Valvoline Inc Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Justin Kleber - Robert W. Baird & Co. Incorporated - Analyst : Hey, good morning, everyone. Thank you for taking the questions. Just a few on the outlook. I was hoping you could maybe frame the revenue and EBITDA contribution from Breeze, just so we can understand the core Valvoline business is expected to perform. And then a follow-up related to the guidance. Just what's driving the decline in EBITDA margins in fiscal '26? It looks like about 100 basis points. How much of that is kind of core Valvoline versus simply including the Breeze business in your consolidated results?

Question: Justin Kleber - Robert W. Baird & Co. Incorporated - Analyst : Okay. Thanks for that, Kevin. And then just as it relates to the acquisition, I'm not sure how much you could share given you haven't closed the deal yet. But it looks like the divested locations, right, if we compare the net purchase price relative to what was discussed back in February, it seems like you're divesting those locations for less than $1 million a box and you're acquiring the remaining stores at close to $4 million a box? So can you just help us reconcile those two numbers and maybe why the divested locations look like you're selling them at such a lower price relative to what you're buying the remaining outlets for? Thank you.

Question: Justin Kleber - Robert W. Baird & Co. Incorporated - Analyst : Okay. Thanks for all that color, and I look forward to seeing everyone next month.

Question: Simeon Gutman - Morgan Stanley & Co Ltd - Analyst : Hi, Lori. My question is, we have, I guess, a slightly lower outlook or algo than what we used to do. And frankly, I think the market has been hoping to have something that's like a little bit more conservative. So we are getting together, it sounds like, in a few weeks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2025 / 2:00PM, VVV.N - Q4 2025 Valvoline Inc Earnings Call So can you talk about expectations for the core business? It sounds like nothing is changing; I want to confirm. But how do you think about the core business? Is the algo change reflective of anything structural or tactical? Or it is just being prudent in setting up a reasonable range for the business to grow off of? Thanks.

Question: Simeon Gutman - Morgan Stanley & Co Ltd - Analyst : And then a follow-up. Can we talk about the, I guess, the number of stores in the market and expansion by you and others? It looks like capacity or number of oil changes is increasing steadily. Curious how you look at that, how your own cannibalization rates look, and if there are any markets that you are not going to enter or you have thinking twice because a competitor is already well positioned there?

Question: Simeon Gutman - Morgan Stanley & Co Ltd - Analyst : Thank you. Good luck.

Question: Steven Zaccone - Citibank Cameroon SA (Douala Branch) - Analyst : Great. Good morning. Thanks very much for taking my question. Can you help us think through the margin outlook for '26 with the new 4% to 6% same-store sales guidance? There was some prior commentary that you were hopeful to see SG&A leverage at some point in '26. So how does that stack up with the new guidance?

Question: Steven Zaccone - Citibank Cameroon SA (Douala Branch) - Analyst : Okay. That's helpful. Thank you. The follow-up I had is just on the same-store sales guidance. Last year, you faced a difficult compare in the first quarter. So if we think about the quarterly cadence of comps, is there anything to be mindful of below or above that guidance range as we go each quarter?

Question: Steven Zaccone - Citibank Cameroon SA (Douala Branch) - Analyst : Okay. Thanks very much. Best of luck.

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Thank you very much for taking my questions, and I'm looking forward to the investor update. For the same-store sales guidance, I wanted to dig to a little bit. But how do you build to that 4% to 6%? What's the mix like between traffic and ticket? Is it more ticket heavy? And how should we think about the mix of franchise versus company operated?

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Okay. Perfect. And then just one quick follow-up, I guess, kind of on your current trends, health of the consumer, you're seeing. We've heard a little bit about concerns around deferral and non-oil change services or just an extension oil change intervals. Is there anything you're seeing there in your current business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2025 / 2:00PM, VVV.N - Q4 2025 Valvoline Inc Earnings Call

Question: Mark Jordan - Goldman Sachs Group Inc - Analyst : Perfect. Thank you very much.

Question: Peter Keith - Piper Jaffray Inc - Analyst : Thanks. Good morning, and congratulations on getting the Breeze acquisition done. Just on a separate topic, I wanted to dig into a little bit on the higher product cost impact. It looked pretty impactful at around 120-basis-point drag for the quarter. Could you give a little more detail on what this was and if we're going to see this headwind continue or if there's any potential offsets as we step into the new fiscal year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2025 / 2:00PM, VVV.N - Q4 2025 Valvoline Inc Earnings Call

Question: Peter Keith - Piper Jaffray Inc - Analyst : Okay. All right. That's helpful. And then I guess, a simplistic question on optics. So the comp was quite good for the quarter, EBITDA at the high end, and then the EPS at the low end. So I guess, optics do matter. You did miss the EPS consensus estimates a bit. To me, it looks like you had a $0.02 headwind from higher interest expense. Maybe you can comment if -- why did interest expense jump up so much? And if there's anything in your model that maybe caused the drag on EPS?

Question: Peter Keith - Piper Jaffray Inc - Analyst : Okay. That's helpful. Thank you. Good luck with the new fiscal year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2025 / 2:00PM, VVV.N - Q4 2025 Valvoline Inc Earnings Call