Valvoline Inc. (VVV) Q1 2020 Earnings Call Transcript

Valvoline Inc. (VVV) Q1 2020 Earnings Call Transcript

Beginning the fiscal year, Valvoline adopted the new lease accounting standard.. The strong start to the year was driven by a robust contribution from core North America, ongoing strength in same-store sales and top line growth in Quick Lubes, and profitable volume growth in International.. Quick Lubes had a good start to 2020 with strong system wide same store sales growth of 8.3% and solid unit additions in the quarter.. EBITDA growth was limited due to the impact of these ramping new stores, short-term labor cost increases and higher SG&A.. Branded retail volume grew year over year, but was offset by weaker volume in the installer channel.. We saw a return to volume growth in International, primarily from our Eastern European acquisition completed last year.. Let's take a closer look at performance in Quick Lubes on the next slide.. We've added 106 stores since last year as we remain on track to add roughly 100 stores per year over the next few years.. Excluding the impact, gross margin rates would have only decreased modestly year over year in the quarter.. We believe that the approach will allow the Quick Lubes segment to deliver strong double-digit EBITDA growth for years to