Valvoline Q3 Earnings Call Highlights

Valvoline Q3 Earnings Call Highlights Written by MarketBeat August 9, 2026 Add As Preferred Source Share Share Share This Article Link copied to clipboard. Close Image from MarketBeat Media, LLC. Key Points Strong Q3 performance: Sales rose 24% to $545 million, adjusted EBITDA increased 25% to $162 million, and adjusted EPS climbed 21% to $0.57. System-wide same-store sales grew 8%, driven primarily by pricing and premium services, while the store network surpassed 2,400 locations. Lubricant costs are pressuring margins: Tight Group III base-oil supplies could push finished lubricant costs roughly 60% above March levels, or $5–$7 per oil change. Valvoline is implementing pricing actions, but expects fourth-quarter EBITDA margin compression of about 300–400 basis points. Full-year outlook raised: Valvoline increased its fiscal 2026 same-store-sales forecast to 7.5%–8% and sales guidance to $2.05–$2.1 billion, while maintaining adjusted EBITDA guidance of $550–$560 million and adjusted EPS guidance of $1.70–$1.75. Five stocks we like better than Valvoline . Trump Tax Reforms: 7 Stocks That Could Benefit in 2025 Valvoline NYSE: VVV reported third-quarter fiscal 2026 sales and profit growth that management said met expectations, supported by higher pricing, transaction growth and continued network expansion. The company also raised its full-year same-store-sales outlook as it works through rising lubricant costs tied to constrained Group III base oil supply. For the quarter ended June 30, system-wide store sales rose 19% to more than $1 billion for the first time in a quarter. System-wide same-store sales increased 8%, with ticket growth contributing more than three-quarters of the gain and transaction growth accounting for the remainder. Get Valvoline alerts: Sign Up FMC stock just set a new ceiling higher, 50% higher indeed President and CEO Lori Flees said all ticket components contributed, including net pricing, premiumization and non-oil-change revenue service penetration. Net pricing was the largest factor after pricing actions during the quarter. Franchise same-store sales exceeded the system average, she said. Financial Results and Cash Flow Net sales increased 24% year over year to $545 million, reflecting momentum in the core business and contributions from the Breeze acquisition, according to CFO Kevin Willis. Adjusted EBITDA rose 25% to $162 million, while EBITDA margin expanded 30 basis points to 29.8%. Adjusted earnings per share increased 21% to $0.57. 3 chemical stocks to play the industry breakout Gross margin was 40%, down 50 basis points from the prior year. Willis said product-cost favorability during the quarter was offset by higher service-delivery costs, including depreciation from new stores. Excluding depreciation, gross margin would have increased 10 basis points year over year. SG&A expense as a percentage of net sales declined 90 basis points to 17%, supported by higher summer-season transactions and cost discipline. Willis said the company expects further year-over-year SG&A leverage in the fourth quarter. Year-to-date operating cash flow improved by $105 million to $285 million, while free cash flow rose about $93 million year over year to $112 million. Valvoline used a portion of the cash to reduce debt during the June quarter. Its net-debt-to-adjusted-EBITDA leverage ratio declined sequentially by about 10% to 2.8 times. The company also completed a repricing of its Term Loan B, which Willis said is expected to reduce annual cash interest expense by about $1.8 million based on the current balance. Management said it remains focused on returning leverage to its target range and restarting share repurchases. Lubricant Supply Constraints Drive Pricing Actions Management said the closure of the Strait of Hormuz has disrupted the global oil supply chain and constrained supplies of Group III base oil, a key ingredient in full synthetic lubricants. Flees said Valvoline’s scale and supplier relationship hav...