Driven Brands (DRVN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $612 million, up 1% year-over-year, with system-wide sales of $1.7 billion and 0.5% same-store sales growth.

• Adjusted EBITDA was $152.2 million, up 4% year-over-year, and adjusted diluted EPS was $0.35, marking the 14th consecutive quarter of positive same-store sales growth.

• Net income declined to $30.2 million ($0.18 per share), mainly due to higher payroll, impairment charges, and reduced gains from sale leasebacks.

• Take 5 Oil Change led with 19% unit growth, 6% same-store sales growth, and 16% revenue growth year-over-year.

• Michael Diamond appointed as CFO, effective August 9, 2024.

Financial highlights

• System-wide sales reached $1.7 billion, up 1% year-over-year; total revenue was $612 million.

• Adjusted EBITDA margin improved to 24.9%; operating margin was 13.2%.

• Net income was $30.2 million, down from $37.7 million in Q2 2023; adjusted net income was $58 million.

• Diluted EPS was $0.18 (down from $0.22); adjusted EPS was $0.35 (up from $0.27).

• Operating income was $80.5 million, down from $97.6 million year-over-year.

Outlook and guidance

• Full-year same-store sales growth outlook revised to 1%-3% from 3%-5% due to softness in car wash and collision segments.

• Revenue expected at the lower end of $2.35-$2.45 billion; adjusted EBITDA at mid to upper end of $535-$565 million.

• Adjusted diluted EPS expected at the higher end of $0.88-$1.00.

• Net store growth reaffirmed at 205-220 stores for the year.

• Liquidity and capital resources are expected to be sufficient for at least the next twelve months.