Valvoline expanded its system-wide store count 15.6% year-over-year to 2,456 locations during fiscal Q3 2026 while quarterly system-wide store sales surpassed $1 billion, pairing rapid unit development with 8% same-store sales growth across its preventive automotive maintenance network.
System-wide store sales increased 18.5% to approximately $1.054 billion from $889.6 million a year earlier. Company-operated stores generated $481 million of sales, while franchised locations generated $572.9 million.
Valvoline ended the quarter with 1,232 company-operated stores and 1,224 franchised stores. That compared with 983 company-operated and 1,141 franchised locations at the end of the year-earlier quarter.
The company added a net 47 stores during Q3 alone, consisting of a 22-location increase in company-operated stores and a 25-location increase in franchised locations.
Underlying development activity included 15 newly opened company-operated stores and five acquisitions during Q3, offset by one closure. Franchisees opened 26 stores and closed one location. Conversions between company-operated and franchised stores changed the ownership mix but did not alter Valvoline’s overall system count.
The growing physical footprint was accompanied by stronger performance from established stores. System-wide same-store sales increased 8% compared with 4.9% a year earlier, with management citing pricing actions as one contributor.
Reported net revenue increased 24% to $544.6 million. Operating income rose 18% to $112.2 million, income from continuing operations increased 14% to $65 million and diluted EPS rose 16% to $0.51.
Adjusted profitability increased at a faster pace. Adjusted EBITDA rose 25% to $162.4 million, while adjusted EPS increased 21% to $0.57.
Valvoline also generated substantially more cash. Year-to-date operating cash flow from continuing operations reached approximately $285 million, while free cash flow totaled $112 million, an improvement of $93 million from the prior-year period.
The balance sheet reflects the investment required to expand the network. Valvoline ended June with approximately $84 million of cash and $1.6 billion of total debt after making a $50 million voluntary prepayment on its Term Loan A.
Valvoline has maintained its fiscal 2026 target of 330 to 360 system-wide store additions, indicating that unit development remains central to its growth strategy.
Management also increased its outlook for the productivity of the existing network. Full-year system-wide same-store sales growth is now expected at 7.5%-8%, up substantially from the previous 5%-6.5% range.
Net revenue guidance increased to $2.05 billion-$2.10 billion from $2.0 billion-$2.10 billion. Adjusted EBITDA is now expected at $550 million-$560 million, compared with the previous $540 million-$560 million range, while adjusted EPS guidance increased to $1.70-$1.75 from $1.65-$1.75.
The combination of 15.6% system growth and 8% same-store sales expansion gives Valvoline two separate drivers for system-wide sales: adding more locations and producing more revenue from established stores.
KEY QUOTES:
“We delivered another strong quarter, with sales and profit growth in line with our expectations. Top-line sales grew 24%, with system-wide same-store sales growth of 8.0%, benefiting from pricing actions taken in the quarter. We generated healthy profit growth, solid margins and improved SG&A leverage. The team continues to manage the business effectively through the changing supply and macro environment. Our results demonstrate the strength, resilience, and growth in our business.”
“We are operating in a period of meaningful change on the cost side of our business. Our team is focused on mitigating the impact of increased finished lubricant costs with pricing actions and ongoing operational discipline. We remain confident in the underlying strength of our business and our team’s execution. As a result, we are narrowing our guidance ranges and raising full-year system-wide same-store sales expectations.”
Lori Flees, President and CEO of Valvoline
