For the fourth quarter of 2022, Driven Brands Holdings reported $1.47 billion in systemwide sales (up 24.2% year over year) from which the company generated $539.65 million in revenue (up 37.7%). The rise in systemwide sales breaks down as 11.4% same-store sales growth and 9.0% net store growth (98 net new locations).
Systemwide maintenance sales rose 35.6% to $448.38 million, with same-store sales up 16.3%. Notably, Take 5 Oil Change’s same-store sales increased more than 25%, attributable to both ticket and traffic.
Executive Vice President and CFO Tiffany Mason told analysts on Driven’s Feb. 22 earnings call that Take 5 Quick Lube continues to benefit from enhancements to targeted digital marketing, driving increased car count. “And, we’ve successfully passed along retail price increases while maintaining our premium oil mix year-over-year, driving an increase in average ticket,” Mason said. “The attachment rate of ancillary products — such as engine air filters, wiper blades, cabin air filters and coolant exchange — remained strong at nearly 40%, also contributing to a higher average ticket.”
Systemwide platform services sales increased 10.5% to $92.86 million, with same-store sales up 4.1%.
“We have leveraged our scale and leadership in the industry to ensure our franchisees are consistently in stock despite supply chain disruption, creating long-term customer loyalty for the 1-800-Radiator brand,” Mason said on the call. “While we continue to benefit from the customers we acquired as a result of the supply chain disruption, average selling prices year-over-year have begun to normalize.”
Meanwhile, systemwide paint, collision and glass sales increased 23.5% to $794.22 million, with same-store sales up 14.1%; and systemwide car wash sales grew 6.9% to $132.63 million, with same-store sales down 10.1%.
Driven Brands’ net income climbed from a loss of $38.79 million a year ago to $27.40 million in net income for the fourth quarter of 2022, with adjusted net income up 35.4% to $42.19 million and adjusted EBITDA up 53.6% to $130.48 million. The company’s adjusted EBITDA margin was 24% — up 250 basis points from the fourth quarter of 2021.
By segment …
• Maintenance segment adjusted EBITDA rose 67.4% to $77.28 million.
• Car wash segment adjusted EBITDA decreased 4.3% to $36.22 million.
• Paint, collision and glass segment adjusted EBITDA increased 63.2% to $34.60 million.
• Platform services segment adjusted EBITDA grew 49.4% to $18.07 million.
Other items of interest from Driven’s quarterly report. …
• Management expects Driven to add approximately 365 new locations in 2023 — 170 in the maintenance segment; 65 in the car wash segment; and 130 in the point, collision and glass segment.
• Take 5 Oil Change’s footprint grew 20% year-over-year in 2022 to 850 North American shops, including close to 250 franchise locations, and management expects this business to grow its footprint by an additional 20% in 2023.
• Driven Brands is anticipated to generate roughly $2.35 billion in revenue in fiscal 2023 — up from $2.00 billion in 2022, with same-store sales growth of 5% to 7%.
• Fiscal 2023 adjusted EBITDA is expected to come in around $590 million — up from $513.80 million in 2022, with adjusted EBITDA margin anticipated to remain stable at roughly 25%.
• Management’s guidance does not included future mergers and acquisitions. — Reporting by Marc Vincent, editor