Valvoline Stock Earnings Reports

Valvoline delivered a strong start to fiscal 2026 driven by productivity improvements, network expansion (including the acquisition of 162 Breeze stores), and margin improvement. Key operating results: system-wide same-store sales grew 13.8% on a two-year stack; net sales were $462 million (up 11% reported, 15% on an adjusted basis). Gross margin rate improved to 37.4% (+50 bps) and adjusted EBITDA margin rose to 25.4% (+60 bps). Adjusted income from continuing operations was $47.6 million; EPS grew 16% (28% adjusted). Operating cash flow was $64.8 million and free cash flow was $7.4 million (improved ~$20 million year over year). Breeze contributed one month of results in Q1 and is expected to add roughly $160 million in revenue and ~$31 million of EBITDA for 10 months of ownership in FY26, but the immature Breeze stores are expected to weigh on margins (~100 bps of EBITDA margin headwind). Balance sheet: net leverage is ~3.3x (net debt / adjusted EBITDA); management’s target is to reduce leverage to ~2.5x so share repurchases can resume. Other investor-relevant points: franchise pipeline and store openings remain healthy (franchise openings were modest in Q1 but activity has picked up), customer demand remains resilient (4.7-star network rating; NPS >80%), marketing innovations (instant transfer portal) and consideration of a national ad fund for FY27, and ongoing remediation of a control-process material weakness (IT controls remediated; business process controls work remains in progress with an expectation to close by year-end). Management noted near-term Q2 choppiness from winter storms but reiterated confidence in FY26 guidance.