In This Article:
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System-wide Sales: Increased 11% to $826 million.
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Same Store Sales Growth: 5.8% for the quarter.
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Total Net Sales: Increased 11% to $403 million, adjusted for refranchising.
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Adjusted EBITDA: Increased 6%, including refranchising impact.
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System-wide Store Count: 2,078, up 8% over the prior year.
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Net Sales Growth: 4% on a reported basis, 11% adjusted for refranchising.
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Gross Margin Rate: Declined 30 basis points to 37.3%.
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SG&A as a Percentage of Sales: Increased 150 basis points to 19.3%.
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Adjusted EBITDA Margin: 25.9%, a 110 basis point decrease over the prior year.
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Adjusted Net Income: $44 million, a 3% increase considering refranchising.
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Adjusted EPS: $0.34 per share, a 3% increase considering refranchising impacts.
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Net Debt: Increased $44 million during the quarter.
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Leverage Ratio: 3.4 times on a rating agency adjusted basis.
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Share Repurchases: $21 million in Q2, $60 million year-to-date.
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Valvoline Inc (NYSE:VVV) reported an 11% increase in system-wide sales, reaching $826 million, with same-store sales growth of 5.8%.
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The company successfully added 33 net new store editions in the quarter, bringing the year-to-date total to 68, and announced plans to acquire approximately 200 additional stores through the acquisition of Breeze Autocare.
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Valvoline Inc (NYSE:VVV) has implemented strategic initiatives such as transitioning its customer and marketing database to the cloud, enhancing marketing efficiency and personalization.
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The company reported a strong customer satisfaction rating, with customers rating Valvoline Inc (NYSE:VVV) at 4.7 out of 5 stars based on over a million surveys in the past 12 months.
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Valvoline Inc (NYSE:VVV) has maintained low attrition rates and moderated wage inflation, indicating effective talent management and operational stability.
Negative Points
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Gross margin rate declined by 30 basis points year over year to 37.3%, primarily due to de-leverage on product cost and store expenses.
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SG&A as a percentage of sales increased by 150 basis points to 19.3%, driven by the impact of re-franchising and technology investments.
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The adjusted EBITDA margin decreased by 110 basis points over the prior year, reflecting challenges in maintaining profitability.
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The refranchising transactions have created near-term comparison challenges, impacting financial comparisons and contributing to SG&A de-leverage.
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Valvoline Inc (NYSE:VVV) faces potential cost increases due to tariffs, with an estimated operating cost impact of less than $4 million system-wide for fiscal year 2025.