Valvoline Stock Earnings Reports

Key investor takeaways: Valvoline reported a solid Q2 FY2025 with system-wide sales +11% to $826M and same-store sales +5.8% (two-year stack). Reported net sales rose 4% (11% ex-refranchising) and adjusted EBITDA was $104M (a 6% increase on a recast basis); adjusted EPS was $0.34 (+3% recast). Store count reached 2,078 (up 8%) with 33 net new openings in the quarter and 68 YTD; management reaffirmed FY25 guidance (net revenue $1.67–1.73B; adjusted EBITDA $450–470M). Management says tariff exposure should be minimal for FY25 (they estimate < $4M operating cost impact) after supplier shifts and inventory coverage; store capex pressure is expected to be single-digit percent. Refranchising and technology investments drove SG&A deleverage this quarter (SG&A 19.3% of sales; adjusted EBITDA margin 25.9%, down 110 bps), but management expects SG&A increases to moderate and to leverage as network growth accelerates. Balance sheet: net debt increased $44M in the quarter, leverage ~3.4x (rating agency adj.); share repurchases have been paused while pursuing the Breeze Auto Care acquisition (FTC second request received; close timing uncertain but expected H2 FY25 if approved). Non-oil-change revenue (NOCR) remains a tailwind albeit at a lower rate of contribution as the company laps prior training initiatives; penetration and transaction trends are healthy across geographies and income quartiles. Leadership: CFO Mary Meixelsperger announced retirement; Kevin Willis named CFO effective May 19.