Core Insights - New car prices are at an all-time high, with average monthly payments reaching $766 and average amounts financed at $43,218, driving consumers towards the used car market [1][2] - Companies like Carvana, Autoation, and CarMax are benefiting from this trend, with stock prices increasing significantly [2] - Valvalene, which operates 2,300 car servicing stores, is positioned to capitalize on the growing demand for maintenance services as consumers hold onto their older vehicles longer [2][3] Company Performance - Valvalene's CEO noted that the average age of vehicles in the U.S. has increased to nearly 13 years, leading to higher maintenance needs and revenue opportunities for the company [4] - The company has been experiencing a steady influx of customers seeking maintenance for their older vehicles, which aligns with the trend of consumers opting for used cars over new ones [3][4] - Valvalene's growth in the electric vehicle (EV) segment has slowed since the removal of EV subsidies, with EV penetration in the car park currently below 2% [6][7] Market Dynamics - The shift towards maintaining older vehicles rather than purchasing new ones is expected to continue, as consumers find it more economical to keep their current cars [5] - Valvalene's hybrid business is performing well, with penetration rates comparable to traditional internal combustion engine vehicles [8] - The company aims to improve its market perception and investor understanding following a significant acquisition and a focus on clear financial commitments for growth [12][10] Community Engagement - Valvalene has a strong commitment to community involvement, having raised over $1.8 million for the Children's Miracle Network and engaging in various charitable activities [15][16]

Group 1 - Valvoline Instant Oil Change is launching a School Supply Drive from July 14th to August 3rd to support students in Southwest Florida as they prepare for the new school year [1][2] - Customers who donate new school supplies will receive a 20% discount on their total purchase, with all donations benefiting local students and teachers in Charlotte, Collier, and Lee counties [2] - The company operates over 2,000 service centers across the U.S. and Canada, completing more than 28 million services annually, including oil changes and maintenance services [4] Group 2 - Henley Enterprises, Inc. is the largest franchisee of Valvoline Instant Oil Change, operating more than 260 service centers across eight states [5]

Core Points - Valvoline Inc. announced the winners of its 31st annual Oilympics competition, showcasing the fastest teams in providing a perfect service experience [1][2] - The competition included 40 regional teams from the U.S. and Canada, representing the top 1% of Valvoline service center technicians [2][3] - The tradition of Oilympics began in 1994 and has expanded to include over 2,000 Valvoline service centers across North America [3][4] Company Overview - Valvoline Inc. operates more than 2,000 franchised and company-operated service centers in the U.S. and Canada, completing over 28 million services annually [4] - Services range from 15-minute oil changes to various manufacturer-recommended maintenance services [4] - The company employs approximately 11,000 team members focused on business growth, retail network expansion, and future vehicle planning [4]

Financial Data and Key Metrics Changes - Comparable store sales percentage change improved by 500 basis points sequentially from Q2 of fiscal 2025, with sales of $305.8 million, a decrease of 3.7% year over year, primarily driven by a 1.9% decline in comparable store sales unadjusted for days [13][15] - Gross margin decreased by 120 basis points compared to the prior year, primarily due to higher material costs and increased self-funded promotions [15][16] - Operating income for Q3 declined to $10 million or 3.3% of sales, compared to $21.4 million or 6.7% of sales in the prior year [16] - Net income was $4.6 million, down from $12.2 million in the same period last year, with diluted earnings per share at $0.15 compared to $0.38 [17] Business Line Data and Key Metrics Changes - Tire units were up low single digits in Q3, driven by mid single-digit growth in units during December [14] - Year-over-year growth in service categories, including batteries, alignment, and front-end shocks, was noted, while brake category performance still requires improvement [9][12] Market Data and Key Metrics Changes - Preliminary fiscal January comparable store sales were down 1%, driven by weakness in tire category sales due to extreme weather, which resulted in temporary store closures [10][11] - The company gained higher market share in higher margin tiers during the quarter [14] Company Strategy and Development Direction - The company remains focused on sales and unit growth while making necessary price and promotional investments, even if it pressures profitability in the near term [10][12] - Initiatives such as the Comfort Drive digital courtesy inspection process and oil change offers are expected to drive improvements in store traffic and service category performance [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in restoring gross margins back to pre-COVID levels with double-digit operating margins over the long term as top-line growth resumes [12][21] - The company anticipates leveraging initiatives to achieve Q4 objectives, including improving store traffic trends and accelerating performance in key service categories [11][20] Other Important Information - The company generated $103 million of cash from operations, with a net bank debt of $49 million and total liquidity of $521 million [18][19] - Capital expenditures are expected to be between $25 million to $30 million for fiscal 2025 [20] Q&A Session Summary Question: Will gross profit comps continue to improve or will there be a mix deterioration? - Management indicated that gross margin declined 120 basis points due to material costs and self-funded promotions, and similar pressure is expected going forward [24] Question: Was weather a net benefit or drag in Q3? - Management stated that Q3 was neutral regarding weather impact, but extreme weather in January is expected to benefit future performance [25][26] Question: What benefits are seen from the digital courtesy inspection? - Management noted that while traffic was down, average ticket size increased, driven by service categories, indicating strong attachment rates [32][34] Question: What is the current mix of Tier 3 tires? - The mix is in the high 20s, with a focus on steering customers towards Tier 3 rather than Tier 4 [44][47] Question: What is the status of ATD receivables? - The company still has $6.8 million of receivables owed from ATD, with no reserves against that amount, expecting full collection [56] Question: How did regional performance vary? - The South performed stronger than the consolidated comp, while the Midwest, Northeast, and West were weaker [57] Question: What are the building blocks to restore gross margins to pre-COVID levels? - Management highlighted the need for reduced material cost pressures and top-line growth to achieve margin restoration [71]