Valvoline Inc (NYSE:VVV) revealed its financial results for the fourth quarter and full fiscal year 2023 on Thursday, showcasing a substantial increase in sales, income, earnings per share (EPS), and store expansion. The company also announced its ambitious plans for fiscal 2024.
Valvoline reported its Q4 non-GAAP EPS of $0.39, falling short by $0.02, and revenue of $390 million, marking a year-over-year increase of 16.3% and beating projections by $1.19 million. The company's adjusted EBITDA rose by 25% to $109 million during this period. In Q4, Valvoline expanded its retail presence by adding 48 stores, comprising 26 franchised and 22 company-operated locations.
For the full fiscal year 2023, the company reported a 17% surge in sales from continuing operations to $1.4 billion and marked its 17th consecutive year of same-store sales (SSS) growth with an increase of 11.9%. Income from continuing operations soared by 82% to $199 million, while EPS saw a significant boost of 102% to reach $1.23. Valvoline's adjusted EBITDA from continuing operations grew by 20% to $380 million, and adjusted EPS rose by 62% to $1.18.
The firm's system-wide store sales reached nearly $2.8 billion in FY 2023 as it added a total of 137 stores throughout the year, bringing the total count to 1,852 stores. The company maintained a robust balance sheet with $757 million in cash and equivalents and total debt standing at $1.6 billion. It generated an operating cash flow of $353 million and a free cash flow of $173 million.
In a move indicating confidence in its growth trajectory, Valvoline returned $1.5 billion to shareholders through share repurchases during the fiscal year, with an additional authorization of $212 million at year-end.
Looking ahead to fiscal 2024, CEO Lori Flees projected top-line sales of $1.6 - $1.7 billion, exceeding the consensus forecast of $1.44 billion. The company also expects an adjusted EBITDA of $420 - $460 million and plans to add 140-170 new stores, including 55-70 franchisees. Flees also predicted a same-store sales growth of 6-9% for the upcoming fiscal year.
InvestingPro Insights
To further enrich the article, we have some key insights from InvestingPro. Valvoline Inc's revenue growth has been accelerating, which aligns with the strong sales figures reported in their fiscal year 2023 results. This growth trend is one of the InvestingPro Tips that investors should keep an eye on.
Additionally, Valvoline operates with a high return on assets, another InvestingPro Tip, which is reflected in their robust balance sheet and the successful expansion of their retail presence.
InvestingPro data also shows that the company has a moderate level of debt, which is consistent with the reported total debt of $1.6 billion. This financial stability is a positive sign for potential investors.
These are just a few of the many insights available through InvestingPro. For a comprehensive understanding of Valvoline's performance and future prospects, consider the additional tips provided by InvestingPro.
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