Valvoline Inc.

Hello, everyone, and welcome to the Valvoline's first quarter.

This presentation should be viewed in conjunction with that earnings release, a copy of which is available on our investor relations website at investors.vavling.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 Lori Slee, our President and CEO, and Kevin Willis, our CFO. As shown in the accompanying presentation, any of our remarks today that are not statements of historical fact 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. VALLEE 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. 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 appendix. With that, I will turn it over to Lori.

Thanks, Elizabeth, and good morning. Thank you all for joining us today to review our first quarter results. We delivered a strong quarter to start the fiscal year. driven by strong productivity gains in our stores, network expansion, and margin improvement, which translated to meaningful earnings growth. I'd like to begin by thanking our team members and franchise partners for their execution in delivering these results. At our December investor update, we shared our targets and our focus on executing against those. Our first quarter performance reflects good progress against these commitments. Starting with top line highlights, we saw another double-digit increase to both system-wide store sales and net sales. System-wide same store sales grew 5.8% and 13.8% on a two-year stack. This quarter, Ticket contributed the majority of the comp with all three levers contributing. Net price and premiumization were the largest drivers. We also saw continued positive transaction growth despite a tougher year-over-year compare. As we look at same-store sales breakdown between company and franchise stores, franchise was slightly higher than the system average for the quarter and for the two-year stack. We continue to grow our active customer base in line with what we expected while bringing in new customers, including fleet, to the network. We continue to innovate our marketing to connect with new customers. We had some fun taking inspiration from college sports with our instant transfer portal, which was designed to invite drivers to transfer from their current oil change provider to Valeline. Customer demand for our non-discretionary services remains resilient, and we are not seeing signs of trade down or deferral. And our customers continue to tell us they are delighted by our quick, easy, trusted service. and are giving us a 4.7 star rating across our network and NPS scores over 80%. Looking at network growth, we saw significant store additions this quarter. The one-time contribution of 162 stores from the Breeze transaction is a noteworthy step forward in our path to a 3,500 plus store network. The Breeze business is performing as expected and integration activities are underway. Our teams are working well together as we integrate the organization. For example, the team has already consolidated and prioritized our acquisition and construction pipelines. We continue to be excited about both the growth potential of the Breeze stores, as well as the opportunities to share best practices across the team. Outside of Breeze, we added 38 net new stores with 10 coming from franchise. While franchise openings were more modest in Q1, We have a healthy pipeline for both company and franchise and are confident in our full year expectations. We're pleased to see expansion in both our growth and adjusted EBITDA margins driven by the work we discussed at our December investor update. Kevin will cover the details, but as we think about the rest of the year, I'll remind you that freeze is only reflected in our Q1 results for one month, and we still expect near-term headwinds on our margin rates with the addition of 162 immature stores. Driving productivity within our stores, growing our network, and expanding margin rates translate into meaningful profit growth. And in Q1, both adjusted EBITDA and EPS grew double digits year over year for the quarter and grew faster than top line sales. The first quarter demonstrated the strength of our business. and the continued resiliency of customer demand. We executed our playbook to deliver meaningful profit goals to start the year. As we look to the remainder of the year, we feel it's too early to make changes to our guidance, but we are pleased with our Q1 performance. While not directly in our financial results, I want to share a couple of team highlights. First, Valvoline earned the number one ranking within the automotive services category for Entrepreneur Franchise 500 for the fourth year in a row. And we were also named one of Yelp's most loved brands. These recognitions highlight the strength of our franchise model and the strong customer trust and loyalty built across our network. And second, I want to thank our customers, franchisees, and teams for an incredible 16th annual campaign with Children's Miracle Network. Through funds donated by guests at the time of service, corporate-led fundraising efforts, and contributions from franchisees, we raised more than $1.8 million for local children's hospitals in the communities where we operate, a nearly 40% increase over the prior year. With that, I'll turn the call over to Kevin to provide more detail on our financial performance.