Driven Brands Grows Revenue as Profitability Narrows
Second-quarter revenue rose 6.8% to $507.4 million as sales growth moderated.
Driven Brands Holdings (DRVN), the automotive services company, reported a 7% decline in second-quarter adjusted EBITDA as revenue growth slowed and margins narrowed.
System-wide sales increased 5% to $1.63 billion, easing from 6% growth in the first quarter, while companywide same-store sales growth slowed to 1.4% from 2.1%. The same-store result remained above the 0.5% recorded in the fourth quarter of 2024.
Revenue increased 6.8% from a year earlier and 4.7% sequentially, while adjusted EBITDA fell to $107.0 million from a year earlier and rose 2.8% from the first quarter. Adjusted EBITDA margin contracted to about 21.1% from 24.2% a year earlier and about 21.5% in the preceding quarter.
Net income from continuing operations more than doubled to $37.3 million, or $0.23 a diluted share, from $16.4 million, or $0.10 a share. On an adjusted basis, net income slipped 1.5% to $48.2 million and earnings declined to $0.29 a share from $0.30.
Take 5 remained the main growth driver, with adjusted EBITDA rising 7.8% from a year earlier to $114.9 million and same-store sales increasing for a 24th consecutive quarter. Same-store sales growth moderated to 3.6% from 4.5% in the first quarter. Franchise Brands adjusted EBITDA fell 5.5% to $41.2 million, while Auto Glass Now adjusted EBITDA dropped 65.5% to $3.5 million.
Driven Brands reiterated its 2026 forecasts of $1.95 billion to $2.05 billion in revenue, $430 million to $460 million in adjusted EBITDA and $1.15 to $1.25 in adjusted earnings a share. Adjusted EBITDA is expected at the low end of its range because of pressure on lower-income consumers, uncertainty tied to the Middle East conflict and higher restatement costs.
Restatement-related costs rose to $11.8 million from $9.1 million in the first quarter, and Driven Brands now expects full-year costs at the high end of its unchanged $35 million-to-$45 million range. Net leverage improved to 3.1 times adjusted EBITDA from 3.2 times in the first quarter, leaving the company closer to its 3.0-times target.