Core Insights - Valvoline Instant Oil Change has achieved the 37th position in the Franchise Times Top 400, which ranks the largest U.S. franchise systems based on global systemwide sales from the previous year [1][2] Company Overview - Valvoline Inc. operates approximately 2,100 franchised and company-operated service centers across the U.S. and Canada, completing over 28 million services annually, including 15-minute stay-in-your-car oil changes and various preventive maintenance services [3] - The company franchises more than half of its Valvoline Instant Oil Change locations in the U.S., emphasizing quick and efficient service [2] Leadership and Growth - The recognition in the Franchise Times Top 400 is attributed to the strength and entrepreneurial spirit of Valvoline's franchisees, highlighting the company's commitment to supporting their growth [2] - Valvoline Inc. employs around 11,000 team members focused on expanding the core business and planning for future vehicle needs [3]

Group 1 - Valvoline Instant Oil Change (VIOC) locations in New England are participating in the "A Chance for Kids & Families®" program for the 12th consecutive year to raise funds for Dana-Farber Cancer Institute and the Jimmy Fund [1][2] - Customers can donate $1, $5, or $10 at participating VIOC locations from July 13 to August 2 to support cancer patients and their families [1] - Henley Enterprises, the largest franchisee of VIOC, has raised over $380,000 through this program to support critical research and patient care at Dana-Farber [2] Group 2 - Valvoline Inc. operates more than 2,000 service centers across the U.S. and Canada, completing over 28 million services annually [3] - The company employs 11,000 team members focused on growing the core business and expanding the retail network [3] - Henley Enterprises, founded in 1989, operates over 260 quick-lube service centers in 8 states [4] Group 3 - The Jimmy Fund, established in 1948, supports Dana-Farber Cancer Institute's mission for patient care and cancer research through community fundraising events [5] - The Jimmy Fund is an official charity of the Boston Red Sox and has received support from millions of people since its inception [5]

Financial Data and Key Metrics Changes - System wide sales increased by 11% to $826 million, with same store sales growth of 5.8% for the quarter [6][20] - Total net sales rose by 11% to $403 million when adjusted for refranchising impacts [6][20] - Adjusted EBITDA increased by 6% to $104 million, with an adjusted EBITDA margin of 25.9%, a decrease of 110 basis points year over year [6][23] Business Line Data and Key Metrics Changes - The system wide store count reached 2,078, an 8% increase year over year [6] - Approximately one third of same store sales growth came from transactions, with the remainder driven by ticket growth [31][32] - Non-oil change revenue continues to grow, contributing positively to overall sales [90][93] Market Data and Key Metrics Changes - The company has not observed significant changes in consumer behavior despite macroeconomic uncertainties, with continued demand for services [12][44] - The company maintains a market share of about 5% in the overall market for oil changes, indicating substantial growth potential [12] Company Strategy and Development Direction - The company is focused on network growth, with plans to add approximately 200 stores through the acquisition of Breeze Auto Care [16][111] - Strategic priorities include enhancing marketing capabilities and improving customer engagement through technology investments [13][14] - The company aims to leverage its strong brand and customer data to differentiate itself from competitors [12] Management's Comments on Operating Environment and Future Outlook - Management expects minimal impact from tariffs and is confident in navigating cost changes through various strategies [10][26] - The company reaffirms its guidance for same store sales growth in the range of 5% to 7% for the full year [53][118] - Management remains optimistic about the resilience of the business, citing strong fundamentals and demand drivers in the industry [12][44] Other Important Information - The company is transitioning to a new CFO, Kevin Willis, effective May 19 [6] - Share repurchases for Q2 totaled $21 million, with a year-to-date total of $60 million, paused in anticipation of the Breeze acquisition [25] Q&A Session Summary Question: Can you break out the 5.8% same store sales between ticket and car count? - Transactions drove about a third of the overall comp, with two thirds driven by ticket growth, impacted by weekday mix and Easter shifts [31][32] Question: Is there a plan to take cost actions regarding SG&A? - Management expects SG&A growth to moderate and leverage to improve as refranchising impacts lessen [34][36] Question: Can you provide perspective on the cadence of comps throughout the quarter? - February was weaker due to challenging weather, but January and March showed consistent performance [42] Question: Are you seeing any impact from base oil deflation? - Modest deleverage in product costs was noted, with expectations for potential benefits from declining crude prices in the future [45][84] Question: What is the current penetration rate for non-oil change services? - The penetration rate for non-oil change services has been growing, with significant contributions from visual elements like wipers and filters [90][92] Question: How do lower oil prices impact gross margins? - Lower oil prices generally lead to delayed adjustments in lubricant pricing, with potential tailwinds expected if crude prices remain low [82][84]