Valvoline Reports $403.2 Million Revenue, Plans $625 Million Acquisition of Breeze Autocare

Valvoline Inc. reported a net revenue of $403.2 million for the three months ended March 31, 2025, marking a 3.7% increase from $388.7 million in the same period last year. For the six months ending March 31, 2025, revenues reached $817.5 million, up 7.3% from $762.1 million in the prior year. The company's gross profit also saw a modest increase, rising to $150.5 million for the quarter, compared to $146.2 million a year earlier, while operating income decreased to $66.9 million from $76.4 million. The decline in operating income was attributed to increased selling, general, and administrative expenses, which rose to $86.3 million from $72.3 million in the previous year.

Valvoline's financial performance reflects significant changes compared to the previous fiscal period, particularly in its operating expenses and income. The company reported a 12% decrease in income from continuing operations, which fell to $38.3 million from $43.3 million year-over-year. Diluted earnings per share also decreased to $0.30 from $0.33. The decline in profitability was primarily driven by higher investments in operational growth and the impact of refranchising transactions, which offset the benefits from gross profit expansion.

Strategically, Valvoline announced plans to acquire Breeze Autocare for approximately $625 million, a move aimed at expanding its footprint in the automotive maintenance sector. This acquisition is expected to be funded through a Term Loan B, and the company is currently working to secure regulatory approval. The acquisition of Breeze Autocare, which operates nearly 200 stores across 17 states, is part of Valvoline's strategy to enhance its service offerings and market presence.

Operationally, Valvoline reported a system-wide same-store sales growth of 5.8% for the quarter, driven by increased average ticket prices and a growing customer base. The company also added 150 net new stores over the past year, bringing the total to approximately 2,100 service center locations. However, the refranchising transactions negatively impacted net revenues, highlighting the challenges associated with transitioning company-operated stores to franchise operations. The company’s employee headcount remained stable, with no significant changes reported.

Looking ahead, Valvoline anticipates continued growth driven by its strategic initiatives, including the expansion of its retail footprint and enhancements in service offerings. The company expects to incur additional selling, general, and administrative expenses related to the Breeze Autocare acquisition in the second half of fiscal 2025. Despite the challenges faced in the current fiscal period, Valvoline remains focused on leveraging its core business strengths to create shareholder value and drive long-term growth.