Valvoline Inc. Delivers Robust Q4 and Fiscal Year 2024 Results, Extending its Streak of Success
LEXINGTON, Ky., Nov. 19, 2024 – Valvoline Inc. (VVV), a leading provider of preventive automotive maintenance, today announced its financial results for the fourth quarter and fiscal year ended September 30, 2024. The company reported exceptional performance across key metrics, showcasing its continued strength and market leadership. All comparisons in this release are to the same period last year unless otherwise stated.
Fiscal Year 2024 Highlights: A Year of Consistent Growth
Fiscal year 2024 proved to be another year of remarkable success for Valvoline. Sales from continuing operations surged 12% to $1.6 billion, fueled by a 6.7% increase in system-wide same-store sales (SSS). This marks the company’s 18th consecutive year of system-wide SSS growth, a testament to Valvoline’s enduring appeal and operational excellence. The company also expanded its store count by nearly 9%, bringing the system-wide total to a robust 2,010 locations.
This impressive sales growth translated into significant bottom-line gains. Reported income from continuing operations rose 8% to $215 million, resulting in a 33% increase in earnings per diluted share (EPS) to $1.63. Adjusted EBITDA, a key indicator of profitability, jumped 17% to $443 million, with the adjusted EBITDA margin improving by 100 basis points to 27.3%. Further demonstrating confidence in their performance, Valvoline returned a substantial $227 million in cash to shareholders through share repurchases.
Q4 2024: Navigating Challenges and Maintaining Momentum
The fourth quarter also witnessed solid growth despite challenges including the Crowdstrike outage and hurricanes. Sales from continuing operations climbed 12% to $436 million, driven by a 5.4% increase in system-wide SSS growth. Reported income from continuing operations experienced a notable 19% increase to $89 million, translating into a 26% jump in EPS to $0.68. Adjusted EBITDA for the quarter rose 14% to $124 million, with adjusted EPS increasing by 18% to $0.46. Network expansion continued with the addition of 49 stores (13 franchised and 36 company-operated). The company also actively managed its franchise network, refranchising 28 stores and converting 5 franchise stores to company-operated locations. Furthermore, Valvoline signed an agreement to refranchise another 38 stores, expected to close in Q1 of FY25, showcasing their commitment to strategic growth and efficient capital allocation.
Strategic Focus: Franchising and Network Expansion
Valvoline’s President and CEO, Lori Flees, emphasized the company’s focus on accelerating network growth, particularly through franchising. The refranchising initiatives completed and planned for early FY25 underline this strategic direction, allowing Valvoline to expand its market reach efficiently while maximizing shareholder value. The company added 158 net stores to its network during the fiscal year, with over half resulting from ground-up builds.
Fiscal Year 2025 Outlook: Continued Growth Trajectory
Looking ahead, Valvoline anticipates sustained growth in fiscal year 2025. The company projects same-store sales growth of 5.0% to 7.0% and plans to add 160 to 185 stores to its network. Considering the refranchising transactions, they expect top-line sales growth of 10% to 14%, reaching $1.67 billion to $1.73 billion, and adjusted EBITDA of $450 million to $470 million. This optimistic outlook reflects Valvoline’s confidence in its business model and its ability to deliver consistent and profitable growth.
Internal Controls and Financial Reporting
The company acknowledges a material weakness in internal control over financial reporting as of September 30, 2024, primarily due to the implementation of a new ERP system. While significant progress is underway to rectify these deficiencies, Valvoline maintains that the reported results are not materially inaccurate.
Investor and Media Information
Valvoline hosted a conference call to discuss these results. Additional details, including financial tables and supplemental information, are available on the Valvoline investor relations website.
