VVV - Earnings call transcript Q2 2024

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Operator

Hello, and welcome to Valvoline's 2Q 2024 Earnings Conference Call and Webcast. My name is Elliot, and I'll be coordinating your call today. [Operator Instructions] I'd now like to hand over to Elizabeth Russell, the floor is yours. Please go ahead.

Elizabeth Russell

Thank you. to morning, Quarter the Valvoline ended XX, welcome Call XXXX second and March Webcast.This and released XXXX. morning, Valvoline's Fiscal Second Conference quarter Good results for release, in our on Relations website with viewed is Investor be investors.valvoline.com. should of which presentation that This earnings a at copy available conjunction

our preliminary and these Flees, this our morning's CFO. is we Lori Form Mary Exchange XX-Q note that until and On Please with CEO Commission. President; and our Meixelsperger, results are file the Securities call

Slide statements. on our on today differ to statements may shown subject the of As X, historical such certain from are remarks materially and of based to that that any cause of date risks statements actual facts are presentation uncertainties statements. of current as results are These not assumptions are this forward-looking forward-looking and

obligation by required key noted. remarks, results are no We nonoperational unless non-GAAP statements business. assumes in law. understanding unusual, items, will basis, In ongoing to believe on be nature. update restructuring forward-looking our adjusted of presentation or enhances for discussing results our the are approach and adjusted our we any unless this in which Valvoline an Non-GAAP this otherwise

be amounts of is used and management's by our reported A results to appendix. and discussion provided measures information comparable is not presentation similar other The business companies. GAAP non-GAAP our included a reconciliation measures use and adjusted key used under non-GAAP to of of in by may the management

operations purposes GAAP company's Products is the Global reminder, the segment the continuing represents Retail of discontinued operations as a Services and the As business reporting. classified former for

second and turn cover will results. then that, our highlights to look from will a Today, Lori Mary with will at over I quarter, With Lori. financial our it the begin key

Lori Flees

joining for today. Thanks, all us thank you Elizabeth, and

improving to adjusted adjusted this network Profitability in system-wide quarter We XX% $X.XX strong with brings second coming with XX% stores XX from $XXX total we line per network and the million XX EPS new additions sales million. This to XXXX, XX net to top with over was quarter share. franchise. with to $XXX growing XX% year-to-date franchise. store improving to the our across added the EBITDA growth of saw XX at the over For from

quarter, the million over approximately of well this purchased million Also completes $X.X the share commitment returning billion shareholders X time share business. just repurchases. the closed we through ahead $XX XX-month we sale shares, made Global of the at authorization we repurchase the to This Products

to quarterly of some our details additional Mary share how results insights these like I'd the Before strategy. covers on results, into the fit

driving We continue business. of the existing to focus on potential full the

key same-store metrics this sales strategic of to One growth. pillar the is

saw X.X% growth contributor the I by and the mostly system-wide this a this driven revenue on retention As system, testament services best mentioned, to to quarter, in a growth. employee change across improve sharing largest and stores. The same-store was continues their improvement service in educate services will built the need. increased penetration. practice guests additional NAV we the training the we The on to we focused our highest sales across which QX, penetration automotive recommended manufacturer team's service our how saw vehicles tenure is

modest February over to weather for a XX.X have the recouped and transaction improvement. customers January in services the On we start side, choppy million to the the performed we've Year-to-date, ended after due volume country, systemwide. events with across quarter

QX We're full of our this The potential with improve to regard. our in other performance pleased part cost is managing driving profitability.

benefit management our labor created strong Specifically, exceeded the second operations, in quarter in our significant which store company expectations.

quarter, events that continues during happened in scheduling, manage improve. especially to Our to weather the ability the

also expenses and for quarter. stores company store costs supply chain this saw benefit a We from improved

due leverage of the half significant drive labor in volume the season. to the we As the back we see increase enter summer during year, typically

we'll While of have remaining a do to strong benefited have not the year-over-year year-to-date, of we that the use year. labor expect the tools efficiency as half for us management improvement continue to in labor

to quarter. I'd growth. over We're XX network net like network an with touch X% X,XXX our on pleased quickly brings store additions It really year. the stores, to accelerating Now prior the total growth this

We of ground-up see continue acquisitions. to a and balanced builds mix

quarter the net side, franchise the On ground-ups. half were of additions this

line we're look As of to original guidance the of track year, additions store for additions from we XX our have XX with on the total XXX remainder franchise. XXX in at the with to to coming pipeline our

us our results. it to to turn Mary through over QX financial I'll walk Now

Mary Meixelsperger

contributed line Slide XX% look to a increase grew a X, Thanks, and comp. Adjusted continues company over stack quarter. between franchise balanced sales quarter. the just Lori. to same-store be XX% XX.X% we'll on growth closer The X-year basis. net a and take for System-wide X.X% the growth over growth year. $XXX prior and prior consistent quarter and million, top the On X%, over this to for grew respectively, at Ticket was year our X.X% sales

of the the lo revenue largest shared, non-oil-change increased balance ticket and coming with As premiumization. from growth driver was net pricing

has of of to contributed contribution holiday drivers This shift comp at leap day results. includes day, a financial XX% mix. growth overall the the the look of coming other the mix X% to a Slide from comp. net and the Transaction just X about over impact Easter

This gross an margin look driven by the XX.X%, let's at basis discussed line rate. improvements labor from year-over-year. coming improvement our leverage XX We at Lori saw expansion from was to earlier. largely the point First, XX.X%

improvements line chain while saw held the drove we sales net and quarter decline. Sequentially, benefit each leverage, we we in of year. sequentially as over SG&A and by lower point saw percentage a modestly are additional first prior meeting expansion. Top also basis XXX year, supply decreased a from saw basis travel a point XXX the company driven growth costs. This was lower while sequential which from meetings, costs labor

adjusted causing the year-over-year, $X EBITDA the prior XX improved basis points over about year and margin in sequentially. points deleverage XXX of basis Overall, increased million margin amortization XXX basis Depreciation rate. points by and gross

leverage the of we the comes For the the of our capture that with SG&A business. to half seasonality back year, expect

gross However, we margin expect leverage labor moderate. to the

take Slide at we'll our look On profitability X, a metrics.

adjusted average to XX% grew income partially improvement, which by just by per discussed. half investments million net growth. largely income The increased driven interest growth rate $XX.X compared $X.XX XX improvements XX%, adjusted EPS QX, gross margin was from count shares about as of grew driven came lower in The million, offset XX% increase net the the Adjusted the in and the year. income SG&A increased of sales to to and in from contributed EPS lower For of Sequentially, change net we by expense $X.XX in share. operating about prior balance margin share and SG&A. reduction

Slide the balance X. look cash to We'll sheet position. and Turning at

repurchases. During via the quarter, we to million just share returned shareholders over $XX

earlier, of also the $X.X was March, revolving tender quarter repurchase final In the we under billion million of end senior with a $XXX April line As credit. notes. the completes Lori in settlement the completed That offer and borrowings authorization. tender cash and mentioned equivalents cash announced to following the offer that of XXXX utilizing made

sale This from proceeds Products of recur QX, the to is This earned uses half the the commitments the we of on business. is back complete. in made invested of fulfills the the In sale regarding remaining not year the $X.X Global income million tender now proceeds debt the the offer Products that of expected from net of interest the the remaining business. we Global

million of were to $XX million, operating from flow over the statement. activities Year-to-date the a $XX.X Turning cash decline cash prior year. flows

the in most a Global As the onetime year of reminder, which a the supply of establishment Operations benefit, prior decline. with agreement drove this Valvoline represents

to creating increase in expect the a new will accounts Additionally, implementation system back in of during our partners, franchise receivable the ERP that short-term our quarter normalize delayed the of year. half the billings we

report we a implementation in ERP our to on weakness went we material the release, that As system press X. related noted January to live expect

implemented by controls already expect A to statements financial to and remediate completed have plan to the enhanced underway, QX be We fiscal is accurate. year-end. manual this intended we are for ensure

complete, look our is a narrow guidance fiscal guidance. Turning outlook. expectations, our we at narrowing the to original year our year for our in with it to 'XX, We'll from With substantially half we which Slide X. appropriate are believe take line

growth, to $X.X $X.XX sales with the net to revenue for expect same-store billion of year, X% For we X% billion.

adjusted million. For $XXX EBITDA, to we million are range the to $XXX narrowing

EPS, to adjusted the I'll share. $X.XX updated for range to Lori to Finally, over $X.XX per back is turn up. it wrap now

Lori Flees

I've completed Thanks, growth thank delivered We the $X.X added new the profit take and like authorization. share for minute to their and to continued stores Tennessee. alongside give I'd so partners billion franchise out hard our our repurchase in fiscal quarter, Mary. team a XX recently in for strong XXXX. and work officially topside working to shout the time could first a certification. special that I to achieve team Ottawa, the of want spent my team, I half training also

the Now to call over Elizabeth I'll turn Q&A. begin to back

Elizabeth Russell

Thanks, Lori.

Before on open everyone With line. one start to the I operator, want line. so get questions to a to Q&A, the we to limit and everyone your we remind that the can that, please follow-up

Operator

[Operator Bellinger with Instructions] First Mizuho. question comes from David

David Bellinger

comp continuation of something the the one us to that the Just of any First behind the help first sales range. seen not the reflective in of QX reasoning half a simply is you've on change in Is year line? the you've the of on trimming comp and upper guidance deceleration seen indicative guidance end the date? and frame

Mary Meixelsperger

David, your for Thanks, question.

So And adjusting pretty X.X% of comp from basis seen half. back of range the the quarter. underlying expecting versus the We're day. the performance same-store did to tempo have reflect with change, half in in point we the a we're really in order XX down third just for benefit not business end expectations leap change set year-to-date of our the start nor sales about any any front top consistent the

strong I comping really we growth some half. back would from say prior the back up transaction year that half, against are the

in closely. we're going to expecting so front performance overall, consistent that monitor expectations pretty really the half. we're But half back versus the And

David Bellinger

question kind just That's period. us the And that. this potentially out repurchasing on equity any is trade-offs exhausted helpful. you now go-forward versus senior second with term of help new notes potential capacity talk new growth some think acquisition buyback of nature, through Can potential use through in so or even then strategy? about the QX also would longer of the And Just here, buyback in of Appreciate how that. terms way? all any in think you my store capital of added the

Mary Meixelsperger

our good A that reiterate David. are of we're capital Again, growth acquisitions synergistic opportunities That builds, open -- to through accretive is new question, focused and store allocation in new with just really stores, We're business. at the growth first certainly priorities. I'll looking of growth. coming terms on underlying

want we leverage that around The second is employee into our of adjusted kind basically agency benefit balance our obligations. that's sheet. stated X.X rating priority to that and on a X.Xx capital leases leverage We've takes account ratio

relative at currently the the of X.Xx. And about so leverage we're at range X.Xx our goal just to of end X.X trending to higher

to course, the future so continue repurchases. going capital in And monitor excess our third return shareholders priority we're relationship of share is opportunity via of to for And to allocation share to repurchases. that capital

continue that So on our basis. investors our to closely monitor a to we'll with Board quarterly report and

Operator

We now Stanley. to turn with Gutman Simeon Morgan

Simeon Gutman

if follow-up. first Were in an that didn't curious And unrelated any is spread on then there's rate? this in One run markets a geographies. difference there have

forecasted through? strong higher You coming lap second the that mentioned less a less because efficiency or have of -- half. in Is you because labor costs labor just or

Lori Flees

I'll Thanks, across it was say, hit Mary our the majority cover very It On first geography, questions. one in I actually the and for across of board January. unusual most, would join. geographies. to Simeon, the ask

performance, weren't comp network. the swings across So when the you there at significant look

think So experience have unusual, just and same as it was we in I January. would say the did I most retailers

in I very pleased the traffic with of would say the we return were February.

when we modest just quarter, closed that. we had And the mentioned, given so out as I growth

with I So and felt the pleased think across geographies we same-store traffic the very performance. the sales

Mary Meixelsperger

year, prior the expect the seen performance to Really the what are to strong year. in we leverage back just consistent in to labor the leverage our labor expecting see labor in we've half. of side, very Relative that on we back in half Simeon, we saw incremental don't prior see second -- we the quarter. here So the with had

a continue leverage, from see we're And we not going anything we're that sequentially unusual expect to to so expecting labor labor perspective. while

management. teams been our expect excellent do job the continue they've in to labor We to doing

the smaller the that half year. back kind leverage just in It's quarter, of in is smaller the for back of the the me, excuse the in first we half saw the opportunity think quarter year is of -- second the we

Lori Flees

just labor. teams -- in times. It schedules add, it impacts In different expectations across in across given is manage -- and the expected to did I'll sporadic year-over-year around are was typically bit quarter what the Yes, and to Simeon. exceeded some the we able QX, QX, shared excellent we more weather trim and see at a were down an expect or we labor. more they And regions challenging job what to the improvement manage

the as trim those the came the store. coming schedules we see then come week So into back, when could to the forecasts and add that back labor are typically in, we they serve ensure the following customers when traffic

put teams it's frankly, we've effects. benefit. used and to really capture approach And we place, I'm winter proactive exceeded as we But able tools expecting the perform our So the season really in weren't to in that just were a around expectations, our that and managing really pleased it well.

To back the leverage And get of the year, the traffic Mary's half when business -- the you season. It's for use leverage at from continue leverage we're that our the of to not it increase. QX margin. do we typically the year-over-year the look just impressive always we benefit believe the -- tools point, we possible we'll labor look that we is was get an quite given just when in and quarter-over-quarter,

Simeon Gutman

lag, where on can oil sort follow-up, It stable. in I price is a ask any to your catch-up on as proxy where and/or looks you like comp go there. prices stores? a corporate oil, where And of terms that's on benefit But there on are As pricing? of cost think are the base you Curious the is meaning pricing franchisees in based are? I

Mary Meixelsperger

first we're some underlying pretty costs, modest half Yes. We some product another It's the of just We've to in supply changes announcement. saw benefited increases half see declines been But year. going our in of -- modest modest interesting. seen in recently some in the the year. We've from costs area. the decline back chain we modest lubricants the seen

change have It there's our has material pretty a for nothing. So it a business. on to be meaningful impact to

of impact see And that to back not we're have so really expecting a half the in the the would on business anything really year. material

situation. macro we Now continue to the monitor

on. in expecting the providing, we're With the updated issues that right seeing that political anything of keep now But the kind half. we of we're see close that's Middle East, the and something back in macro really terms in eye not to guidance a unusual we're

Operator

Our question Sachs. Kate McShane comes next from Goldman with

Katharine McShane

of year? hearing We we the were openings wondering how should of opening think higher about remainder from for are you to just due of issues cost? pace store in stores And the any the franchisees

Lori Flees

certainly against Thanks model Yes. on for not franchisee -- last the something is We Thanks, question. year typically I would the side. Kate.

X delays that's of and from into lot the recall, was year. we and really about Year-to-date, to XX XX net a you units, openings due supply feel had franchise engagement compared QX last our they've QX, As new QX. in we've delivered chain new been to we pushed of some But partners. opening excited that that

this in how supply better XX% ground-ups, the quarter, of openings recent the that some we're a open given put were those feel I And place to And think ground-ups. new most of much forecasting we things standpoint. chain about we in from net

opening so warehouse to a most a store. been talking around a move some example, recently, holding gate-limiting signs that, an general in As be wouldn't our franchise we've partners that to

can and So on franchise just their and our getting collaborative how really track. proactive partners with keep openings we

from half, expect the to As to within X as on mentioned, franchise. given be XX start to coming we XX XX the where -- do the and range the really XX X we're first I at well

and was QX than expect more it do last to we year. QX be balanced Now

we the in are would partners, later where ground-ups, or really to don't So the in say year anomalies we I some about of us into ground because stage. both in we at But guidance. sort any expect general, will which the than good this we getting things hiccups relative franchise weather that our we'll have there'll will little come a of feel January, some and impacts have liked. be of

Katharine McShane

second in between the between quarter? just And operated Great. you talk company franchise the just if wondered the comp in there and a as just difference difference second the the I could stores, question.

Lori Flees

is more general between what's on is it what consistent terms more between ticket than been In franchise can split our partners performance, Mary, terms interesting in of us changes. comment you comps the oil and and has of maybe that. And the

Mary Meixelsperger

Sure.

we in ticket a by But partners. overall consistent things interesting else, store both both of of all of all quartiles quartiles And terms performance very them franchise consistent and across bit with is that see bit our the little and it's transactions on franchise the and performance. -- little outperformance And about quarter improving how there. ticket ticket in across stronger the saw level been the did we see between of of performance. performance stores the company we terms a really think very, we of one transactions X So again, in

that's really -- consistent performance. so just see And consistency the encouraging of to

the factor And to between store as that part, process So see consistent occasionally that sales the a in forward. adoption think SuperPro differences that's we will franchise do But critical comp for and consistency cadence I the stores. across performance. well. We franchise consistent see of continue and related company some driving really going and of to pretty in most There's company. our marketing think system likely our that's systems very

Operator

Citi. turn to now Steven with Zaccone We

Unknown Analyst

consumers in down This And same on We've provide slowdown cohort. can relative your is lines, how some to business value of any if along low-income you talk you on We trade about tighter to that among Avanti you those in to heard attached budgets? the commentary peers budgets or are tighter Are consumer. on non-oil-change wanted on for ask sales? sort Steve. seeing then revenue

Mary Meixelsperger

seeing seeing trade So to returning a of income consumers, having time not kind not macroeconomic the lower down. not higher income environment we've inflationary effects whether We're any spent seeing terms any our any lot consumers. impacts of versus rate lingering understand in We're not we're we're their seeing U.S. to frankly, from stores lower looking impact. And in a retention of broader the or the in

continue close no really to so our but results year-to-date the nothing report in on terms going And of quarter, -- it. and a for second keep to to we're eye

other We've on types of heard service And we're et commentary terms to those closely, we've to well the stores, other as an our frequency -- of us consumers debt food retail businesses. business. And great got cetera. of able demographic fast not from our to and some their it so help seeing monitor impact we're going really incredibly good some data visiting on in our understand be and but of

seeing not have We analytic said, capabilities. And down or I strong consumers. very a we're trade related differences any any to lower those very, in as retention income data

Lori Flees

days those getting that sure now adapt ahead started to look Yes, and of making no as or business at sure service. I'll just miles add and premium look the on we're typically down, certain those when or that income serve between make anything, then seen at been just at stores but she that And we we've that those driven customer services clusters, to again, to economic different anything. we've would haven't economic visits, you we -- we've even you when we're, and transactions, trade talks look analyzing put about be tones sure interval looking level are we missing clusters in the customers some demographic -- customers. at our at days because looking not our levels not and of of them changing. We And a been hear, in make

Unknown Analyst

seeing in follow-up, And You that partners? bit some how into partners working talk as Great. with discussions franchise you big slower with you? your have about electric a new you partners, a factors are then more can vehicle interest adoption little franchise have but any

Lori Flees

been at the EVs. forecast look year. car last temperature where question would around and for But So doing anticipate than think relative around the of higher EVs at have We car we do the In to sales penetration that's your hybrids or vehicles. current serve going would and is incubation don't definitely I it moderated first has We're the long-term for vehicle. that parc appropriate to services change the a you general, I research be percentage obviously, obviously do parc, the if electric a we EVs continue current today battery of hybrid. same of materially. ICE with to And actually

there that car always parc maintenance a as grows. hybrids, services we that number services and And at additional we look are of provide

from franchise in As of different it the of very on middle no have are where little areas preventative geographies those EV country some impact more higher, the relates is low, and where interest. is the also franchise maintenance partners, to the impact is But ICE they of some any our EV sales even EV are that in sales of an geographies partner quite preponderance obviously those underserved of perspective.

doing the on And so to they don't and sure we're to serving really entrepreneurs us remain business, car services. they maximize lot interested a make EV-related that the they in they are on work our as into wanting placing they're upside -- existing parc, more invested capital connected that the their although on see return see franchisees

part impacting interest EV interest of levels I levels, the your new of is terms last In was of don't question, around partners. which the think

before, have to in in franchise and We've potential We with scale partners. business. very dialogue smaller have partners couple are around the new shared as continue productive joining more conversations partners, signed we've of with a Valvoline

So wouldn't a more progress, EV franchisee but say nothing continued at to stage, high on report is now side. I great factor the right this

Operator

Partners. comes Harrison Seaport question Mike next with Our from Research

Michael Harrison

certification. keep topside time your when for stores. of getting an eye you on next your one I'll in out I'm the Lori to Congrats

Lori Flees

Thanks, Mike.

Michael Harrison

some your from as next you wondering an curious more year locations? the we performed battery available winter Now at offering and the that make how that I update get the battery if upside could your relative offering And months, of to that expectations? months on there's we're kind during if those additional of was just past winter

Lori Flees

something of is as The service question, team. good Mike, we've spending is variety complicated on been a more management it's a of Yes, and just the take batteries a the long time more can't let a probably that the lot because battery diverse as they in as stores and but service. store, space sit a if them air number they a you're time not in for certainly placing filters, offering lot to of you them

so that the of And to have not batteries register frequency time batteries to battery relative car that a if deliver the requires partner trust with we they a delivery terms last mile has It will health. also and complete we red parc. don't we guest. to the or the the every in battery every service in don't the yellow because every earn time that come its we And test test time,

devices last little the the the and plastic cost, we the it improved you of more the devices, get lower more the so ensure really change vehicles testing of can tricky a the then some read. that testing And to to OEMs accurate that around makes look putting testing continue bit devices one nodes, of the at is some a to design as continue because

explaining opportunity in more So all these because there we believe things is are battery. I'm

remainder do in of this it it's opportunity because pricing there, to year be on will for We have sure. the we're next market. there's and into an year, and we providers working that service part area for more of our the fantastic relative comparable plan believe And

Michael Harrison

the understand you too may then are or detail in get update just here. be issue, And I what internal the you helpful? understand much any ERP fix And that us and you to problem be us that you done not it control a want into where broader give and would was maybe help provide if what color But process? to mentioned can on right. All implementation to needs

Mary Meixelsperger

Mike. Sure,

system, of that's internal We which legacy -- chain the perspective much And the our So by our the controls Global monitoring is news documentation the and saw primarily live went some in related good scheduling around controls versus general more quarter. driven system to in new really Products was technology around challenges X. new related That specific we're system. But information on by controls the quarter the control in a job system supply was the to implementing January with around the system IT requirements. business. system sale we driven access chemical/materials monitoring implementation an the changes user and issue retail very implementation, from ERP and was

highly then operating that by store also implementation. operations automated. to we material the system no we've franchisees. design I addressing day-to-day able ensure we've were And that mentioned And I the directly business some not customers had some of around our relates impacted say business our consistently more is our that operations. serve the the and support would saw saw franchisees. our issues we And in some to been to design on impact support delays our that that had The invoicing we're systems quarter to processes. that system issues

as mostly, controls. general I So around IT said, the

Michael Harrison

lot at that it Or this is is point? a implementation rolled complete to be needs of And stores still where out? there

Mary Meixelsperger

the term, to some level systems store to operate. And chain we to and leverage some supply we the analytics affect didn't some And then real of and term, benefits is -- the operations. And really It's those and the provide the financial the system we're No, implementation again, system. enhancements it's systems it that continuing the to over over complete, complete. but the forward improved there's capabilities able new increased platform. longer efficiencies to provide new we'll go the system for the reporting be of longer in as

IT on of core by and intended. making complete the also plan remediation we're we general on focused focused the which end to control certain for shorter that capabilities system But are fiscal term, functioning as the environment, expect year the the just

Operator

Our Jeff next Zekauskas JPMorgan. question comes with from

Unknown Analyst

in Jeff. Could quarter break the product growth by volume change and volume volume on Hang down for you is This Lidia other oil from your from sales?

Lori Flees

XX% So comments in if of our and I represented which Mary are sales I XX%. about system-wide breakdown, you're -- about same-store you you our think her that think at was talking sales transaction covered look same-store about -- ticket

contributor the the that price both ticket side, penetration, followed and overall, was premium NOCR, was largest Within and mix. and pricing by

in quartile because all strong to we in continued it's there's very our we continue means not think, non-oil-change just opportunity. revenue. I from So coming coming stores. our quartiles, of drive actually the which from And feel general, growth services great or It's bottom added

bar presenting in we're sometimes And learning you this services And added because the you reenergized competition up we our put short-term the best practice team that a and when did system best So level our services for the to to just this within it they our team and quarter. average effectively run the the it around of of burst, talent higher a keeps but the out set it last the they increasing. is increase gives the carry and continue and to best And practices did services practice together those competition, our really game the them pleased to presentation. guests. really what

performance, pleased So see we continue which we're with. to that

Operator

Jordan We now with [Operator Jefferies. to Instructions] turn Bret

Bret Jordan

been services traction? saying you're at where category you you you in could the specifically sort add of sort thought here. where services might saw in -- I talk expanding from know the Could about And menu, looking what you've talk you that of most services the you

Lori Flees

Yes.

last increased sort the that. -- in -- years, the been beyond of last we quarter, year And just basics. So we've on it this year, in this we X.X focusing

information visually That's making and cabin visually air batteries. pull with things it inspect cabin filter, show we every to air comes we explain would blades filter, that visuals, air that the performing. and things offer visuals the And share we are filter the and We how customer So Those and consider those meaning we guests, are are to bulbs wiper light them. why. that down is sure can basics. what the

During it removed when service I a the get that's window we the basics are that COVID, things from back And takes getting had on in our single that that think that. customer, the for X,XXX process. just to to try operating to stores, technician like into back And every of you we're process time.

with a brand customer it so they actually the The new or changing out, with side other should they side not one be it. air can taking filters thing see showing whether by is

team, we've big of that lift. across basics simple provided have and just the been very a reinvigorating they are These our part

things did They that services required automotive I manufacturer talking on These XX,XXX-mile or required mention recommended are points an say, a at intervals, Now we quarter, checkpoint. are recommendations. saw visit that my XX,XXX-mile, or certain this every every are year. not OEM in increase typically

they're And the our items. bit made on testament And the quarter. both trickier perform saw this retention basic because a those real to team we've and little we services has OEM it's just training a sure of increase visual than to the that biggest the penetration

great we just added when results. last of the services then training around and bit and trained the So ensure And little we things a we around reenergized team it's service transmission in tenure, quarter, really combination a got again, like that and was we and have we that one a equipment on store every , have increase was operational. saw something that that's this of big it, in energy right

You and forgot, asked wanted about I had services, that mention to I well. as added

can clear provided that quick, the by we additional an -- doing guest, we have will guardrails report. easy be that we just that to R&D for And high trusted team. deliver that, meaning can our have to quality. a the but have make store. be at quick we a for perform around to to service anything have our very I it looking in services don't keep We We that trusted, easy is yet team say at and not just

at And want every again, because trusted. the make there sure that so to for us are to store to to the we added raise, continue order are look across add sure it We quick parc reps team need enough opportunities bars that the make the enough that services. easy you car to service, perform we those to and in has

So continue expand service to report, and nothing but our look how menu we to we'll at it.

Bret Jordan

build-out you cost. think also process? at you where Could talk store about Great. Okay. that I And maybe formats were in are you lower looking at are looking that --

Lori Flees

Yes.

X development I our is one our things teams, team been team, The would So design. part that to right operational would relook some of we we of operations the the store saying together parks. And -- car think place went ago a is be to volume is the store -- team only combined the real build has estate and I say store. book-bay the been our to a working time and at in X-bay franchise see we eventually because certain that working with have

But third or the there for are X some X areas years. don't where need probably you bay

easily operation it company the as can But where spending a store, So start And the store and that added project, impacting be a move building capital of where on you the and at acted started not -- electricity team to. store, would minimizing bay. that, but to that's and something day-to-day add that the of operations design water the build they such the designing the the impact. our to a the third build that created of that could it without want that instead has leading out a are X-bay has modular

this I that and franchisees year's next with an we've of Now more share year, that changes, we the that we -- of lot But that, about as engaged we're guidance. the we developing move material next active we is it started. before I expect of won't start as energy. conversation into know year, any But had ever well see opening our designs we year, the this some see impact were wouldn't of stores a year to that talk for pretty heavily because but we'll in we'll immediately those

Mary Meixelsperger

the also required that, And a been same -- team very on when acquire we we've would Lori, store. that's transition taking capital out cost I that add focused of to has

acquiring really helping the seen we're acquisitions. cost invested we've capital when improved those a to store good so investments relationship there some And in drive return related to reductions required that's on to

Operator

now hand I'll Q&A. our concludes closing This remarks. back Russell Elizabeth to for

Elizabeth Russell

for forward look to discussions call. following Thank concludes all ongoing our today. you today's call our today. your This time for We

Operator

has and participation. call concluded. you now like thank gentlemen, your We'd for to Ladies today's

lines. disconnect now your may You

Valvoline (VVV) 8 May 242024 Q2 Earnings call transcript