Driven Brands (US:DRVN)2021-07-28 17:47Financial Data and Key Metrics Changes - Driven Brands reported consolidated same-store sales growth of 39% compared to Q2 2020, with a two-year growth of 19% [7][36] - Revenue more than doubled to $375 million, and adjusted EBITDA also more than doubled to $101 million, with adjusted EPS at $0.25, exceeding expectations [8][34] - System-wide sales reached $1.2 billion in the quarter, driven by strong same-store sales growth and new store additions [33] Business Line Data and Key Metrics Changes - The maintenance segment posted same-store sales growth of 42%, the strongest across the portfolio, with a two-year growth of 27% [41] - The car wash segment achieved same-store sales growth of 35%, with a two-year growth of 21% [43] - The Paint, Collision & Glass segment reported same-store sales growth of 37%, with a two-year increase of 11% [45] - The platform services segment saw same-store sales growth of 37%, with a two-year growth of 34% [47] Market Data and Key Metrics Changes - The company added 17 net new units in Q2, with a strong pipeline of over 950 units for future growth [18][19] - The company expects to open between 160 and 190 new stores in 2021, reaffirming its store opening guidance [21][52] - Active customers reached an all-time high, indicating strong demand for services [16] Company Strategy and Development Direction - Driven Brands aims to leverage its scale and competitive advantages to continue gaining market share in a fragmented industry [5][30] - The company is focused on organic growth through new store openings and same-store sales growth, while also pursuing tuck-in acquisitions [22][25] - The company is testing rebranding some car wash locations to unify branding, which may enhance marketing synergies [69][100] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about achieving updated guidance for adjusted EBITDA of $345 million for 2021, citing strong operational performance [29][51] - The company anticipates that vehicle miles traveled (VMT) will trend towards pre-COVID levels by mid to late 2022 [28] - Management acknowledges ongoing labor challenges but believes operational efficiency will mitigate impacts on performance [92] Other Important Information - The company ended Q2 with $147 million in cash and a total liquidity of $468 million, providing a strong financial position for future growth [48] - Adjusted EBITDA margin was nearly 27%, with company store four-wall margins at 40% [34][26] Q&A Session Summary Question: Can you provide insights on the cadence of sales and EBITDA for the back half of the year? - Management indicated that monthly comps in Q2 were strong, with expectations for positive comps across all segments in the back half of the year [56][58] Question: Are acquisitions included in the updated guidance? - The guidance includes acquisitions made to date but does not account for future potential acquisitions [62] Question: Is there seasonality in Wash Club penetration? - Management noted that while there is natural seasonality, the focus is on operational execution and improving customer engagement [66][68] Question: Are there any impacts from COVID spikes on recovery? - Management stated that they are not seeing detrimental moves in traffic or demand in areas with COVID spikes [75] Question: How significant was being in stock compared to competitors? - Management emphasized proactive inventory management, which has allowed them to maintain market share despite supply chain challenges [79] Question: What is the strategy behind rebranding car wash locations? - The company is testing rebranding to unify branding, which is expected to enhance marketing synergies over time [99][100]