Valvoline (VVV) Tops Q1 EPS by 9c, Revenues Beat; Raises Q2 EPS Guidance

Valvoline (NYSE: VVV) reported Q1 EPS of $0.39, $0.09 better than the analyst estimate of $0.30. Revenue for the quarter came in at $607 million versus the consensus estimate of $581.91 million.

"We are pleased with our start to fiscal 2020," said Sam Mitchell, CEO. "Core North America had a strong quarter, driven by substantially higher branded volume in the retail channel and benefits from the operating expense reduction program announced last year. Quick Lubes continued its solid top line growth of over 15% for the quarter, while profitability was only up modestly to prior year due to increases in operating expenses which are expected to moderate. International returned to profitable volume growth in the quarter."

GUIDANCE:

Valvoline sees Q2 2020 EPS of $1.40-$1.51, versus the consensus of $1.43.

Overall first-quarter performance exceeded the company's expectations. Recently announced raw material cost increases are expected to modestly impact profitability in the second half of fiscal 2020.

"Overall results in Q1 were encouraging,\" Mitchell said. "Looking beyond Q1, we expect profitability in Quick Lubes to improve and volume growth in International to continue. We\'re making progress on our plans to strengthen and maintain the foundation of Core North America. While we anticipate volume softness in the segment for the next three quarters on a year-over-year basis, we now expect full-year Core North America EBITDA to grow modestly due to the strong Q1 results.

"With each segment on track to meet or exceed its profitability targets combined with the strong start to the year, we are raising our fiscal 2020 EBITDA guidance to $495 to $515 million, despite the recent increases in raw material costs."

For earnings history and earnings-related data on Valvoline (VVV) click here.

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