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Jun 30
Valvoline Q3 2025 Earnings Report
Valvoline Inc. reported strong third-quarter results with increased sales, profit, and store growth.
Key Takeaways
Valvoline Inc. delivered robust financial results for its third quarter, with sales reaching $439 million and a significant increase in income from continuing operations and EPS. The company also expanded its retail footprint by adding 46 new stores system-wide, demonstrating resilience in customer demand.
Sales for the third quarter reached $439 million, marking a 4% increase year-over-year, and a 12% increase when considering the impact of Refranchising.
Reported income from continuing operations grew by 18% to $57 million, with diluted earnings per share (EPS) increasing by 19% to $0.44.
System-wide store sales increased by 10% to $890 million, and system-wide same-store sales (SSS) saw a growth of 4.9%.
The company added a total of 46 new stores system-wide during the quarter, comprising 33 company-operated and 13 franchised locations.
Valvoline
Valvoline
Forward Guidance
Valvoline has narrowed its fiscal year 2025 guidance ranges, reflecting updated expectations while emphasizing the resilience of its business model for strong performance and long-term shareholder value.
Positive Outlook
- System-wide SSS growth guidance narrowed to 5.8% - 6.4%, indicating confidence in continued comparable store sales performance.
- Adjusted EBITDA guidance narrowed to $460 - $470 million, suggesting stable to improved profitability expectations.
- Adjusted EPS guidance narrowed to $1.59 - $1.64, reflecting a positive outlook on earnings per share.
- System-wide store additions guidance remains unchanged at 160 - 185, indicating continued network expansion.
- Share repurchases are projected at $60 million, demonstrating commitment to returning capital to shareholders.
Challenges Ahead
- The guidance ranges, while narrowed, still reflect a degree of uncertainty in the market.
- The company did not provide specific forward guidance on net income or GAAP EPS, focusing instead on non-GAAP measures.
- Capital expenditures remain substantial at $230 - $250 million, which could impact free cash flow.
- The report notes that miles driven were modestly down, which could pose a headwind for future growth.
- The company is unable to reconcile forward-looking non-GAAP financial measures to comparable GAAP measures without unreasonable efforts, limiting full transparency.