Valvoline (VVV) delivered a strong fiscal Q1 that helped restore confidence in the story, though fiscal Q2 same-store-sales could be somewhat noisy due to the impact of winter storm Fern, RBC Capital Markets said.
The brokerage said in a Wednesday note that it lowered its fiscal Q2 same-store-sales growth estimate to 5.3% from 5.7% previously. For fiscal 2026 and 2027, it expects comparable sales growth of 6% and 5.5%.
Valvoline delivered a clean beat in fiscal Q1, with same-store-sales growth of 5.8%, driven primarily by ticket growth. Gross margin expansion was supported by labor leverage and lower product costs.
The company's acquisition of nearly 162 Breeze stores is expected to add about $160 million in revenue during the 10 months of ownership in fiscal 2026, according to the note.
RBC reaffirmed its outperform rating on the stock and raised its price target to $46 per share from $44.
Shares of Valvoline were up 2% in recent Thursday trading.
Price: 36.31, Change: +0.71, Percent Change: +2.01
Comments