Valvoline Inc.

I'll now hand you over to Elizabeth Russell with Valvoline to begin. Please go ahead.

Thanks. Good morning, and welcome to Valvoline's third quarter fiscal 2024 conference call and webcast. This morning, Valvoline released results for the third quarter ended June 30, 2024. This presentation should be viewed in conjunction with that earnings release, a copy of which is available on our investor relations website at investors.valvoline.com. Please note that these results are preliminary until we file our Form 10-Q with the Securities and Exchange Commission. On this morning's call is Laurie Sleeve, our CEO and President, and Mary Michaelsberger, our CFO. As shown on slide two, any of our remarks today that are not statements of historical facts are forward-looking statements. These forward-looking statements are based on current assumptions as of the date of this presentation and are subject to certain risks and uncertainties that may cause actual results to differ materially from such statements. Family assumes no obligation to update any forward-looking statements unless required by law. In this presentation and in our remarks, we will be discussing our results on an adjusted non-GAAP basis, unless otherwise noted. Non-GAAP results are adjusted for key items, which are unusual, non-operational, or restructuring in nature. We believe this approach enhances the understanding of our ongoing business. A reconciliation of our adjusted non-GAAP results to amounts reported under GAAP and a discussion of management's use of non-GAAP and key business measures is included in the presentation appendix. The information provided is used by our management and may not be comparable to similar measures used by other companies. As a reminder, the retail services business represents the company's continuing operations. and the former global product segment is classified as discontinued operations for the purposes of GAAP reporting. Today, Lori will begin with a look at the key highlights from our third quarter, and Mary will then cover our financial results. With that, I will turn it over to Lori.

Thanks, Elizabeth, and good morning, everyone. Thank you for joining us today. For the third quarter of fiscal 2024, we saw growth at the top line across the network. with system-wide store sales growing 12.4% to $809 million, with our growth rates from both company and franchise being consistent with the first half of the year. As we expected, we saw transactions grow each month throughout the quarter as we moved into the summer drive season. Our same store sales growth for the quarter was 6.5%. We did see growth moderate in our customer base for the same stores in Q3 as we lapped strong growth in the prior year quarter, and we saw increasing competitive advertising spend in the current year quarter. The fundamentals of our business are strong, and demand for preventative maintenance has historically been resilient. From a customer behavior perspective, while we continue to not see trade downs or deferrals, We are seeing very slight differences in discounting and manual change service penetration for our stores and areas with lower income demographics. Moving to our profit performance, adjusted EBITDA improved almost 12% to $123 million, despite the strong comparison in the prior year. Operating income increased 8% to $93 million. We added 33 new stores to the network this quarter, with 15 coming from franchise. This brings our year-to-date net additions to 109, which includes 48 net new franchise stores. Following the close of the quarter, we also announced a $400 million share repurchase authorization, consistent with the commitment for share repurchases to be part of our ongoing capital allocation framework. Before Mary covers the details of the quarterly results, I'd like to share some additional insights on how these results fit into our strategy. Our first strategic pillar is to drive the full potential of the existing business. We do this by driving traffic to the stores, both returning and new customers, by executing our super pro process to deliver a great customer experience, and by managing costs. We continue to focus our advertising investment to drive traffic to our stores and believe our data driven approach will help us get the right message to the right customer at the right time in the most cost effective manner. During this quarter, we saw benefits from the work our team has been doing to drive more organic search traffic to our website, which is a more cost efficient acquisition channel. We also renegotiated one of our marketing contracts. These types of actions help ensure our return on ad spend is optimized in this more competitive environment. Once customers are in our stores, we want to provide a comprehensive service offering. A key component of that is our non-oil change service menu. This quarter, non-oil change service penetration was again the largest contributor to same store sales growth across the system. The team continues to focus on how we educate our guests on the additional services recommended for their vehicles. We saw growth across the menu of services we offer. We continue to believe that the retention of the teams in our stores and their increasing tenure is what enables this improvement. Managing cost is always an important part of the success of our core business. We shared in Q2 that management of labor costs had exceeded our expectations. This quarter, the teams continued to manage labor costs well and delivered labor as a percentage of sales consistent with the prior year. Now I'd like to touch on our second strategic pillar, accelerating network growth. We're really pleased with the 33 store additions this quarter. It brings our total network to 1,961 stores, representing an 8.7% growth over the prior year. Following the end of the quarter, we closed a transaction to re-franchise 17 stores in the Las Vegas market. We've talked for some time that we would consider re-franchising. And although this deal is relatively small, it is a capital efficient way to help field growth with one of our longstanding franchise partners. Also following the end of the quarter, we closed on a transaction to purchase five stores in Texas from a retiring franchise partner. In this instance, the stores are part of a company operated geography and acquiring these stores will help us build regional scale and have more efficient SG&A spend in the region. Our third strategic pillar is customer and service expansion. Our fleet business is an important component of this strategy, and we continue to see positive momentum with sales still growing at a higher rate than the company-wide growth. The growth is driven by both ticket and transaction from the addition of new fleet customers and increased volume within existing fleet accounts. We see a long runway for growth for this part of our business. Now I'll turn it over to Mary to walk us through our third quarter financial results.