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Sep 30, 2022
Valvoline Q4 2022 Earnings Report
Valvoline's Q4 2022 financial results were released, revealing a mix of positive and negative performance indicators.
Key Takeaways
Valvoline's Q4 2022 results showed a decrease in reported net income and EPS, but an increase in adjusted EPS and adjusted EBITDA. Continuing operations sales increased, but reported net income decreased significantly. System-wide same-store sales increased, and cash was returned to shareholders through dividends and share repurchases. The company also announced a $1.6 billion share repurchase authorization.
Reported net income decreased by 7% and EPS decreased by 4%.
Adjusted EPS increased by 20% and adjusted EBITDA increased by 18%.
Continuing operations sales increased by 14%, but reported net income decreased by 90%.
System-wide same-store sales increased by 9.2%.
Valvoline
Valvoline
Forward Guidance
Valvoline expects to continue driving same-store sales growth and expanding its network of stores. They anticipate 14% to 18% top line growth and adjusted EBITDA to grow 17% to 24% to $370 million to $390 million as margin leverage improves in fiscal year 2023.
Positive Outlook
- Continue driving same-store sales growth by winning new customers
- Continue driving same-store sales growth by expanding average ticket
- Continue expanding our network of conveniently located stores
- Renewed focus on franchise development over time
- Business is resilient, highlighting the non-discretionary nature of preventive maintenance and positioning us well for future growth
Challenges Ahead
- Valvoline is unable to reconcile these forward-looking non-GAAP financial measures to the comparable GAAP measures estimated for fiscal 2023 without unreasonable efforts
- Currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact these GAAP measures in fiscal 2023 but would not impact non-GAAP adjusted results.
- Capital expenditures $170 —$200 million
- Adjusted effective tax rate 25.5—26.5%
- Adjusted net income$160—$180 million