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Mar 31, 2020
Valvoline Q2 2020 Earnings Report
Valvoline's Q2 2020 financial results reflected a strong start to the quarter offset by significant impacts in March due to COVID-19, with net income flat and adjusted EPS increasing.
Key Takeaways
Valvoline's second-quarter results showed resilience despite the impact of COVID-19, with a net income of $63 million and adjusted EPS increasing by 11% to $0.39. Sales declined by 2% to $578 million, but the company maintained a strong cash position and is focused on managing operations and maintaining financial flexibility.
Net income was $63 million, with EPS at $0.33, remaining flat compared to the previous year.
Adjusted EPS increased by 11% to $0.39, and adjusted EBITDA rose by 10% to $134 million, factoring in COVID-19 impacts.
Sales decreased by 2% to $578 million, while lubricant volume dropped by 6% to 41.7 million gallons.
Quick Lubes system-wide same-store sales grew by 0.7%.
Forward Guidance
Valvoline withdrew its previous guidance for the current fiscal year due to the uncertainty surrounding the ongoing COVID-19 impacts on the business. The duration and severity of these impacts remains unclear, and as such the Company is not providing guidance for fiscal 2020 at this time.
Positive Outlook
- Improving recent trends across segments as miles driven begins to improve with regions starting to reopen.
- Healthy cash position driven by actions to reduce operating costs and increase financial flexibility.
- Preventative-maintenance business model has performed well across previous economic cycles.
- Strength of balance sheet and competitive advantages of operations coming into the COVID-19 pandemic.
- Talent and endurance of people are providing a solid foundation for business today and position the company for the expected recovery to come.
Challenges Ahead
- More significant impacts expected in the current quarter due to COVID-19.
- Uncertainty surrounding the ongoing COVID-19 impacts on the business.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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