ongoing part of our value strategy into 2026.

While we've seen continued growth in loyalty engagement, we also recognize that total program penetration is still developing, creating a runway for future growth.

To build on this momentum, we plan to launch a new version of our app by the end of the 1st quarter of 2026. This platform will introduce enhanced technology and new benefits, including improved reporting, personalization, gamification, and geo fencing capabilities, just to name a few that we expect will deepen customer engagement and drive incremental traffic.

Our investment in other tobacco products and refreshed back bar layout also continued to drive positive results. Our OTP basket grew by approximately 16% compared to the same quarter last year.

OTP same store sales were up 6.6% as compared to the same quarter of last year, along with a margin rate increase of more than 300 basis points. Our redesigned back bars deliver better product visibility, and more modern presentation, and stronger promotions.

This initiative is a key highlight in our merchandizing strategy.

It's driving incremental traffic, higher margins, and improved category mix while allowing us to compete more effectively in a value conscious environment.

During the quarter we made steady progress on our store remodel program. Our first remodel location reopened earlier this year. One additional location opened in early August 2025, and a third location is planned for the 4th quarter of 2025, with several more that are moving through permitting and construction phases and are planned to open in the first half of 2026.

While only 2 of our new format stores are complete and operating, we are pleased with the results thus far.

The growth we are experiencing by category in these stores has been as planned and has continued to improve.

These new format stores are built around a food forward model that emphasize all grab and go breakfast, lunch, and snacking, bakery, pizza, and an expanded dispense, hot, cold and frozen beverages assortment, all supported by improved layouts and a better overall customer experience.

Turning to our new to industry stores, we continue to expand our presence through select and targeted opportunities.

We opened a Dunkin' store and two new to Industries stores so far this year.

And have begun working on 3 more NTI stores, of which 2 are targeted to open in the 4th quarter of 2025.

Our latest NTI location in Kingston, North Carolina exceeded our plan for the quarter with food and beverage contributing 23% of merchandise sales, which is multiples higher than the food and beverage contribution of our same store network.

These investments are focused on eye traffic, eye visibility sites where we can introduce the full Arko offering from fresh food to fuel and loyalty driven promotions supported by a modern scalable design.

Turning to fuel performance, our results reflected broader industry demand trends this quarter.

Our discipline pricing strategy and network optimization drove strong per gallon margin performance, allowing us to deliver solid fuel contribution even as gallons modestly declined. The quarter ended with the same gallon trend better than Q2, with September performance improving from August. Our approach remains consistent.

Prioritize profitability over volume and leverage our skill to capture opportunity when market conditions allow.

As the deal erization rollout continues.

We're also seeing the benefits of our more diversified and stable fuel contribution base across our retail, oral and fleet fueling channels.

Our fueling businesses remain strong contributors and key growth engines for Arcoization driven size conversion.

Have expanded our oral footprint, driving mid to high single-digit growth in oral fuel contribution.

The fuel distribution industry is highly fragmented, providing ample opportunity for acquisition given our size and scale.

Inflate fueling, disciplined customer management, and pricing supported stable margins and consistent volumes even amid softer industry fuel demand.

Looking ahead, we're advancing a number of new clog locations for 2026, reflecting the attractive recurring cash flow profile of this business and its growing role in ARO's long-term strategy.

We continue to see compelling value in our common stock and repurchase approximately 935,000 shares in the third quarter.

We have the flexibility to continue investing in our highest return opportunities dealerization, remodels, and strategic role in oils and fleet fueling while maintaining a balanced approach to shareholder returns.

Our priorities are clear, straining the balance sheet, execute on our transformation plan, and drive sustainable long-term value creation.

I will now turn the call over to Jordan to review financial results for the 3rd quarter and discuss our outlook for the 4th quarter and full year 2025.

Thank you, Arie. Good afternoon, everyone. Before I begin, I'd like to know that this is my first earnings call as interim CFO.

I'm grateful for the opportunity to step into this role and continue working closely with Ari and our leadership team.

Now turning to 3rd quarter 2025 results.

Adjusted EBITDA was 75.2 million for the quarter, slightly above the midpoint of our guidance. This compares to 78.8 million in the year ago period, with the decrease caused primarily by softer retail performance.

At the segment level, our retail segment contributed operating income of approximately 77.5 million compared to 85.1 million in the year ago period.

Same storm merchandise sales, excluding cigarettes were down 0.9% versus the year ago period, while total Sastorm merchandise sales were down 2.2%. Both showed sequential improvement from the second quarter.

Same store merchandise margin rate was up approximately 60 basis points versus the prior year.

The Same store of fuel contribution was down approximately 1.3 million for the quarter, with a 4.7% decline in gallons, partially offset by an increase of 1.$0.05 per gallon of fuel margin.

The same store fuel margin was 43.$0.08 per gallon for the quarter.

Gam store operating expenses were up approximately 1.8% for the quarter.

Turning to our wholesale segment, operating income was 24.1 million for the quarter versus $20.3 million in a year ago period.

The fuel margin was 9.$0.06 per gallon in line with the year ago period.

Gallons were up approximately 7.5% to the year ago period, driven by approximately 24.5 million incremental gallons from retail sites converted to dealers since the middle of 2024.

Excluding channel optimization, gallons were down approximately 2.7% at comparable wholesale sites.

We continue to be pleased with the impact of our channel optimization program, which has driven approximately 6.5 million in incremental operating income before G&A for the first nine months of 2025.

For a fleet fueling segment, operating income was 12.2 million for the quarter versus 12.6 million for the year ago period, with total gallons down 1.6% as compared to the prior year period.

Fuel margin for the quarter was 45.$0.08 per gallon, up from 43.$0.05 per gallon in the in the prior year period.

Total company general and administrative expenses for the quarter was $40 million versus $38.6 million for the year ago period.

The year over year increase in G&A was driven by a $1.7 million dollar increase in share-based compensation expense.

As we continue the dealerization of our company operated stores, we expect to see the favorable impact on our G&A moving forward.

Net interest and other financial expenses for the quarter were 20.1 million compared to $23.6 million in the year ago period.

With the decrease primarily related to lower average interest rates in the 3rd quarter of 2025 and a decrease in fair value adjustments primarily related to our warrants.

Net income for the quarter was 13.5 million compared to the net income of $9.7 million for the year ago period. Please reference our press release for a detailed reconciliation of net income to adjust the EBITDA.

Turning to the balance sheet, excluding lease-related financing liabilities, we ended the third quarter with $911.6 million in long-term debt.

We maintain substantial liquidity of approximately $890 million including approximately $307 million in cash on hand at quarter end.

Along with remaining availability on our lines of credit.

Total capital expenditures for the quarter were $24.9 million.

Looking at our guidance for our fourth quarter, we expected just at EBITDA to be in the range of $50 million to $60 million.

This guidance is based on the following key segment assumptions. First, for a retail segment.

We expect our Q4 2025 average retail store count to be approximately 1,150 sites.

On a per store average basis, we expect merchandise sales to be up low low to mid single-digits, reflecting the higher productivity of our retained stores versus the year ago period, partially offset by same store merchandise sales performance, which is positioned down low to mid single-digits.

Again, on a per store average basis, we expect gallons to be at mid single-digits, reflecting the higher productivity of retained stores versus the year ago period, partially offset by same store gallon performance, which is positioned down mid single-digits.

We are modeling total retail fuel margin in the range of 42.5 to 44.$0.05 per gallon.

For our wholesale segment, we expect mid-teens operating income growth driven by our ongoing channel optimization work.

For our fleet fueling segment, we expect operating income growth to be down mid to high single-digits, driven by gallons roughly in line with the prior year on a lower cents per gallon compared to the elevated environment last year.

Turning to the full year, we are updating our adjusted EBITDA guidance to a range of 233 million to 243 million.

This updated range reflects our performance year-to-date.

With that, I'll hand it back to Ari for closing remarks, Arie.

Thanks, Jordan.

I'm proud of the way our team continues to execute to a challenging environment.

We maintain disciplined, manage our controllable, and stay focused on the long-term transformation of our business.

As we look ahead, our priorities are clear.

Complete our deallarization program.

Continue driving loyalty led engagement and execute the next phase of our growth strategy.

We're entering the final quarter of the year with focus, momentum, and confidence in the action we're taking to position AO for 2026 and beyond.

Operator, please open the line for questions.

Thank you. Well, now we conduct a question-and-answer session. If you'd like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment please while I pull for questions.

Thank you. Our first question is from Bobby Griffin with Raymond James.

Good afternoon, buddy. Thanks for taking the questions and Jordan, congrats on the appointment.

Thank you, Bobby.

I guess first I wanted to talk a little bit about the store remodels. You gave out an interesting stat there about, I believe, the merchandise side of things and the food service popping up as a percentage of sales. What is the opportunity or what's the pathway to kind of accelerate this? When you look at 7 stores on your store base, it's pretty tiny. So how can we accelerate this and kind of what's the time frame along that, given that you're seeing some good results from the early.

Pilots. Sure, good afternoon, Bobby.

Well, we started with 7 stores, and as I mentioned earlier, we are already working at the moment, increasing the amount of stores in the region that, we're working on the 7 stores at the moment. We are seeing encouraging results, no question about it. We mentioned the food service, so the NTI that we opened in Kingston out of the gate just exceeded, the 20% food and beverage mix target that you know that was our target, as long as those stores performed, for the 1st 12 months, but for some reason this store really exceeded the performance. Because of that, we are working on additional stores that will come along immediately as we complete the 1st 7 stores. We're already working on identifying those stores, and I'm assuming that that's going to be probably another 2025 stores that will come on board immediately after the seven.

But the name of the game, of course, is going to be Food Service, and coal categories. This is really, what we are going to concentrate going into 2026.

Okay, and I want to maybe switch gears and hit on the dealerization aspect a little bit. I believe you disclosed 185 more under letters of intent, and then you think there's an opportunity to continue some of this work in 2026. I mean, without putting a number out there of how many potential stores, I'm just curious, when you look at the book of retail stores that are not up for deal erization that you will keep when you're ultimately. Done with this work, what is the difference in those stores' performance on a comp basis because investors do have concerns here about the same store sales of the retail network, and I know there's a lot of things moving around. So if you could share anything on gallons or merchandise or even CPG of what the potential portfolio looks like versus kind of what the results we're seeing now, that'd be helpful.

Yeah, I cannot, comment in particular on the stores, but what I can say is that, we are targeting on stores that, we actually can have economy of scale, in the script I mentioned earlier that there are some differences between, region in the country. You know they are like the, if you're looking at different regions in the country, we feel that the northeast, southeast, and mid-Atlantic states, those are the areas that, we have a large economy of scale, the market, is being, from a. From the economy standpoint, from the, volatility in the market, we feel that there is a lot of opportunity for us. I mean, that's the reason we started the seven stores, pilots in the Mid-Atlantic states in Virginia, and we believe that those are the stores that we're going to continue to grow in this part of the country.

We're just seeing better results from the same store sales from gallons, from margin. Core categories. I mean, we just see, great results in those parts of the countries and those are the areas that we would like to invest more and get more out of them.

But I think the Yes, go ahead.

I'm sorry. No, go ahead. No.

I think the most important thing about dealerization is, there's a few things that I would like to maybe reiterate on this call, we took, meaningful amount of stores, we're converting them to basically to dealer. We are increasing the segment, we have the wholesale segment and the fleet segment, but we're increasing the wholesale segment and not only that we see, also increasing EBITDA.

In those, basically moving from retail to wholesale.

The conversion to cash flow is also much higher. I just want to remind you that you know we spend on a store about 2000 to $25,000 for basically for maintenance CapEx. That's what we usually spend in, roughly per year. So if you think about it, we're talking about 550 stores that we are converting from basically from retail to dealer, not only that we're talking about a $20 million or so. In EBITDA uplift, we're also talking about spending less money on maintenance CapEx, the number is just quoted right now, it's probably between $15 to $20 million just on CapEx that all of a sudden we're not going to spend over here. And like I said, the conversion, when you move those stores from retail to wholesale, the conversion to, free cash flow, it's much higher.

And I think that's something that we need to point on this call because cash flow is very important for us as we move along.

Yeah, that makes sense. And I guess I just lastly from me, Ari, and you're prepared to march, you called out the fleet fleet card segment as an area for some new location growth in 26. Just curious if you can unpack that opportunity a little bit more. Where do you see like how big of white space do you see there? Is that all organic or is there opportunities for tucking M&A there again? I just curious kind of what that opportunity could look like over the next couple of years.

I'm talking about building additional sites. As this, the lit segment, it's very fragmented. There's not a lot of companies like us that are operating in this arena.

I think we are one of the largest one in the country, we have today 280 sites.

We see a lot of opportunities in the market that we operate and outside the market we operate just for your benefit to build a co log, it's anywhere between a million dollars to $2 million. That's the cost to build a colog versus when you build a new industry store, you're talking about 6 to 6 to $8 million. The card log it's much, I'll call it less expensive on one end and on the other end it's also from an operating standpoint. I mean, it's unmanned.

It's unmanned and as you can see, we operate those, we operate the 280 card logs, we enter into this in 2022. We generate a lot of cash, a lot of free cash flow from those assets, and we just see that this is another great opportunity for us, to increase the amount of co logs that we operate. We already identified 5 and going into 2026, we identified 5, and the idea is to build more into 2026. I mean, as I said, currently we found 5 that we are actually tackling at the moment. And the same thing goes, by the way, to the wholesale segment as you can see right now, we're spending a lot of time moving stores and configuring, the best way to position our company and also continue to be also a great opportunity for us.

Thank you, Arie.

Thank you, Jordan. Best of luck here in the 4th quarter.

Thank you very much, buddy.

Now our next question is from Benjamin Wood with BMO Capital Markets.

Hey, good afternoon, guys, and this is Ben on behalf of Kelly Beania and BMO and congrats, Jordan as well.

Wanted to start with the improvement on, some of the organic metrics you saw sequentially, wondering if you can help frame how much of that improvement was, better store trends versus benefiting from having maybe a better performing or more efficient store base as a result of the deal erization.

Sure, I will start with some remarks and then I will let maybe Jordan jump in if you have anything else to add. So, I think the performance that you see, not only that, I mentioned that this quarter was probably one of our best quarters for the past 18 months, from a trend standpoint, but it's not only that the sales like cigarettes were almost flat compared to prior year. I think it's really all about. The things that we did in 2025, we started with OTP. You saw what happened to OTP. OTP was basically up 6.6%, margin improvement of 300 basis points. In addition to that, we basically outperformed in many categories like candy, packbad, for example, and those categories are the categories that are really driving the margin up. So it's not only that the performance is better, it's also that the mix that we are having over there, it's a better mix. The mix drives the margin up.

And like I said, I think we started the OTP at the beginning with the backboard, then we went to Fueling America. I think the loyalty platform that we have with the Fueling America campaign that we have, we are selling right now items that you actually have a high margin, and on the top of it, of course I mentioned OTP, but OTP also drive traffic.

So I think between the back bar investment and the fueling America investment along with loyalty, that's what really would drive the result and I think right now you see, you start to see more and more and more quarter after quarter, you start to see that the results are just improving. And you can, like I said, you see it in margin. I mean, we increase margin again this quarter and, quarter after quarter, we continue to increase margin, and I think this is, that's all because of those promotions that we are having out there.

Yeah, then the only thing I would add is, if you look at, the prepared remarks and the guide from last quarter, we talked about, same underlying same store sales and same store gallon trends, and on an average per store basis we were roughly in line with what we guided, which means to me that the productivity of those stores was in line with what we expected, if not a little bit better.

So you are seeing the benefit from higher productive stores in that in that base of stores that we've retained.

Great, that's helpful and just as a as a quick follow-up on that, are you able to give any details on kind of the monthly cadence and how things are looking quarter to date? I know we started, July off pretty strong, I believe we talked about, but how did the rest of the, quarter end up as far as cadence?

Well, I think July was very strong. I think August declined a little bit, and I think September start to come up. So it's really, like I said, I think overall the quarter was a good quarter.

Unfortunately, August was a little bit lighter than July, but as I said, September start to come back, a little bit better.

And that's how we end up, like I said, that's how we end up the the quarter with, very close to flat on cells excluding cigarettes, at the same time you probably saw we also were able to, get a higher CPG over here, during this quarter. I mean our CPG is 2.$0.03 better than prior year.

That's great. And then, Ari, you give a lot of color on on the work you're doing to drive the gross margin expansion and it and it continues to come.

In above, at least our expectations, I just wanted, how should we think about where the upper limit is of your gross margins, and it sounds like it's all benefiting from promotions, but are you still as competitive on your pricing across the store, just the sustainability of margins.

Please.

Yeah, we continue to be competitive. I think the margin increase is really from, the heavy promotions that we're doing with our vendors, and I can tell you that, we started fueling America with, 10 amount of vendors. And as we start to show results and as we start to show those vendors how they can actually grab market share, more and more and more and more suppliers have decided to basically to join the program. I can tell you that going into 2026, Fueling America is going to actually continue to be one of our top promotions.

And I think that's what you see over here, it's really, all of those promotions are supported 100% by our vendors. I mean, they see the results and then that's why they're participating. So I think the, we believe that, this is sustainable, the improvement that you see over here, there is a lot of work put into it. I want to be very clear. This is something that our category managers and our You know team is working really hard, to put those programs together and like I said, we expanded merchandise margin in, multiple consecutive quarters and I believe this is sustainable and we're going to just continue to improve it as we move along with those promotions.

Thank you guys.

Best of luck.

Thank you, Ben.

Thanks, Ben.

Thank you. Our next question is from Daniel Guglielmo with Capital One Securities.

Hi everyone, thank you for taking my question. Just following up on the various capital spend projects, so remodeling stores, new NTI retail, and new NTI card lot, is there one of those project types that you think offers the best returns right now, and how do you think about CapEx allocations for each into 26 and 27?

Daniel, we started with those 7 stores, and we spend, we say on average we spend around a million dollars, a million won on those stores, we throw a lot of things into those stores to make sure that, we concentrate on food service, as we move along into 2026 and as we add more stores, the idea is really to scale it.

Moving forward, so to adjust cost and scale the price, scale the cost, moving forward. In addition to that, of course our focus remains on maintaining, flexibility, to deploy capital towards high return opportunities.

So, the 7 stores, it's not significant, but as we move along over here, we're measuring, return on investment on each and every capital project. And the ones that we feel will actually provide us the best return, those are the ones that we are going to utilize. That's one of the reasons I mentioned earlier, converting over 500 stores eliminates approximately 15 to 18 to $20 million in maintenance caps, and when you have this, free cash available that can help us to invest in some of the other projects, to increase our return.

Great, yeah, I appreciate that, and it actually segues into my next question. So I know that the majority of the dealers that take over the converted retail stores are are mom and pops. In this difficult consumer environment, has their appetite for taking on conversions changed at all? And then maybe you can just remind us why these dealers can take on the lower margin properties and still make the economics work for their.

Businesses.

I don't think it's the lower margin, by the way, Danielle, it's not in particular the lower margin. It's, we have decided to take stores that do not meet our, return on investment criteria. We have decided to take stores that are, in areas that we don't have maybe a large concentration.

And at the end of the day, if you're looking on this industry, I'm like I said, I'm here from 2003, 22 years, the amount of mom and pop stores in terms of percentage didn't really change. I mean, 20 years ago it was, I don't know, 65-70% of the stores in the US were mom and pop, and if you're looking today, it's exactly 65-70% stores are still mom and pop. You know those guys are very entrepreneurial. They concentrate on one or two stores, they spend all of their time in the store. They, they're coming up with many ideas that they can add to the stores, which we can't, as a large company, I can tell my guys just to sell different types of foods in different stores and different, basically in different regions. I mean we have to be very consistent. Those guys are, like I said, are very entrepreneurial and they know how to make things better, in some areas, and that's why they're very successful. And that's why there's still 65, 70% of them are mom and pop.

Great, thank you. I appreciate that color and the clarification. Thank.

You.

Thank you.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Ariotler for any closing comments.

Thank you very much everybody for participating this evening in our earning call. I wish you guys all the best and happy holidays ahead of us.

This concludes today's conference. You may disconnect your lines at this time.

Thank you for your participation.