Valvoline Raises Outlook as Revenue Growth Holds Near 25%
The automotive-service retailer lifted its same-store-sales outlook to 7.5%-8.0% for the fiscal year.
Valvoline Inc. (VVV) reported a 24% increase in third-quarter revenue to $544.6 million, sustaining the faster growth established in the prior quarter. Revenue rose 8.1% sequentially and grew at roughly the second quarter’s 25% pace after increasing 11% in the first quarter.
System-wide same-store sales increased 8.0%, up from 4.9% a year earlier and just below the second quarter’s 8.2% gain. Pricing actions supported the result as higher finished-lubricant costs required additional pricing and operational measures.
Adjusted earnings rose 21% to $0.57 a share, and income from continuing operations increased 14% to $65.0 million. Adjusted EBITDA climbed 25% to $162.4 million, with margin expanding 0.3 percentage point to 29.8%. Gross margin narrowed about one percentage point to 39.5% as cost of sales grew faster than revenue.
System-wide store sales rose 18.5% to $1.054 billion, slowing from 20% growth in the second quarter but remaining above the first quarter’s 13% pace. Company-operated store sales increased 25.7% to $481.0 million, outpacing a 13.0% increase in franchised-store sales to $572.9 million.
Valvoline added 47 net stores during the quarter, up from 29 in the second quarter, bringing the system to 2,456 locations. The additions comprised 25 franchised stores and 22 company-operated stores, shifting the mix toward franchises.
The company now expects fiscal-2026 revenue of $2.05 billion to $2.10 billion, raising the low end by $50 million. It forecasts adjusted EBITDA of $550 million to $560 million and adjusted earnings of $1.70 to $1.75 a share, lifting the low ends of both ranges after increases in the previous quarter.
Year-to-date operating cash flow from continuing operations rose to $284.6 million, and free cash flow increased to $112.3 million despite higher capital spending. Valvoline cut its capital-spending forecast to $240 million–$260 million while maintaining plans for 330 to 360 system-wide additions. Debt declined to about $1.6 billion after a $50 million voluntary term-loan prepayment.