The automotive services provider registered an adjusted EPS of $0.43, beating the analyst consensus of $0.36.

System-wide same-store sales increased 12.5% Y/Y.

Gross profit climbed 18% to $150.7 million, with a profit margin of 40.1%. Adjusted EBITDA jumped 28% to $110.4 million.

The company exited the quarter with $950.8 million in cash and equivalents; total debt was $1.6 billion.

"As expected, we saw EBITDA margin improvement both sequentially and over prior year," said Lori Flees, President, Retail Services. "The margin improvement continues to be primarily driven by labor efficiency and SG&A leverage from the increased volume we see during the summer drive season." 

CEO Sam Mitchell To Retire

Outlook

Valvoline sees Adjusted EBITDA of $375 million-$385 million, compared with a prior view of $370 million-$390 million. Valvoline raised its FY23 adjusted net income outlook to $185 million-$200 million from $160 million-$180 million.

"We are narrowing the range of our EBITDA guidance and raising our net income guidance. We are focused on creating significant value for shareholders by growing the core business, expanding the network and evolving with the car parc," said Mitchell.

Price Action: VVV shares are trading lower by 1.86% at $35.51 on the last check Wednesday.