On November 9, 2023, Valvoline Inc (VVV, Financial), a leader in automotive preventive maintenance, released its financial results for the fourth quarter and the full fiscal year ended September 30, 2023. The company reported a transformative year with significant growth in sales, income, and earnings per share (EPS), alongside a substantial increase in its store network.
Fiscal Year 2023 Performance Overview
Valvoline Inc (VVV, Financial) experienced a 17% growth in sales from continuing operations, totaling $1.4 billion for the fiscal year. The company's system-wide SSS saw an 11.9% increase, contributing to the 17th consecutive year of SSS growth. Reported income from continuing operations grew by 82%, reaching $199 million, while EPS saw a remarkable 102% increase, rising to $1.23. Adjusted EBITDA from continuing operations also grew by 20%, amounting to $380 million, and adjusted EPS increased by 62% to $1.18.
Fourth Quarter Financial Highlights
For the fourth quarter, Valvoline Inc (VVV, Financial) reported sales from continuing operations of $390 million, a 16% increase. System-wide SSS grew by 10.0%, and the company saw a significant 505% growth in income from continuing operations, which amounted to $75 million. EPS for the quarter increased by 657% to $0.53. Adjusted EBITDA for the quarter was $109 million, up 25%, and adjusted EPS increased by 86% to $0.39. The company also added 48 new stores in the quarter, with 26 franchised and 22 company-operated.
Balance Sheet and Cash Flow Statement Highlights
Valvoline Inc (VVV, Financial) reported a strong balance sheet with $757 million in cash, cash equivalents, and short-term investments. The company's total debt stood at $1.6 billion. For the fiscal year, operating cash flow from continuing operations was $353 million, and free cash flow was $173 million. Notably, Valvoline returned $1.5 billion to shareholders through share repurchases, with $212 million remaining on the existing share repurchase authorization at year-end.
Management's Commentary
Lori Flees, President & CEO of Valvoline Inc (VVV, Financial), commented on the results, stating,
Fiscal year 2023 was a transformational year for Valvoline as it was our first year as a pure-play retail business. Our system-wide store sales grew nearly 20% to $2.8 billion driven by an 11.9% increase in system-wide same-store sales."Flees also highlighted the company's strong position for long-term shareholder value creation.
Outlook for Fiscal 2024
Looking ahead to fiscal 2024, Valvoline Inc (VVV, Financial) expects to continue its growth trajectory with projected top-line sales of $1.6 - $1.7 billion and adjusted EBITDA of $420 - $460 million. The company anticipates a system-wide SSS growth of 6-9% and plans to add 140-170 stores to its network, with 55-70 coming from franchisees.
Valvoline Inc (VVV, Financial) has demonstrated a strong fiscal performance, with significant growth in key financial metrics. The company's strategic focus on expanding its retail services and store network, coupled with returning value to shareholders, positions it favorably for continued success in the automotive maintenance industry. For more detailed information and analysis, investors and interested parties are encouraged to visit Valvoline's investor relations website.
Explore the complete 8-K earnings release (here) from Valvoline Inc for further details.
