VVV - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, welcome to the Valvoline Inc. 3Q 2021 Earnings Conference Call. My name is Nadia, and I will be coordinating the call today. [Operator Instructions] I will now hand over to your host, Sean Cornett, from Investor Relations to begin.

So Sean, please go ahead.

Sean Cornett

Nadia. Thanks, and Webcast. Third everyone, Conference Fiscal to and Call welcome morning, Quarter Valvoline's XXXX Good results the released X:XX Valvoline for p.m. at XX, approximately XXXX, quarter ended June be this Eastern a release, at which our and X, investors.valvoline.com. yesterday, on of conjunction and available Relations Time remarks that August copy should Investor viewed is earnings in with presentation website

our the results As that provide presentation and appendix of are until A of a preliminary our copy reminder, with there are the slides Sam Form we been today furnished on SEC Meixelsperger, the Commission. are X-K. Exchange file to Officer. and information. Securities call the Mitchell; Form With These XX-Q press release in Financial the Officer, has on Chief a Executive Mary Valvoline's further Chief me

Slide understanding included other in similar be are non-GAAP and the to appendix. discussion items, adjusted measures enhances of by and results of may restructuring to any non-GAAP are forward-looking We management's not subject and be basis, of of unless statements. reported These our from assumes for an of update are information remarks, remarks this our results unusual, A today non-operational reconciliation on of used fact and will such on shown our to based amounts approach the risks to as are our which under certain to or results measures our no our by X, current non-GAAP used obligation are that uncertainties The historical are statements. otherwise of use assumptions any a differ key materially date in presentation forward-looking actual may noted. by Non-GAAP GAAP ongoing is forward-looking nature. unless statements management not non-GAAP companies. adjusted presentation the As this In this Valvoline comparable believe required we law. presentation that provided on adjusted business. discussing statements results in of is cause statements and

things we over as Now turn I'll Sam. to X, turn to Slide

Sam Mitchell

Sean. Thanks,

Our this Retail service-driven EBITDA business segment model year-to-date transformation reached has our of generating with adjusted inflection XX% point to basis. Services business on a an a year

ongoing returns higher capital. continue faster growth, expect on driving this stronger and margins to transformation We

business exceptional results experienced demonstrate growth. and strong XX% the sales a continued QX Our working. our across We this adjusted the in we performance, XX% saw reflect year-over-year strategy and same-store have outstanding momentum is that clearly increase year including system-wide EBITDA

XX% XXXX, grew anticipate fund have shareholder cash to drive more sales same-store lessened. grew adjusted COVID-XX and system-wide QX As Compared and XX%. a EBITDA strategies long-term growth of generation impacts base We our to normal of value. strong continued

the Let's turn next slide. to

we our As allow improve comparability, accelerated from May, better a a to realignment our in for reminder announced segments growth, business effectiveness. operational drive business our and transparency increase of update

strategy. realigned value Our to will priorities. capital resources disciplined the strategic allocation segments a shareholder better drive through us We capabilities and execute continuing provide to opportunity anticipate leverage to our

a maintain $XXX to Beyond investing X.Xx share capital leverage. buyback prudent projects, with authorization shares our at and in repurchase three-year high-return expect structure we million roughly

to discuss to the our slide Let's segments. move next new

increasing and key realigned industry Lubes Both age. and miles have Quick Products, including driven segment; our car and growing business management Services, Retail segments. expanding into former formerly our benefit from We two vehicle segments park, operating of segments: the International Global North our drivers, Core an America

synthetics, industry from trend DIY ongoing toward as also our Retail reinforcing from the DIFM towards from Additionally, to Services a more as business. transformation our segment well service-driven the benefits shift

Let's turn to Slide X.

business service-driven to product-centric is a strategy model. transform from Our a to

accelerate by company our through the store build. segment acquisitions Products We the Global of to are and segment redeploying growth Retail generated the cash Services

buybacks. M-and-A is Shift and sufficient growth, Additionally, cash expected generate drive higher and margins to for opportunistic stronger share to and free returns returns. services dividends flow we shareholder faster via

Slide shown Retail driven story as Services Our bearing investments an fruit financial in this business and X. began our made year. store inflection our now is XXXX in our results, acceleration driving transformation we an point The have and for new in have growth fiscal on acquisitions in growth

We continue high-return to investments the in driving expect our growth future.

segment into highlights. Moving

Let's discuss X. Slide Retail Services on

Our for Retail outstanding Services auto Care results quarter. segment, which focuses delivered on preventive the

XX% more sales unit unit algorithm XX%. our effect and than in delivered of were XX% growth Our the performance year-over-year of of driving well growth growth Key as year-over-year as top segments line drivers XXXX. XX% system-wide full system-wide sales as of growth was and expanding of count versus of QX sales our same-store same-store

cost single-digit Our last We Versus same-store Adjusted transactions. and grew ticket. are share from that leverage. well we significant sales unit strength growth by fixed benefited QX high as rate versus year growth as sales average same-store XX%; XX%. was believe substantially XXXX, margins EBITDA driven in as versus system-wide capturing was XXXX grew market first and

results and to the annual expect or on per remains of the the ticket an XXXX. modestly growth Sales year-over-year of $XXX free helping backdrop up X% to grew estimated forecast grew high solid was to XXXX, want and of primarily remain flow for we of why in discretionary system-wide discuss annual million adjusted driven drive as in sales compared highlighting Discretionary as an was same-store resiliency generate Products growth unit above cash free in mid teens Going grew Retail We generation Combined strong generate increase Products, can to up XX%, year. to bullish margins average in flow and to considering growth Global performance the and I XX% track XX% year up Sales X% Global volume EBITDA material segment. forward, exceptional our EBITDA versus year-over-year, highlighting for to Segment Products on slide, to which XX% QX prospects by transactions next cash segment. fiscal Shifting fund to of XX% to were mid-teens cash the expected the from sales. also XXXX. X% growth, segment. this versus last we with well to are growth Global in the pricing. XXXX. XX% raw we highlight at the Services. continues flow,

witnessed raw in unprecedented past availability over well quarters. increase limitations material material have raw the as costs few an as in We

We have the success passing had through faster earlier evidenced these of as volume. growing rounds sales by increases cost than

the in biggest However, QX. significant past are results in the in Global announced cost increases to anticipated have impact quarter Products

cost process of Products further the line, business impact. We year. is short-term a actions through Global of the fundamentals this that are and solid, bottom pricing the of in believe are the The calendar balance executing we inflation expect

over financial our more in things turn to Mary I'll detail. review to Now results

Mary Meixelsperger

Sam. Thanks,

Our earnings. including results was Performance are gross sales, summarized and adjusted in XX. exceptional, on profit quarterly Slide QX record

showing are our treatment strategy. appendix the due business adjusted LIFO a which non-cash a to in overall of difference profit we growth reported discussed shift Services, last key gross margin important May without accounting of While of sales period underlying was service benefits was results year our adjusted outsized as year, year-over-year the was our over between strength Retail top performance LIFO driven accounting. Growth had QX inventory a a quarter pre-tax better believe and three-year to our item LIFO slide and this with impacts a saw treatment item to our charge QX gross improvement. XXXX versus adjustment, million LIFO and versus the $XX million. of robust, and and of a last impact presentation better demonstrating business of COVID part understand In as The significant includes in profit key comparability. comparisons the the of The excluding is We is business of and the by biggest credit which update. for QX, $X line

year-over-year, increase year support as addition contributed growth. XXX In growth XXX that basis sales of respectively. points SG&A spending, in as to on for to future The related reinstatement approximately well EBITDA during store we overall last focused pandemic to liquidity was and organic primarily year-over-year we had investments as strong advertising and growth, restricted the to acquisitions

and Services, at look EBITDA slide. the to on versus basis company XXX same-store XXXX. year-over-year in System-wide grew points XXXX, points basis versus by adjusted XXXX. margins and by compared last improved XXX driven year year XX.X% next and Retail increased versus expanded nearly XXX points margins are XXX sales a take last points Total by Let's basis which compared to closer margin XX% basis up

had increased our challenges ticket, As in share Like have staffing the we other average is leverage. driving significant many sales fully gained we retailers, same-store stores. in in growth

between raw was that We in to market to Global maintain Products cost teams invest pricing. and have service expectations, increases the help consistent in QX in we've our place and our in preserve margin The lag decline gained. the high with given store share levels pass-through plans material for

have discretionary to growth flow and free our focused, our maintenance nearly million see with shareholders. will We we transformation, to XX% from year-to-date a cash shareholders returned remained been believe operations cash million flow of capital year-to-date have Through $XXX expenditures of on capital-light As basis. X% repurchases. model million. $XXX XX, our you capital drive to less on flow growth business dividends share cash was can Slide strong sales of while continue flow and via June significant to than operating and of fund XX, returns cash $XXX

slide. look on closer next a take Let's investments at growth our the

Services Retail significant projected at have We opportunities high business. returns in our reinvestment

roughly new acquired the auto maturity. returns change the have fragmented targeted a stores stores U.S. oil much also of in highly company X% Historically, share that smaller we market aftermarket. Quick building Lube and XX% have We share DIFM cash-on-cash returns with the approaching while of of mid-teens, a have

are $XX driving EBITDA investments nearly the $XX of year-to-date in and an years in continue million come. Our our transforming million maturity business expected to to model growth, incremental for to including Services at Retail million $XXX

continue Products cash strategy to Global Our Retail growth segment fund is from to in flow our Services. deploying

driven XX. leading XX% in fiscal top outlook EBITDA, $X.XX system-wide for to same-store shown we growth XX% our is for the to on XXXX on momentum, for $X.XX line adjusted sales strong our Slide and by XX% Based to to growth. range XX% raising EPS. expect adjusted now sales tightened guidance, are We've Our

with We strong cash cash generation flow continue to of free to anticipate million $XXX million. $XXX

XX% low revenue the continued above growth we growth drive and capital X% Returns outlook low review Retail next growth at EBITDA invested Let's should at through expect margins or Products to – EPS are our mid-teens through Global at that in on XX% EBITDA All-in, in steady and remain anticipated margins to the to performance slide. in to XXXX Services low long-range XX%. XX% on XXXX. adjusted

growth of improving as well and margins. EBITDA Retail Services strong As as our grows we time, generation free a business expect as flow over sales, in share continued cash

back Let wrap over turn up. to me it to Sam

Sam Mitchell

have few I a to want Mary. emphasize summary. I Thanks, points in

strategic our drive to continuing we're XX, Slide on transformation. see can you as First,

natural shift segments a new focusing to investors strategy. service and Our on reporting are that step next in

approach convenient and Our auto gain trust-based the which drive us service stands aftermarket, growth. share has out to allowed in

had a earnings model. quarter adjusted Second, record by sales and business our in brand QX with and fantastic strong we team, driven

we are Third, through significant cost managing of unique increases. time a

Global QX, the in peak challenges impact primarily those margin in expect We segment. of our Products

We continue to demand trends. the by encouraged be

team COVID-XX has open job Q&A. and Sean our us success, turn through tensions. supply for chain to by in up highlighted of great a to impacts I'll done targets line back Lastly, And with as set the the through managing XXXX. that, for have our long-term it They

Sean Cornett

that, the With Instructions] [Operator Sam. please open line. Thanks, Nadia,

Operator

Simeon, Our from Morgan today Gutman Simeon Stanley. question first Instructions] comes please from go ahead. [Operator

line Your is open.

Simeon Gutman

– Simeon. came QX My profits your curious can track for about expectations outperform. It's first a talk services question in cost little Retail morning, were everyone. the lag. you – Services QX price just thinking the of talk now last Clearly, a Products versus if if about below And is I'm But quarter? Global could Good versus you what expectations you because expectations? how maybe about Thanks.

Sam Mitchell

strong quarter expectation growth And Yes. in Services for the that an from expectations we Retail our same-store really business. QX did obviously the was standpoint, sales a exceed saw.

share has trends, growth, for and And of our business the ability volume team quite grow some So that the transaction time, been for strong growth performance some most obviously, the have impressive. QX. good really really saw market we to been in underlying and

so as encouragement And we opportunity in that us about think performance QX. gives

business Services And that so it takes. Retail the we're the momentum thinking more positively about and

growth a – volume the business even demand back side, going On perspective, seen been Products in the solid, from that has to year, businesses particularly the Global last well to perform as continue the and now we've very the DIY and the in installer improvement business. channel we continue the in to in And as expecting QX. be modest in the the QX, some solid. international improvement And anticipate that case see demand we're segment. We're was starting to to demand

up about as too, encouraging, the what's that's versus be are begin comparison that's almost driven when my over significantly miles So showing driven to recent quarter down but last of look trends driven. tick point so, been up back And miles XXXX. X% XXXX. versus or you we miles Obviously, probably from to for see it's flat

So say, in the on spring. really going It's Global the the anticipated, demand Products side, significant have very been cost solid. increases had than to we more back where

to creates for So year, feel that unit margin that balance of pricing for And be be need actions we comes we'll challenges business. the QX. where it to that taking yet, we get the through we'll margins that back the this when through to

side. Global The So the challenge again, from course, has, Products. the fundamentals chain really on good feel about of been in supply the business,

has raw to here. pretty an some the of needs just team our With period with meet done during customer the material a availability, job but excellent tight inflation the

demand see improving. lastly, Southeast in modest right the the in some and across to all in really us that And the factor. impacts But give be call international growth out of the COVID-XX underlying business international a continue business, that of the hope to of growth the a long-term now So our lot we've that of in had confidence regions for particularly with Asia risk that business. strength

Simeon Gutman

of guess, changes America the will that seen I and for X% Services Like those historically, above a Is are growing XX, on Thanks adjusted it's then least to? XX% XX%. my that, CAGR it's grow run to mix fundamentally the what of legacy great due of at relates So EPS Slide you also definitely revenue growth the because follow-up. we've Those think expectation that, it or Retail and outlook, rate the great, It are the to international Sam. CAGRs. the XX% unquestionably faster? business, North plus, long-term that to of

Sam Mitchell

Yes.

been and twofold. that First we're to that that to seeing. good us we strength the continues really it's gain has be business foremost, the growth. strong growth that's Retail and store really sales of performance same-store then obviously, also is gain for success It driving in continue important operational us. It's big of to exceptionally it's Services The And our had market growth, opportunity a as and and outstanding, share. in we've for the And share.

do-it-for-me our preventive past that we range. in in believe in to maintenance think is year, shared, we I As this X% X% more that share the of market

ground-up And continues and so pipeline adding growth. franchisees opportunity our business also drive program, retail acquisition our to grow working and but acquisitions, our be solid units, both to with through our to through

Global expect driver North performance. do the have gain the American more back we expect continue continue in ability to to business, we on growth key – we And outlook, ticket growth, our modest coming overall And that to behind of be expect business then that, that long-term growth steady that too. levers drive that lot Products whereas Products will drive to growth very then we we're and expect We International share. to and to the Global the a bullish expand

stable And seeing really terms we've out so then international in North coming nice in made growth of performance America both progress, and the of accelerated good, markets.

Simeon Gutman

Good everyone. Thanks, luck.

Sam Mitchell

Simeon. Thanks,

Operator

Thank you.

Our next Mike, Partners. Mike ahead. Seaport Harrison question from please from Research comes go

open. is line Your

Michael Harrison

Hi, good morning.

Sam Mitchell

Good morning, Mike.

Michael Harrison

quarter. a nice on Congrats

Sam Mitchell

you. Thank

Michael Harrison

that believe the much you was the a said maybe in of pricing? in in and just was Can pure in of color how revenue Services if single-digits. I non-oil ticket maybe was up change increase Retail we more give on little wondering average I bit was us how on little you – dig a that could the much high

Sam Mitchell

Yes.

changes. synthetic as of And out, three premiumization is the in the change of you premium terms biggest oil non-oil three average drive point ticket, drivers oil there's as one this other primary part changes a second behind mix mix from the growth of And drivers. And pricing. past was to quarter is the then revenue. And one, factor they So average continue in growth. is ticket that the coming in

margin we have car pickup shift ticket So synthetics. significant a to and owners customers as

of That's long-term for oil real a And strength ours. synthetic a so more cars changes. tailwind the us as that's require newer of been

from to filters in bit less that and growth. some the call, quarter's to was digital marketing programs impressive. change services, non-oil to And So driver way. really strength but our OEM ticket services last driver that non-oil the the multiple on levers the more really price, then see long-term important of shared we've additional overall in new ticket been our revenue customers are into key us But all us the a drive contributing a in we for on provide battery little also we and that potential ticket drive execute quarter, of has change revenue, stores as a as opportunities we highlighted as with customers great program. drive to new to reaching also the These for

we're so our a to execute to in improve programs digital we spot continue continue better just that And marketing stores. expect as we sweet in and the

really right So, cylinders on now. all hitting

Michael Harrison

All Retail XX.X%. That the understand and to same-store Services right. sales growth. between segment, in same-store overall number trying the then XX%, the I'm overall was sales And was growth difference sales

should on So is only and than significantly be know stores delta what the is, really, the shown several new you've call in basis. year-over past the but that, up that's quarters. store higher a XX%, I that it, XX% difference count

growth part can on is math that's guess, of sales? help, considered of revenue with going I this that the So you not explain some same-store

Mary Meixelsperger

Yes.

acquisitions the a did we of in year. had we few Mike, that think, first this quarter I quite

just In from the the acquisitions. we benefit so so the of $XX quarter, contribution added that in stores seeing we and what we've both builds, part growing year, our think this acquisitions capabilities. you're that I accelerated just sales of did see the And did million system from over acquisition marketing an sales And through of of that help. rate provided our those that new stores are they up then did as and through terms at ramp again, is

a stores the that's and driver other we're rate So related new that's is the growth nice component there. to those really of that seeing

Michael Harrison

very Thanks much. right. All

Operator

Thank Mike. you,

question Our go Laurence ahead. next of Laurence, Alexander Jefferies. from comes please

open. line Your is

Daniel Rizzo

on for you? are This Good is Dan How morning. Rizzo Laurence.

Sam Mitchell

morning, Good Dan.

Daniel Rizzo

is of but government with that the for the mentioned was issues I everybody if or year? of in things to obviously will of have better kind having part labor later issues You QX. plan get end benefits else, a that like just wondering, the year you're the you the end assumptions enhance towards

Sam Mitchell

out cut You just little a Dan. Thanks. bit,

Daniel Rizzo

No.

So that's taking mentioned issues you exist labor that to other QX. to wondering, your them but or have if if help because are in running make you're I now, besides that you end government are benefits plan of stores kind sure you should a steps that for was staffed?

Sam Mitchell

of labor market stores. the impressed team talent in again, but team, The our execution been Yes. work with challenging, the has certainly the acquisition and really the

outstanding all, in of stores we know we saw on trusted. our across sales transactions. that our track first And system, performance, customer daily So they're we satisfaction what the our promise as EV all of growth in QX in weekly, same-store was quick we're delivering

we to got number we've – staffing a acquisition. drive customer been a in they it and new of been applicant flow an did where to a applicant flow flow. outstanding the government of able for help hourly our though We've the applicants tools and around seen have that continue that said, talent to marketing we're programs see move even That pickup nice and by We've deliver we ended experience. in using impacted has of positions, some force our So still on challenge.

because course, that had store, And the with that. in we've up we of only growing tremendous so units, our we're to with team performance up growth I'm and are of need not in the that keeping seeing, pleased we keep growth within with the

to program market program through approach summer our short-term we we labor benefits. And premium staff to help a summer, and in Our some has And the that's months, do the above the We that XX% pay stores the hope over always of nice package. in to range. improves the been through say, time. – got modestly but we've and that offer in going we've a X% think appropriately, pay to place put our environment us roughly continue terms

be world-class We the critical expect stores us, success. that in a really retail really But for having team our case. our to well to executing out is

to focus culture training that And creating so from to obsessed Valvoline Opportunities attractive providers. for key makes and employees retail on other stay for over, differentiates growth we what we with it service that us. are really

So to of future. advantage us sure past, source been advantage has our the it team to a to a make be invest we the in in and of this continue into source for competitive continues

Daniel Rizzo

Is color. But more All now would right. just than you're doing by three say, you passing easier this be you your That's been two probably ago? Global it's it And a warranted it in or prices with seems change the helpful. has for different little years Thank customers are it just accepting past. a as something or really the in than the just a our bit environment, or more, then through like Products, environment.

Sam Mitchell

and ability drive traffic and the the us, for improve Yes. profitability ability our the brand it we retailers, starts the I to and both what from said Valvoline of to has strong, improving. our the marketing strength and it driven to speaks in as bring that's demand programs miles installers good with But for environment installer been as customers et for with to and to to cetera. really been drive training, particular, Again, earlier,

environment, strong able other And a this always the been in up And versus lubricant going are always so for case. competitors. historically, been that's competitors. all And premium costs we've to capture

that passing that's going – pricing is importance be to continue it's to increases So case. through the of everyone the the recognizes given size that these of

up. And moving so we see the market

up. are also competitors Our moving

play pricing we into to negotiating in and increases costs to fully we our expect hit QX, us. the lag expect the challenges, some fully some chain hopefully, time plan And we're year side. And we'll supply probably that shape with very and of into But brand, lag normalize material be effect and there's term, fundamentals actions recover it the strength very dynamics chain begins that over will supply execute, to cost forward. at to in so increases been good a we're significant where look see to impact But Primarily availability moving that calendar happen. recover longer unusual the balance on pretty good, cost with these starting but challenges of time, And too. QX, see has the good. of the

Daniel Rizzo

Thank much. very you

Sam Mitchell

Thanks, Dan.

Operator

Thank you, Laurence.

Our next question comes from Stephanie Moore of Truist. Stephanie, please go ahead.

open. Your line is

Stephanie Benjamin

Good morning, Hi. everybody.

Sam Mitchell

morning, Stephanie. Good

Mary Meixelsperger

Good morning, Stephanie.

Stephanie Benjamin

touch to last it's wanted be. of – clarification, question, first I on more even would my a bit on a and one the

and improves. Any companies But color I most helpful. think as price does talked Sherwin-Williams, come environment this is you the should think commodity what kind just this down? that do we I once if next point? past, similar So fourth this in that come margins mean holding But I that down? of expand through as coating really but about expected of where material does to year, especially to margin understand when pricing the of price raw be kind year, to us materials pricing there think supply that as would look you have get or you shouldn't even benefit environment we've And it at in of the lags. next for you're the raw pushing where an into quarter pinch on environment the get

Sam Mitchell

lag, and in there's been a but both And impact, benefit a I've we through time, is what business we've lag before. some where I've recovering course, our with see environment, material these also market And for margins been quite raw been our we In a typically past, positive cycles falling, negative always in the are the to too. raw at typically Yes. rising cost typically price a successful price/cost then that of positive materials cost. but see

that looking business we basic the Instead, the America our that. international on strength not DIY strength At to to their drive then, miles next in plan too counting the plans the with expect time, we year, necessarily just as Retail we're we're same of improve. North working performance fundamentals volume significant begins strong strengthen baking continued so installers we're share solid our of of continuing as would growth, advantage for recovering in taking our seeing then course, into And we're and in that. to growth, And begin Services not expecting at business. to costs, markets anything driven

Mary Meixelsperger

would businesses, Sam, Retail Services as to In pricing Services decline, And hang just material Retail add on see our is the to our business. we'll that. I raw the we expectation in costs

So volatility retail is, which more coatings helps think in business, over to about. services the I that Stephanie, time, think, talked analogous of some you us the I business, that

over the And hang Retail do as to we'll Services going become business of that think the so I you're bigger – pricing on the will time. to part see business, and that continue benefit to

Sam Mitchell

in decrease point, emphasize that we've Services. never a taken Retail Yes. price To

Mary Meixelsperger

over I CAGR is X%, digits our last years, mid-single think Retail Services. in up five mean, the I Yes. price

So got there. we've really color pricing significant

Stephanie Benjamin

who Great. there of Is you share. side, then tremendous gaining Thank the obviously, Retail the or Services to it In helpful. would That's And on for me, color dealership you're out from? any your share can parse just any of more the gaining be data, really kind switching really and helpful? growth you. side,

Sam Mitchell

Yes. it Based on our new see growth, we're channels. competing from customer all to continuing

channel, DIY shift. us. seeing all the from new the from we're These repair growth for good sources the coming to been So of DIFM tire dealership customers have channel,

a shows of marketplace, we industry car we we're for consistently unique lot versus comes really it Lube surprising a counts Lubes, when balance what data the Quick not flat deliver that share have the And that's offering. broadly, the been consider and seeing to you when it has of So years. competing Quick

model, we sophisticated the some about competing And stays And industry in as to Trusted we of to taking stores flat, digital maintenance. strength our with significant and Quick, more we have so counts, just customer detail, we then a Quick team and Easy, we our preventive the talked how approach the as and that share for the know care stronger continue we're Lubes. grow marketing. And from car

Stephanie Benjamin

Well, the thank you so much color. all for

Sam Mitchell

Sure.

Operator

Stephanie. you, Thank

Our ahead. of next Chris please from Chris, Shaw question go Crespi. Monness, comes

is line open. Your

Christopher Shaw

are Yes. everyone. Good How doing? morning, you

Sam Mitchell

Chris. morning, Good

Christopher Shaw

morning. Good

just the but as much sales down drill as qualitatively. more, Let's on same-store not quantitatively

office? bigger or were don't side, I are side, on guess, you commute. sense they ticket as some that maybe flush the having share me just customer, be understood money – the mean because understanding all either So reasons the But in helping with On a coming credits were significant so gaining know, the is it things you the tax What that's seem the miles-driven last I share. gaining customer? people habits. I you things and made not lot the this was change it kind think it add? back to the fact good just psyche share unemployment that guess, up? are share share you ticket, do people gains, are that, why government what their are people change whatever year, the still some they'll Is because it's numbers to behind quarter. to just to of I'm that's seeing What's changed of the curious, are really anything closed I Is

Sam Mitchell

convenience is one for continues just thing demand that to grow. yes, So I mean, sure the for we know consumer

like basic so service with supported experience happens is them by their process to key. in our our continuing experience these very what and create effectively ability outside preventive approach with to us strong market our technology to really stores deliver important. those and returns. to trust to enabling present the is both are the digital platform so customers' to why an the time is created our differentiated we've services for they the And stores effectively fundamentals the And for connection growth. our customer and drive to what's And And a maintenance we're ability save that Valvoline the

is the this sales impact so for us. say, driven just big about, helps helps the – really short-term is And there It's But is nothing straight environment – having growth is that synthetic and driving, year obviously, same-store be that XXth our miles will dramatically us us. a growth results. improved on of

customer the experience yet something how and that have levers built learn continue target is and operate better how who haven't it's the what future and those Valvoline that So all we customers at we all we about. get improve experienced, different into to

we is that and able a fleet while strengthen is key value long our procure too, us, us. proposition. service encouraging speed to for so smarter and we're convenience, And of us. getting be what's maintaining owners, in do that the grow term, opportunity that for as each see how will And for we're still front and that our on we year, nice we see better that's So includes opportunity easy team offering an dead-focused And that car to owners, owners. make vehicle where deal

Mary Meixelsperger

a would a business importantly, macro very I we convenience absolutely add. are probably trend dissipating. Sam, directly This toward not data-driven is that And trend as business. very, just also It's into. plays our retail

us. been with to how create And out We huge looking services. our know those and And we advantage just that have for to are to a and new the improve for we they're data-driven competitive there. and we differentiator auto long aftermarket on market the at service. lot key customers. our to use an looking there a to of simply And in data operators customer able vehicles We other is information customers improved behind consumers as the asked capabilities what that – further are that business marketing capabilities. not have business experience a these and the well. their versus We've ever continue that target when time, it's collect And and is smaller – may preventative teams a broader customers, maintenance competitive for our a faced

of convenience for we us with the satisfaction levels to have So services just the awareness in think, customers customer I to coming can finally, customers do is think of retention really huge. record what the allows and our And back I us. combination,

us market experience that We has as one moat just So that's and customer think a model I significant really is so take competitive significant critical that to created well. a share. allowing

Christopher Shaw

you that are showing big anything are that doing you like think That data is not interval that. like helping. just any things or in really drop It's drain

Mary Meixelsperger

a all targeted using into absolutely. our next change. meet know understand recommends come Yes, their for to understand their customer we OEM play we is drain likely of when their vehicle, things mean understand marketing. those interval. I when we're – oil what We We

Christopher Shaw

you. it. Thank Got

Operator

you, Thank [Operator Chris. Instructions]

Sean Cornett

the left Nadia. line. on sounds don't Okay, It any we have questions like

think wrap I to call. the So we're ready

Sam Mitchell

All right. Thank you.

Operator

disconnect Thank Perfect. no for Thank lines. questions. all and further We your currently you you, Please joining. gentlemen. ladies

Valvoline (VVV) 7 Aug 212021 Q3 Earnings call transcript