Tear Sheet: Valvoline Inc. Will Sustain Consistent Performance and Credit Metrics

Systemwide same-store sales increased 6.5% during the third quarter of fiscal 2024 (fiscal year ends Sept. 30), slowing sequentially from 7.7% in the previous quarter, with non-oil change services accounting for most of the ticket growth, followed by pricing and a greater mix of premium products. S&P Global Ratings expects service penetration improvement because of continued sales force training, higher transaction count, and approximately 160 new store builds leading to a low-13% revenue growth for fiscal 2024. We expect similar trends to support roughly 13% revenue growth next year. S&P Global Ratings-adjusted EBITDA increased by about 25% for the first nine months of fiscal 2024 on good topline growth, labor management, and reduced supply chain costs. In addition, higher penetration

...August 27, 2024 Our projections for more than 10% revenue growth for fiscal 2024 and 2025 are largely unchanged despite recent modest deceleration in top-line growth. Systemwide same-store sales increased 6.5% during the third quarter of fiscal 2024 (fiscal year ends Sept. 30), slowing sequentially from 7.7% in the previous quarter, with non-oil change services accounting for most of the ticket growth, followed by pricing and a greater mix of premium products. S&P Global Ratings expects service penetration improvement because of continued sales force training, higher transaction count, and approximately 160 new store builds leading to a low-13% revenue growth for fiscal 2024. We expect similar trends to support roughly 13% revenue growth next year. Higher pricing, improved labor management, and sales leverage will support EBITDA margin expansion of around 50 basis points over the next 12 months. S&P Global Ratings-adjusted EBITDA increased by about 25% for the first nine months of fiscal...

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