How does the company's inventory turnover and shrink rates compare to industry benchmarks? | ARKO (Aug 06, 2025) | Candlesense
ARKO

How does the company's inventory turnover and shrink rates compare to industry benchmarks?

Answer

The press release you referenced (ARKO Corp.’s Q2 2025 earnings announcement) does not include any specific figures for the company’s inventory turnover or shrink rates. Consequently, a direct comparison to industry benchmarks cannot be drawn from the information provided in that release alone.

Below is a structured approach you can use to obtain the needed data and evaluate ARKO’s performance relative to peers in the convenience‑store sector:

1. Where to Find ARKO’s Inventory Turnover and Shrink Metrics

Source What It Provides How to Access
Form 10‑K / 10‑Q filings (SEC) Detailed balance‑sheet and income‑statement line items, plus footnotes that often disclose inventory levels, cost‑of‑goods‑sold (COGS), and shrink (the difference between recorded inventory and what is actually on‑hand). Search the SEC’s EDGAR database for ARKO’s most recent 10‑K (annual) and 10‑Q (quarterly) reports. Look for “Inventory” in the balance sheet and “Cost of goods sold” in the statement of operations; shrink is sometimes disclosed in the MD&A or footnotes.
Investor presentations / conference call transcripts Management may discuss operational efficiency metrics, including inventory turnover (inventory ÷ COGS) and shrink (percentage of sales lost to loss, damage, theft, or miscount). Check ARKO’s investor‑relations website for slide decks or webcast recordings around the earnings release date (early August 2025).
Third‑party data providers (e.g., Bloomberg, S&P Capital IQ, FactSet) Calculated ratios for publicly‑listed firms, often including “Inventory Turnover Ratio” and “Shrink %” as part of the “Retail & Consumer” data set. If you have a subscription, pull the “Key Ratios” or “Operating Metrics” for ARKO (ticker: ARKO).
Industry analyst reports (e.g., IBISWorld, Euromonitor, NPD) Benchmark values for the convenience‑store industry, sometimes broken out by “average inventory turnover” and “typical shrink rates.” These reports are often available through corporate libraries or can be purchased.

Tip: If you locate ARKO’s Q2 2025 10‑Q, you can compute the ratios yourself:

  • Inventory Turnover = COGS (or Cost of Sales) Ă· Average Inventory (beginning + ending inventory ÷ 2).
  • Shrink Rate = (Reported Shrink ÷ Net Sales) × 100 % (if shrink is disclosed as a dollar amount).

2. Typical Industry Benchmarks for U.S. Convenience‑Store Operators

Metric Typical Range (2023‑2024) Sources
Inventory Turnover 9 – 14 turns per year (i.e., inventory is sold and replenished roughly every 26‑36 days). NPD Retail & Convenience Store data; Bloomberg “Retail – Convenience Stores” peer group.
Shrink (Loss) Rate 1.5 % – 2.5 % of net sales. The bulk of shrink comes from “cash‑in‑the‑drawer” loss, product breakage, and theft. National Retail Federation (NRF) “Retail Shrink Survey” 2023; IBISWorld “Convenience Stores in the US” 2024.

Why the ranges matter

- Higher inventory turnover generally signals strong demand forecasting and efficient replenishment, which is crucial for convenience stores that must keep fast‑moving SKUs (e.g., beverages, snacks) stocked.

- Lower shrink indicates effective loss‑prevention controls (e.g., better cash‑handling, tighter inventory reconciliation, loss‑prevention technology).

3. How to Compare ARKO’s Ratios to Benchmarks (once you have the data)

  1. Calculate ARKO’s Q2 2025 ratios using the method above.
  2. Place the results side‑by‑side with the benchmark ranges:
Ratio ARKO (Q2 2025) Industry Benchmark Interpretation
Inventory Turnover e.g., 11.2x 9 – 14x In‑line – suggests inventory is being replenished at a pace comparable to peers.
Shrink Rate e.g., 2.8% 1.5 % – 2.5% Slightly above – indicates a modestly higher loss; may warrant deeper investigation into cash‑handling or theft controls.
  1. Contextualize:
    • If ARKO’s turnover is below the lower bound, it could point to over‑stocking, slower sales, or supply‑chain inefficiencies.
    • If the shrink rate is above the upper bound, management may need to prioritize loss‑prevention initiatives (e.g., improved POS monitoring, employee training, tighter inventory audits).

4. Potential Follow‑Up Questions for Management

When you have the numbers, you might want to ask ARKO’s investor‑relations team (or probe the next earnings call) about:

Topic Sample Question
Inventory Management “What steps are you taking to improve inventory turnover, especially for high‑margin SKUs?”
Shrink Controls “Can you break down the primary drivers of shrink for the quarter (cash‑in‑the‑drawer loss vs. product loss) and outline any new loss‑prevention initiatives?”
Technology Investments “Are you investing in automated replenishment or AI‑driven demand forecasting to boost turnover and reduce shrink?”
Benchmarking “How does ARKO’s inventory turnover and shrink compare to your top competitors, and what targets have you set for the next 12‑months?”

5. Quick Recap

Point Status
Data in the press release? No – the Q2 2025 release does not disclose inventory turnover or shrink.
Where to retrieve the data? SEC filings (10‑Q/10‑K), investor presentations, Bloomberg/FactSet, or analyst reports.
Industry benchmarks? Inventory turnover ≈ 9‑14x per year; shrink ≈ 1.5‑2.5 % of net sales for U.S. convenience‑store operators.
How to compare? Compute ARKO’s ratios, place them against the benchmark ranges, and interpret whether they are “in‑line,” “above,” or “below” the industry norms.

Next Steps for You

  1. Download ARKO’s latest 10‑Q (Q2 2025) from the SEC and locate the inventory and COGS figures.
  2. Calculate the two ratios using the formulas provided.
  3. Contrast the results with the benchmark ranges above.
  4. If needed, reach out to ARKO’s IR team for clarification on any missing components (e.g., if shrink is not disclosed, ask for the dollar amount).

Once you have the actual numbers, you’ll be able to produce a precise, data‑driven comparison to industry standards. If you encounter any obstacles while pulling the SEC filings or need help interpreting a specific line item, feel free to share the excerpt and I can walk you through the calculation.

Other Questions About This News

How does the reported cash conversion cycle compare to prior quarters and peers? Are there any notable acquisitions, divestitures, or strategic initiatives disclosed that could influence future growth? What were the capital expenditure (CapEx) outlays this quarter and any impact on cash flow or future expansion plans? Did the company provide any guidance or outlook for Q3 2025 and the full‑year 2025 forecasts? What macro‑economic factors (e.g., consumer spending trends, inflation pressures) were highlighted and how might they impact ARKO's performance? Are there any significant changes in operating margins or cost structures that could affect profitability? What was the same‑store sales growth rate and how does it stack up against key competitors? Is there any management commentary on risk factors such as supply‑chain disruptions or regulatory changes that could affect the business? Did ARKO issue any updates on its dividend policy or share‑repurchase program? How did ARKO's revenue and earnings growth in Q2 2025 compare to analyst expectations?