Driven Brands (DRVN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $592 million, up 2% year-over-year, with 56 net new stores and 1.1% same-store sales growth, marking the 15th consecutive quarter of positive comps.

• Net loss narrowed to $14.9 million from $799.3 million in the prior year; Adjusted Net Income rose to $41.8 million and Adjusted EBITDA increased 14% to $138.8 million.

• Take 5 Oil Change and franchise businesses were key contributors, with Take 5 achieving 15% revenue growth, 5% same-store sales growth, and 14% EBITDA growth.

• Strategic initiatives included the sale of PH Vitres, divestiture of U.S. car wash pipeline properties, and a focus on reducing leverage, which reached 4.5x net debt to adjusted EBITDA.

• The company remains focused on delivering its 2024 outlook, reducing debt, and active portfolio management.

Financial highlights

• System-wide sales grew 2% to $1.6 billion in Q3.

• Q3 net loss was $14.9 million ($0.09 per diluted share); Adjusted Net Income was $41.8 million ($0.26 per share).

• Adjusted EBITDA increased 14% to $138.8 million, with margin up to 23.5%.

• Interest expense was $44 million, up year-over-year due to refinancing costs.

• Nine-month net income was $19.5 million, compared to a $731.8 million loss prior year.

Outlook and guidance

• 2024 revenue guidance updated to $2.33–$2.43 billion, expecting to finish at the low end.

• Adjusted EBITDA guidance is $529–$559 million, with expectations toward the mid to upper end.

• Adjusted diluted EPS expected toward the higher end of $0.88–$1.00.

• Net store growth of 205–220 stores reiterated for the year.

• Net leverage target of below 3x by year-end 2026 remains in place.