For the fiscal third quarter ended June 30, 2026, Valvoline Inc. saw its net income increase 14.2% to $64.50 million
Adjusted EBITDA rose 25.4% to $162.40 million, mainly attributable to gross profit growth and strong revenue performance, including higher volumes, favorable pricing and service mix, and contributions from the Breeze Autocare acquisition. This more than offset impacts from dispositions as well as higher selling, general and administrative expenses.
Meanwhile, gross profit grew 21.0% to $214.90 million, attributable to contributions from acquired service centers in addition to network growth. According to management, these increases were partially offset by higher expenses associated with network expansion, including labor, depreciation, occupancy and other service delivery costs.
Gross margin, however, decreased from 40.5% to 39.5% on a year-over-year basis, reflecting higher shop operating expenses, including depreciation and occupancy costs associated with network expansion and acquisitions, as well as higher labor and other service delivery costs. Excluding the impact of depreciation, the gross margin rate would have improved by 10 basis points.
The company’s net revenue rose 24.1% to $544.60 million, primarily driven by shop additions, system-wide same-store sales (SSS) growth of 8.0%, and favorable pricing and service mix. This was partially offset by dispositions.
According to the company, its system-wide SSS growth was supported by higher average ticket from pricing actions, premiumization and non-oil change service penetration, along with modest growth in transactions. More specifically, ticket drove about three-quarters of the comp, with transaction driving the remainder.
Valvoline’s $544.60 million in quarterly net revenue breaks down as …
• $405.40 million from oil changes and related fees — up 27.0% compared to a year ago.
• $110.00 million from non-oil changes and related fees — up 17.1% year over year.
• $29.20 million from franchise fees and “other” — up 13.2% year over year.
System-wide service center sales increased roughly 19.0% to $1.05 billion, crossing the $1 billion mark for the first time.
President and CEO Lori Flees noted on the company’s Aug. 5 earnings call that Valvoline saw transaction growth across the system in the quarter. “Broadly, no signs of trade-down or deferral of services,” Flees remarked. “That said, we did see pockets of pressure in June, with more moderate growth among lower-income households and some softness in [non-oil change] penetration — similar to what we typically see in the summer drive season.
“Overall, our customer has remained resilient. We continue to see steady demand for the non-discretionary services we provide. We are watching consumer behavior closely across the network.”
EXPANSION … In December 2025, Valvoline acquired 100% of the equity interests in Breeze Autocare for $637.40 million. This added 204 shops in California, Texas and the Midwest that operated predominantly under the Oil Changers brand.
Flees told analysts that the overall performance of the Breeze business has continued to be at or above expectations. “As of Q3, we have converted 12 stores to the Valvoline Instant Oil Change brand. While it’s still early, the performance of the converted stores is slightly ahead of expectations.”
Immediately following the Breeze transaction, 45 of the acquired shops were sold in accordance with an FTC decision, an order that required the disposal of certain acquired service centers in order for Valvoline to receive regulatory clearance to close the Breeze deal.
In addition to the Breeze acquisition, the company acquired 21 shops in single- and multi-shop transactions during the nine months ended June 30, 2026. This included seven former Express Care locations converted to company-operated service centers and four former franchise shops.
This all expanded Valvoline’s retail presence in key North American markets and contributed to growing the number of company-operated service centers to 1,232 as of June 30, 2026.
Valvoline’s overall network stood at 2,456 shops.
The number of net store additions for the fiscal third quarter was 47 — 25 of which came from franchises and 22 of which were company-operated additions.
SUPPLY CHAIN … Flees told analysts that the closure of the Strait of Hormuz has disrupted global oil supplies and constrained Group III base oil — a key ingredient in full-synthetic lubricants — with shortages expected to persist. However, Valvoline’s scale and strong supplier relationship provide reliable access, she pointed out, leaving management confident in the company’s supply position both now and in the near term.
“That said, constrained supply across the market has elevated finished lubricant costs. We saw costs begin to rise in the third quarter. They continued to increase as we moved into the fourth quarter,” Flees commented. “Based on the current forecasts, we expect finished lubricant costs could be approximately 60% above where they were in March. While that sounds significant, let me clarify: that means we expect a total increase of approximately $5 to $7 per oil change, depending on the lubricant type, relative to the March period.”
She said Valvoline is managing this cost dynamic through consumer pricing and operational discipline, noting that both company-operated shops and franchisees took pricing actions in the third quarter.
LOOKING AHEAD … Management has narrowed its guidance ranges and raised its full-year system-wide SSS expectations, with Flees stating: “We are operating in a period of meaningful change on the cost side of our business. Our team is focused on mitigating the impact of increased finished lubricant costs with pricing actions and ongoing operational discipline. We remain confident in the underlying strength of our business and our team’s execution.”
System-wide SSS growth is now expected to come in between 7.5% and 8.0% — up from management’s prior guidance calling for 5.0% to 6.5% SSS growth.
Net revenue is now forecast to be between $2.05 billion and $2.10 billion — up slightly from the prior guidance calling for $2.00 billion to $2.10 billion.
Adjusted EBTIDA is now expected to range between $550 million and $560 million — up slightly from management’s prior forecast calling for $540 million to $560 million. — Reporting by Marc Vincent, Editor
