For the fiscal third quarter ended June 30, 2025, Valvoline’s net income rose 23.1% to $56.50 million, and its adjusted EBITDA increased 5.1% to $129.50 million.
Gross profit grew 6.0% to $177.60 million, attributable to …
• Improvements in service mix, reflecting continued traction in premiumization and non-oil change services.
• Volume expansion.
• Pricing.
Meanwhile, gross margin rose from 39.7% to 40.5% on a year-over-year basis, mainly due to improved labor efficiency as well as leverage in products costs and benefits from service mix. These gains were partially offset by the impact of refranchising transactions and by higher shop operating expenses.
The company’s net revenue increased 4.2% to $439.00 million for the quarter. This breaks down as …
• $319.30 million in oil changes and related fees — up 3.6%.
• $93.90 million in non-oil changes and related fees — up 0.3%.
• $25.80 million in franchise fees and other — up 29.6%.
Management attributed the overall increase primarily to higher volume, supported by new shop openings and acquisitions, along with an increase in same-store sales (SSS).
System-wide shop sales grew 10.0% to $889.60 million.
System-wide SSS increased 4.9% on top of a 7.1% gain a year ago for a two-year stack of +12.0%. A closer look shows that company-operated SSS increased 4.2% on top of a 7.6% gain a year ago for a two-year stack of +11.8%, while franchised SSS increased 5.4% on top of a 6.7% gain a year ago for a two-year stack of +12.1%.
The improvement in system-wide SSS came from higher average ticket tied to increased ticket with premiumization, net pricing benefits and continued non-oil change service penetration.
An increase in transactions also contributed to system-wide SSS growth, reflecting an expanding customer base. Notably, transactions were up in each month of the quarter.
On the company’s Aug. 6 earnings call, President and CEO Lori Flees discussed the resiliency of customer demand. “We continue to see no evidence of customers trading down or delaying services. In fact, the percentage of customers using our premium products grew both sequentially and year-over-year across the network,” Flees said. “We’re pleased to see continued transaction growth for our same-store base. We also saw transaction growth in our mature store base for the quarter.”
She added: “Our ticket growth benefited from premiumization, net pricing and improvements in [non-oil change] service penetration.”
NETWORK GROWTH … During the quarter, 46 shops were added system-wide (33 of them were company-operated locations and 13 were franchised shops). This brings the company’s fiscal year-to-date total for gross shop additions to 116 (or 114 net of two closures in the second quarter).
Valvoline had 2,124 shops as of June 30, 2025 — 1,141 of them were franchised locations and 983 of them were company-operated shops.
“The strong delivery of stores this quarter, along with the stores already in construction and in the acquisition pipeline, gives us confidence in meeting our store addition targets for the year,” Flees said on the call.
That target is 160 to 185 shops.
“We continue to track to the midpoint of the range while recognizing, consistent with what we shared last quarter, that our pipeline is more back-end loaded this fiscal year,” she stated. “We’re pleased with the continued momentum of new store pipeline growth, including our recently refranchised markets. The progress of both our company and franchisee development teams reinforces our confidence in delivering our network growth targets and improving return on invested capital.”
Additionally, Valvoline continues to work toward gaining regulatory approval to close on the acquisition of Breeze Autocare from the Greenbriar Equity Group. Pleasanton, CA-based Breeze operates nearly 200 quick-lube shops across 17 states — with a concentration in California, Texas and the Midwest — predominantly under the Oil Changers brand.
“We continue to work diligently with the FTC on a path to close this transaction,” Flees told analysts. “This path to close could include a plan to divest certain stores subject to FTC approval, but we’re still too early in the process to know the specifics, and there is uncertainty around the timing. We hope to close in late Q4 or early fiscal 2026.”
MISCELLANEOUS … Other items of interest from Valvoline’s quarterly report and earnings call …
• Regarding the impact of tariffs, Flees stated: “While there continues to be uncertainty in global trade discussions, our expectations of any impact to our financials are minimal and unchanged.”
• Management narrowed its guidance ranges for 2025 to reflect updated expectations. System-wide SSS is now expected to come in between 5.8% and 6.4% compared to the prior range of 5.0% to 7.0%.
• Net revenue is now expected to come in between $1.69 billion and $1.72 billion compared to the prior range of $1.67 billion to $1.73 billion.
• Adjusted EBITDA is expected to come in between $460 million and $470 million compared to the prior range of $450 million to $470 million. — Reporting by Marc Vincent, Editor
