Driven Brands (DRVN) Goldman Sachs Global Consumer and Retail Conference summary

Capital allocation and financial priorities

• Announced plan to reach 3x net leverage by end of current quarter, with a long-term target of 2x-3x net leverage for flexibility and strong balance sheet.

• Authorized a $100 million share repurchase, representing about 5% of market cap and 13% of company float.

• Capital allocation prioritizes both Take 5 growth and shareholder returns, enabled by strong cash flow.

• Leverage reduction is expected to come from EBITDA expansion rather than debt paydown.

• 2026 outlook projects $125M-$145M in free cash flow, supporting both growth and capital returns.

Take 5 growth and operational strategy

• Take 5 is the main growth engine, expanding from 40 to 1,400 locations since 2016, with a goal of 2,500 locations and a pipeline of 800.

• Plans to open 150+ locations annually, with a near-term mix of 50/50 company and franchise stores, shifting toward more franchise over time.

• Company-operated stores deliver mid-40s four-wall margins and strong IRR, making them attractive investments.

• Pricing is managed algorithmically, balancing cost increases, market dynamics, and local factors to maintain gross margin dollars.

• Take 5 segment EBITDA margins are expected to remain in the mid-30s long-term, despite short-term margin headwinds from cost increases.

Consumer trends and pricing environment

• Lower income consumers have shown moderation since Q1, but trends stabilized in Q2; resilience observed in other customer segments.

• Premium oil mix and attachment rates are rising, with NPS scores in the 70s.

• Oil change industry remains rational in pricing, with promotional activity peaking seasonally in Q2.

• Price increases are passed through as needed, with a focus on maintaining gross profit dollars rather than margin percentage.

• Non-discretionary nature of most services supports pricing power and demand stability.