Valvoline's (VVV) Q4 Earnings and Revenues Miss Estimates
Valvoline Inc. VVV reported adjusted income from continuing operations of $53.6 million or 39 cents per share in fourth-quarter fiscal 2023 (ended Sep 30, 2023) compared with the year-ago quarter's earnings of $37.7 million or 21 cents. Earnings per share (EPS) missed the Zacks Consensus Estimate of 41 cents.
Revenues
Net sales increased nearly 16.3% year over year to $390 million in the quarter. The metric lagged the Zacks Consensus Estimate of $391.5 million.
In the fourth quarter, system-wide same-store sales (SSS) increased by 10%. In the fiscal 2023, the metric grew by 12%.
Valvoline Price, Consensus and EPS Surprise
Valvoline price-consensus-eps-surprise-chart | Valvoline Quote
FY23 Results
Net sales amounted to $1,443.5 million in fiscal 2023, up 17% year over year.
The company reported adjusted earnings from continuing operations of $1.18 per share in fiscal 2023 compared with 73 cents a year ago.
Financials
At the end of the quarter, Valvoline had cash and cash equivalents of $409.1 million, up from $23.4 million a year ago. Long-term debt was $1,562.3 million, up 2.4% year over year.
Net cash provided by operating activities from continuing operations was $353 million and free cash flow was $173 million in fiscal 2023.
In fiscal 2023, $1.5 billion was returned to shareholders through share repurchases, leaving $212 million available on the existing share repurchase authorization at the end of the year.
Outlook
In fiscal 2024, the company foresees achieving top-line sales of $1.6-$1.7 billion, with adjusted EBITDA expected to be between $420 million and $460 million. It anticipates a 6-9% growth in SSS. Valvoline plans to expand its store network by adding 140-170 new stores, with 55-70 coming from franchisees.
Valvoline expects adjusted EPS to be $1.40-$1.65 for fiscal 2024. Also, the company foresees capital expenditures of $185-$215 million for the fiscal.
Price Performance
Valvoline’s shares have gained 2.5% in the past year compared with a 5% rise of the industry.
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Zacks Rank & Key Picks
Valvoline currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, sporting a Zacks Rank #1 (Strong Buy), and The Andersons Inc. ANDE and Linde plc LIN, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.57, indicating year-over-year growth of 213.2%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have surged 68.8% in the past year.
The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised 8.6% upward in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8% on average. ANDE’s shares have rallied around 38.2% in a year.
The consensus estimate for Linde’s current fiscal year earnings is pegged at $14.11, indicating year-over-year growth of 14.8%. LIN beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 5.7%. The company’s shares have increased 21.4% in the past year.
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