NYSE$VVV

Valvoline Inc. · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Valvoline's first quarter results were reported, showing growth in sales and adjusted EPS, driven by a strong contribution from Core North America and Quick Lubes.

Valvoline reported a positive first quarter with a 9% increase in sales to $607 million and a 30% increase in adjusted EPS to $0.35. The company's performance was driven by strong results in Core North America and continued growth in Quick Lubes.

  • Net income was reported at $73 million, with an EPS of $0.39.
  • Adjusted EPS increased by 30% to $0.35, and adjusted EBITDA grew by 19% to $120 million.
  • Sales increased by 9% to $607 million, with lubricant volume growing by 3% to 43.4 million gallons.
  • Quick Lubes system-wide same-store sales grew by 8.3%.

Headline financials

Total Revenue

$607M

Previous: $557M+9.0%
EPS (adj)

$0.35

Previous: $0.27+29.6%
Company-operated stores

524

No prior period
Franchised stores

883

No prior period
Capital Expenditures

-$28M

Previous: -$27M-3.7%
Free Cash Flow

$45M

Previous: $26M+73.1%
Net Income

$73M

Previous: $53M+37.7%
Operating Income

$104M

Previous: $87M+19.5%
Gross Profit

$211M

Previous: $183M+15.3%
Cash & Equivalents

$162M

Previous: $99M+63.6%
Total Assets

$2.3B

Previous: $1.83B+25.4%
Stock-Based Comp

$4M

Previous: $3M+33.3%

Revenue & EPS history

Valvoline · Revenue · Quarterly

$607M

Q1 2020+9%vs Q1 2019
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Forward guidance

Valvoline raised its fiscal 2020 EBITDA guidance to $495 to $515 million, despite the recent increases in raw material costs.

Tailwinds

  • Profitability in Quick Lubes is expected to improve.
  • Volume growth in International is expected to continue.
  • Making progress on plans to strengthen and maintain the foundation of Core North America.
  • Full-year Core North America EBITDA is now expected to grow modestly due to the strong Q1 results.
  • Each segment is on track to meet or exceed its profitability targets combined with the strong start to the year.

Headwinds

  • Recently announced raw material cost increases are expected to modestly impact profitability in the second half of fiscal 2020.
  • Anticipate volume softness in Core North America for the next three quarters on a year-over-year basis.
  • The DIY category remains dynamic.
  • Challenges in the retail channel resulted in weak performance in the prior-year period.
  • Ramping of newly-built stores and a temporary increase in labor costs impacted growth in segment EBITDA.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

-0.3%

Avg return

Earnings day

+0.4%

Avg return

5 days after

+0.6%

Avg return

30 days after

48%

20 / 42 earnings

Positive

+12.3%

Q2 2023

Best reaction

-21.2%

Q1 2019

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026+4.8%-4.1%+4.6%
Q1 2026+8.1%+11.1%+5.9%
Q4 2025-2.6%-3.3%-6.0%
Q2 2025-1.8%+0.9%+6.0%
Q1 2025+7.4%+8.8%-4.6%
Q4 2024-9.1%-8.9%-14.3%
Q3 2024-7.5%-9.3%-8.4%
Q2 2024-5.1%-5.4%-7.4%
Q1 2024+7.0%+10.4%+21.1%
Q4 2023+8.3%+14.6%+16.8%
Q3 2023-4.8%-5.4%-6.4%
Q2 2023+12.3%+12.0%+8.3%
Q1 2023-4.4%-3.1%-4.1%
Q4 2022-0.1%+1.2%-3.6%
Q3 2022-7.5%-5.9%-6.6%
Q2 2022-8.4%-1.2%+14.1%
Q1 2022+4.1%-1.4%-9.3%
Q4 2021-1.5%-2.0%-1.9%
Q3 2021-0.7%-2.9%-2.2%
Q2 2021+7.9%+9.1%+14.1%
Q1 2021-2.0%-0.2%+4.1%
Q4 2020+5.6%+8.8%+21.2%
Q3 2020+1.9%+5.9%+0.6%
Q2 2020+0.5%-0.3%+17.8%
Q1 2020+3.9%+8.0%-7.3%
Q4 2019+4.4%+7.2%+1.8%
Q3 2019+6.7%+7.1%+11.4%
Q2 2019-6.9%-2.7%-5.7%
Q1 2019-21.2%-18.0%-18.6%
Q4 2018-6.6%-1.4%+1.1%
Q3 2018-7.0%-4.6%-4.7%
Q2 2018+3.4%+6.4%+2.0%
Q1 2018-2.8%-0.8%+0.5%
Q4 2015-2.0%-1.4%-1.6%
Q4 2017-0.4%-3.0%+3.3%
Q3 2016+0.0%-0.8%-2.0%
Q3 2017+0.6%-1.5%-6.1%
Q2 2016+0.1%+0.7%-0.2%
Q2 2017-0.3%-2.5%-3.0%
Q1 2016+2.0%-0.2%-2.4%
Q1 2017+5.6%+3.3%+1.3%
Q4 2016-4.8%-9.1%-4.0%
Q3 2015
Q2 2015
Q1 2015

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