Valvoline Inc.

change your mind, please press star followed by two. I will now hand over to your host, Elizabeth Covinger with Investor Relations team to begin. Please go ahead.

Elizabeth Covinger Thank you. Good morning and welcome to Babbling's third quarter fiscal 2025 conference call and webcast. This morning, Babbling released results for the third quarter ended June 30th, 2025. This presentation should be viewed in conjunction with that earnings release, a copy of which is available on our Investor Relations website. 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 Lori Fleece, our President and CEO, and Kevin Willis, 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 GAAP to adjusted non-GAAP results and a discussion of management's use of non-GAAP and key business measures is included in the presentation attendance. The information provided is used by our management and may not be comparable to similar measures used by other companies. With that, I will turn it over to Lori.

Thanks, Elizabeth, and thank you for joining us today. I'd like to start with a quick look at our third quarter highlights on slide three. We are pleased to have delivered strong sales, profit, and store growth for the third quarter. System-wide sales increased 10% to $890 million, and adjusted EBITDA increased 12%, considering the impacts of re-franchising. We delivered good same-store sales comps of 4.9%, including an 80 basis point impact for Easter, and we added 46 new stores in the quarter. As we continue to drive the full potential of the core business, we benefit from the resiliency of our customer demand. We continue to see no evidence of customers trading down or delaying services. In fact, the percentage of customers using our premium products grew both sequentially and year-over-year across the network. We were pleased to see continued transaction growth for our same store base. We also saw transaction growth in our insurer store base for the quarter. Our ticket growth was benefited by premiumization, net pricing, and improvements in that OCR service penetration. While we had a good comp result of 4.9%, We believe June, while positive, was impacted by a slower than normal start to the summer holidays. We remain confident in our same store sales expectations for the full year and are narrowing our guidance range to 5.8 to 6.4%. Our team continues to manage our cost of sales to deliver long term margin expansion and enhance shareholder value. Labor improvements drove the gross margin rate expansion this quarter through better labor management, especially from enhanced scheduling practices. In Q2, we discussed the expected impact of tariffs in detail. While there continues to be uncertainty in the global trade discussions, our expectations of any impact to our financials are minimal and unchanged. As it relates to network growth, this quarter we added 46 new stores, bringing our year-to-date total for growth store additions to 116. 114 met of the two closures in Q2. During Q3, we had a transfer of six stores from franchise to company ownership. This transfer was driven by strategic considerations to align markets and enable our franchise partners to concentrate their development efforts in markets where they are best positioned for growth. The strong delivery of stores this quarter, along with the stores already in construction and in the acquisition pipeline, gives us confidence in meeting our store addition targets for the year. We continue to track to the midpoint of the range while recognizing, consistent with what we shared last quarter, that our pipeline is more back-end loaded this fiscal year. We're pleased with the continued momentum of new store pipeline growth, including our recently re-franchised markets. The progress of both our company and franchisee development teams reinforce our confidence in delivering our network growth targets and improving return on invested capital. I'd also like to give an update on the Breeze transaction. We continue to work diligently with the FTC on a path to close this transaction. This path to close could include a plan to divest certain stores subject to FTC approval, but we're still too early in the process to know the specifics, and there is uncertainty around the timing. We hope to close in late Q4 or early fiscal 2026, and we'll provide more information as soon as we're able. Before handing it over to Kevin to review our financial results, I want to officially welcome him to his first Valvoline earnings call. As expected, he's quickly getting up to speed on how Valvoline's business looks today, and I appreciate the strong financial expertise he brings to the team. With that, I'll turn it over to Kevin.