- Revenue: $612 million, up 1% year-over-year.
- Same-Store Sales Growth: 0.5%, marking the 14th consecutive quarter of positive growth.
- Net New Stores: 150 net new stores added.
- Adjusted EBITDA: $152.2 million.
- Diluted Adjusted EPS: $0.35.
- Take Five Oil Change Revenue Growth: 16% year-over-year.
- Take Five Oil Change EBITDA Growth: 22% year-over-year.
- Take Five Oil Change New Units: 68 new units year-to-date.
- Auto Glass Now Revenue: Blended approximately one-third retail, one-third commercial, and one-third insurance.
- US Car Wash Divestitures: $100 million year-to-date, with an additional $50 million expected in the second half of 2024.
- System-Wide Sales: $1.7 billion, up 0.6% year-over-year.
- Adjusted EBITDA Margin: 24.9%, up 77 basis points.
- Maintenance Segment System-Wide Sales: $535 million, up 10.5% year-over-year.
- Maintenance Segment Adjusted EBITDA: $102.9 million, up 21.4% year-over-year.
- Car Wash Segment Same-Store Sales: Declined 4.1%.
- Car Wash Segment Revenue: $156.9 million.
- Car Wash Segment Adjusted EBITDA: $33.8 million.
- PCG Segment System-Wide Sales: $862.2 million, down 3.4% year-over-year.
- PCG Segment Revenue: $112 million.
- PCG Segment Adjusted EBITDA: $35.2 million.
- Platform Services Segment Sales: $61.2 million, up 6.8% year-over-year.
- Platform Services Segment Adjusted EBITDA: $25.3 million, up 12.4% year-over-year.
- Net Income: $30.2 million.
- Adjusted Net Income: $58 million.
- Adjusted Diluted EPS: $0.35.
- Liquidity: $316 million.
- Net Leverage Ratio: 4.8 times, down from 4.9 times in Q1.
- Full Year Revenue Outlook: 2.35 to 2.45 billion.
- Full Year Adjusted EBITDA Outlook: Mid to upper end of 535 to 565 million.
- Full Year Adjusted Diluted EPS Outlook: Higher end of $0.8 to $1.
- Net Store Growth Outlook: 205 to 220 stores.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Driven Brands Holdings Inc (DRVN, Financial) reported revenue of $612 million for Q2 2024, up 1% from the previous year.
- The company achieved its 14th consecutive quarter of positive same-store sales growth, with a 0.5% increase.
- Take Five Oil Change, the company's largest and fastest-growing business, delivered a two-year comp of 23.5% and saw a 22% increase in EBITDA.
- The company successfully refinanced $258 million of WBS notes and increased liquidity with $400 million of variable funding notes.
- Driven Brands Holdings Inc (DRVN) has made significant progress in divesting U.S. car wash properties, generating $107 million in proceeds year-to-date, surpassing their initial target.
Negative Points
- The ongoing inflationary environment is expected to continue pressuring consumer spending, particularly affecting lower-income households.
- The U.S. car wash business experienced a 4.1% decline in same-store sales due to retail softness and inclement weather.
- The collision business faced a decrease in same-store sales, driven by lower industry claims and increased frequency of total losses.
- The company adjusted its full-year same-store sales growth outlook to 1%-3%, down from the previous 3%-5% range.
- Net income for Q2 2024 was $30.2 million, down from $37.7 million in Q2 2023.
Q & A Highlights
Q: Carwash is about 20-25% of EBITDA. How strategic is it for the overall portfolio and EBITDA growth going forward?
A: We are not deploying incremental growth capital into the carwash business. We are pleased with the stabilization efforts and are still evaluating the long-term sustainability of this asset within our portfolio. β Jonathan Fitzpatrick, CEO
Q: Can you elaborate on the pricing strategy for carwash subscriptions and its impact?
A: We have deployed the pricing strategy across the country, tripling our conversion rates and adding 200,000 new members year-to-date. This strategy is working as hoped and will be margin accretive as we grow membership revenue. β Danny Rivera, COO
Q: Can you provide more details on the recent insurance and rental car company contracts for the glass business?
A: We have signed six regional insurance agreements and contracts with two national rental car companies. There are over 3,000 regional insurance carriers, so this is just the beginning. We are optimistic about the future growth of this business. β Jonathan Fitzpatrick, CEO
Q: What are the headwinds in the PCG segment, and when can we expect a return to growth in EBITDA?
A: The softness is primarily in the U.S. collision business due to industry-wide claims being down and increased frequency of total losses. We expect these headwinds to dissipate in the back half of the year. β Danny Rivera, COO
Q: Can you discuss the cost pressures across your businesses and any potential alleviation?
A: The labor environment has settled compared to previous quarters, and we have good visibility on input costs. We do not expect major changes in cost pressures for the rest of the year. β Jonathan Fitzpatrick, CEO
Q: Can you elaborate on the guidance for the second half of the year?
A: We expect continued growth in maintenance and platform services segments, with moderate improvement in other segments. We reaffirm that 80% of our EBITDA growth will come in the second half of the year. β Joel Arnao, SVP of FP&A, Treasury and Investor Relations
Q: How should we think about the potential lift to the glass units from new insurance agreements?
A: We are building momentum with regional insurance and commercial agreements. While it will take time to see significant impact, we are pleased with the progress and expect continued growth. β Danny Rivera, COO
Q: What are the demand trends from commercial customers versus retail customers?
A: Approximately 50% of our system sales come from commercial partners, providing predictable revenue. We have not seen any changes in demand from commercial customers in 2024. β Jonathan Fitzpatrick, CEO
Q: Have any of your businesses experienced impacts from Hurricane Harold in Texas?
A: Yes, we had store closures for multiple days across various brands in the Houston and Texas area. We will provide more details in the next earnings call. β Danny Rivera, COO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
