Driven Brands (DRVN) 2 May 242024 Q1 Earnings call transcript

Good morning. My name is Karina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Driven Brands' Q1 2024 Earnings Call. [Operator Instructions]. I will now turn the call over to Joel Arnao, SVP of Finance. Joel, you may begin your conference.

to First welcome Conference XXXX and Call. morning, Driven Quarter Brands' Earnings Good and reconciliation leverage download earnings the The release ratio website investors.drivenbrands.com. on at are our for available

performance and me On Jonathan, today Chief Danny the a walk and Operating for Ferrera, will Executive are Chief Chief Gary and Executive you and and financial Vice Jonathan Vice the Gary President Officer; with and through moment, Fitzpatrick, Executive call Officer; Financial Rivera, Daniel In operating President quarter. our President Officer.

Before our that I'd measures. to management like will financial we non-GAAP remarks, begin remind refer you to certain

You Investor can reconciliations Relations directly Exchange with most company's in financial and and comparable filings its GAAP find the website the the measures on Securities to Commission.

and we regard could factors statements make number and to call, may of of plans, not beliefs subject and our During be also results statements. Please session. to other release These current performance prepared more will materially earnings Today's and a result by Securities our uncertainties see the in these that the statements are future and contemplated a information. cause from by risks [Operator with expectations. actual Exchange guarantees of forward-looking events Instructions]. Commission forward-looking the remarks and our are for to course and this question-and-answer followed filings events and differ

my to Jonathan. partner, it over Now I'll turn

operating and our XXXX outlook. I review segments with first environment. and a who over Quarter detail our results XXXX our by Gary, who how of Driven our work start To XX,XXX full appreciate quarter joining hard highlights franchisees our some it first of will members and an discuss turn results. everyone Brands' us navigate financial continue We team to Danny, discuss and than morning. First I financial year to to Brands' extremely more then Good execution they acknowledge for want will dynamic today begin, strong and macroeconomic the quarter amazing then to will Driven

supported X.X% QX growth, net XXXX, delivered $X.XX. For stores new we achieving year, X.X% sales EPS revenue versus and diluted of adjusted the by XXX prior growth same-store

pleased a key by XXXX. X franchise QX Take our and to being contributors businesses be the performance to solid all Oil continue We of Change

on of call, effects on to able a weather And our I earnings first our confident still Now extremely were the despite solid last challenging the in challenges, of feel year. mentioned the quarter business balance we conditions about and these January. deliver

Gary saw in, we moment our earnings spend He his I release, to in Now Colorado. be pursue another of Senior in with role closer be will Gary. opportunity known you in many assume to former before for has a family you to will President on the as working while want to decided of for Arnao, likely dive And successor. we conduct who Joel CFO Vice a a search who decades. know, closely is colleague of our Gary's Finance, Interim order

has been great behalf success And role himself Gary wish partner focused role. are last Board that transition, expect on a for new person make and appreciate right of great support Gary we will which finding team, will be year. we the and the the available the on in We we management him to the his seamless. this

in for by results conditions turning the weather revenue extreme Now January. to the QX was impacted the quarter.

balance likely also impacted. to and continue the throughout We consumer XXXX, will be ongoing that lower that the will of income the pressure believe spending most households inflationary environment

commercial our that our BXB businesses. this continued by business and strength expect in pressure offset will We and needs-based be

are consumer focused our on We ongoing XXXX guidance uncertainty. delivering despite this

expansion quarter performance, key to Take of challenging Change. the this consecutive the speak one margin of our about locations. basis approximately increasing take company margin drivers positive the same-store our XXX year-over-year franchise at revenue of with want start the great coupled points. marks sales. management a quarter, Despite mix, XXth to And we're with to by particularly I Oil few X moments an Delivered pleased of the

purchasing on to platform, Advantage, Driven Day want an Investor in our XXXX. at which I our Next, previewed we provide update

that this is in now is locations enhancements for our at wallet online recall products launch company have than since and share franchisees making oil already SKUs purchasing additional partners. platform. The our ranging the XX,XXX from QX can on approximately where stores, begun purchase XX% services aimed equipment. affiliates may its supplies from to You increasing an focused and additional of paint, eligible our XXXX, marketplace and and more value vendor on partners, driving XX convenience over team And office and from

to We and to enhancements augment Day, SKUs and And and a XXXX. franchisees, technical advertising. good selling growth uniquely feel outlined Investor as platform such created our we the we company make new on suggestive Driven. our have we very that EBITDA from continue vendor customized including in adjusted $XX powerful stores, This platform, incremental expect we the vendor benefits partners with is million at about this platform landscape by delivering the

Maaco, and QX cash drive to delivered and Our significant Meineke, all continue businesses, flow X-XXX, CARSTAR strong very and franchise in strong margins. results

business weather by give negatively QX softness, by impact revenue of of let And continued a me competitive the revenue. intrusion. on Now and impacted combination segment. was consumer Wash our Margins update impacted an in U.S. lower Car were you the in

As this U.S. mentioned have previous not on stopped new will growth we open our business stores. capital in Wash and all earnings Car investments new call,

proceeds $XX planning on making XXXX. fiscal received is we owned million pipeline $XXX we year team progress properties of divesting when on decision. least million this in still at the Additionally, are made have we QX, and good approximately Through

we're Car business quarter, really solid Wash had a first other our seeing the trends On April. and nice in hand, international

commercial the know business. this our on our carriers. has will with to We XXXX the also turning and from team insurance guidance, year. My we're similar prospects medium- execute to delivering reducing other bottom with medium- on the in into this focus our is we to regional revenue And growing portfolio throughout immediate a sales of and the top look The and both the pleased forward growing Glass right new our to but slower while focused switching consumer, Now our time managing lines in longer-term about scale sure And businesses, remainder the we're business. pipeline Auto on it and is this U.S. build which progress Glass continued building momentum. goals. longer-term retail and assets The Now. of our some that team pleased the on making on with for to remain business, that actively focus the and excited is of means short-, debt the take business, focused Driven an QX saw

generates time. that with reinvestment attractive returns runway returns. We high steady-state mirror and have our a we're incredibly And results valuation for our a long see over motivated platform to

partner, me to my our Officer, discuss let over hand Operating it Now to business key Danny, our Chief segments.

Oil formally Car from to President roles Thank grow Take career President you, Jonathan. where us to He his as in Vice company and Hearing, leadership Operations. Missy wanted Austin joins to new Wash. Field Tim Change. he welcoming at a helping by at also XXX X of the us Missy Tim Missy X I Tim our President. Regional locations Coffee, over from store several to grew new start McKinley. of Sears to countries. where Operations Driven, becoming of is manager held Take Scooter's X at built Walmart, for President served she COO joins Vice X before leaders Lucid our as new

Missy at and to positions gears leadership Circle operational held including QX retail Dollar a a several she QX difficult Driven Scooter's, weather the quarter with environment. CVS, softer team. Switching and Tree Before Tim great from a Welcome, to headwinds and performance. retailers, few was K.

happy results our I'm the However, with achieved. team

was on States January the in particularly our force the closures. first not multiple and weather days XXX storms to winter in United quarter, us retail record to First, major over wettest in store friend tenth lose was due January. the

the mentioned, a demand, households. Despite quarter very increases lower major moderate team consumer sales, some particularly system-wide year-over-year I'll up solid our the was some sales, with EBITDA headwinds, as with on able we softness Second, more have other recently deliver new to not same-store be from saw are hitting income power EBITDA Driven these and platform in revenue, which may others the units. retailers of slack. than making That's shortly, while cylinders, of and discuss businesses, all margin diversified

franchisees Driven our flow. like dedication. Before their more Maaco, businesses. performance, portfolio. I some spending of results, into of the jump iconic significant to CARSTAR, continue years, north to These Driven's are and XX XX% Meineke than a around have and produce They asset-light adjusted franchise franchised of worth I'd EBITDA work are hard been and it's cash Driven's again businesses, segments, which an for of a moment part once major thank part margins important highly X-XXX businesses, got DNA and steady and on for

to Take our year-over-year, EBITDA segment, X of top EBITDA adjusted was on in same-store year-over-year adjusted adjusted bottom system-wide sales, margin. XXX in Oil was led sales, adjusted Moving maintenance EBITDA and its XX% X the X% up streak In Change Take and margin. about and points in to EBITDA in revenue, continued revenue, way growth. which basis QX, XX% up in

north stay differentiated your continues are scores conversion fast locations opened attachment Oil mid-XXs. The approximately net in XXXX. rates also franchised. a to X than of deliver car XXX no box minutes in We QX locations About XX%, in premium more high-pressure with selling. NPS X/X result these XX rate friendly in and because and of less in X is simple oil We of XX top model. than oil ancillary XX% win of changes an QX, Change the our locations additional of business Take

remains for plan to Take unchanged, X Change the to seen growth date. Our we've thanks Oil success

our to customer every the healthy as tap for due our while We leaning end launched new these, locations. corporate ramping operate the channels of appointments. that finished to XXX into and of will last that be year rollout segments, at as the recently will owned. planning such a new we are thanks newer X/X We're franchises, appointments have service new company-owned organic Day, our same-store highlighted growth offering As about sales online locations differentiated open year. and in towards rates, online pipeline vintages will repeat continued into about X/X remaining steady Investor Of

was culture that customers but necessary no changed, any starved appointments Take and to to come no very with we appointment For time for store. an to to led exactly online incremental they the to In change. encouraged results appointments, day per their rolled get we've car channel the stores half next when we've and X's has date. of free out customers appointment was now plan where were seen new We're them. our time XX-plus offer oil Today, that are carefully convenient this history, hasn't years necessary want per

Importantly, in to they never our continued oil X employees of we've thanks customers through over lapsed, seen. Take new seeing the change, Khalid, have haven't channel this change Take franchisees the and Oil Take Mo Oil or been Change were X XX% of X to meaning for either XX to our President success amazing past months. Many been the have

our in part declines year-over-year Moving points. EBITDA business improvements we've improved revenue EBITDA. basis we an about as over of positive The EBITDA our sequentially with adjusted QX some to signs, cost We XXX made adjusted this continued Car maintained about variable of the about EBITDA softening margins From in X%, segment. revenue we XX% did and QX. however, see of of Wash perspective, of into into margin and QX

the a quarter due on basis rents to $X execution of XXXX in by million was about sale-leasebacks. first of higher However, year-over-year the

pent-up The positive growth. unfavorable due business, by Wash was conditions in saw the international in with store days, Wash rebates to unlike drop business, sequential winter to closures of Car we weather loss Oil U.S. business particularly retail solid as in same. domestic XX Gehlan, Tracy future led points These this themes the we for for our QX. lost plan occasions approximately to year-end for preserve in remains made margins, we the revenue. entirely quarter While variable that business U.S. Revenue and QX Car other be our to to declined resulting massive a in tend weather same: and segment another entirely due Change. Wash XXX Car is continues established the cost not business The difficult storms our our result parts in due softness operational improvements received from over be we business within that remain turned our year-over-year membership like basis intrusion. January financial The demand. perspective grow our forced competitive U.S. do

comes in Based to we membership of we markets, to the testing encouraging in it X QX. saw with early the portfolio grew When test X growing in on March. revenue, pricing some these results changes markets half began we the approximately early

program very While rates both early improved in we're and innings, churn conversion member rates. has this new materially

We for Wash Car the and could this program trajectory remain business in closely continue XXXX. optimistic to mean the this monitor what U.S. about of

solid X deliver Maaco collision regional to insurance of be Our remaining to EBITDA, in and Now, refranchised to no same-store systemwide Now had in started individual XX%. team grow heavy and company-operated of area performance. plan us. focus It's company-owned Auto carriers negotiation. year. decreases cities. growth strategic EBITDA hasn't in and growth a PC&G cost on development looking with in a the XXXX changed, adjusted X revenue we secured for we QX revenue sales. When our for leads CARSTAR regional pipeline AGM are of sales. that Michael sequential Auto collision to This the a team and the segment Glass Maaco adjusted insurance. year-over-year these that naturally delivering The that improve while revenue right Now for with has us a continues leaves foot noting on stages changes positive performance robust center. of excess locations driving margins the generating was of The centers agreement Macaluso a in continued in of January and Auto with in and established structure one latter Refranchising CARSTAR, this reduction tale at worth significant also multiyear by have financial and performance a Glass segment Glass

will we that insurance second optimistic to XXXX. regional see half are the growth revenue We of start in in

driven year-over-year the continued strong and Services like also increases from EBITDA our amazing performance adjusted had Advantage. growth by on and Take from and a benefits revenue, Driven adjusted quarter spoke echo Oil segment margin, ago. Spire, solid which would moment with to sentiments X-XXX Lastly, Change I that Platform another X in EBITDA directly about I Jonathan's

one the We truly and facing EVP both are franchisees excited deliver this Marshall, results headwinds growth our Kyle achieved proud segment into Platform I'm just short quarter. have able platform. To to unique of of team been with the despite in many employees year that the and year-over-year summarize, team, building Driven the

our and businesses we of to want still much While where Glass the park be, Take U.S. to strong. businesses Wash there's X work franchise our to ahead Change get them Car to Oil continues remain out knock and it

like With Gary. to that, I'd hand it over to my partner,

rest welcome, the I This for our performance review and outlook will our Danny, Thanks, and quarter first discuss morning, the of everyone. financial year.

a I executive It's incredible employees. of being to I take and and to of want revised remaining moment it partners. our the on thank a a delivered growth of Driven Before where needed I for was honor to Danny on team just and Jonathan all cash focused outlook. ago. of delevering. alongside such year great now joined is bit Directors on we hyper both the challenge, adjusted accelerating a rest and work XXXX Board generating been a cores flow team, Brands of XXXX start, an in our And while The focused you, while

with time I'll and to spend a company, working with with mentioned, While miss will Jonathan I forward a more private my long-term able to being joining be friend. Colorado. in partnering everyone, look I family as

Brands bright has Importantly, that a in I future hands ahead. knowing believe very capable is here Driven and

Now our turning to results.

Danny January. the discussed, U.S. had the especially during we extremely and Jonathan quarter, As during weather challenging in

line. increased quarter with sales they and experienced from the lower team increased approximately XXth with EBITDA year-over-year, straight bottom in these particularly I and we we our cash for households. how challenges, EBITDA income both positive Even delivered especially Adjusted sequentially consumer am manage well demand of quarter dynamic and operations our moderate how growth. still same-store softness proud the some Additionally, from of XX%. margin a executed flows environment, adjusted

by were For growth. was the net year-over-year X.X% $X.X the same-store system-wide first and X.X% year. new growth driven our quarter, prior sales versus XXX This sales up billion, stores

our As being came those the majority XX% maintenance the store approximately of franchise new openings of from openings. planned, with segment,

Our with we segment. of the lower full quarter was performance weather line generally was same-store poor well for by first the most but weekend our driven our primarily as than as expectations year The outlook sales businesses impacting Car quarter. the in in impact the for in weather provided January Wash XXXX, extreme for rate growth the lower the

X% sales majority the second and be the We of for the X% in continue year. expect to for full half of growth year and the same-store to between to that occur

$XX.X by an $XX.X versus grew same-store and reminder, performance our XXXX an and during segment. adjusted prior EBITDA now increase the year X.X%, EBITDA our our will Total highest we In quarter for $XXX million, on million million million, XX period. first of of representing sales $XXX in a same-store Cash focus margin XX%. I was quarter, X.X%. an increase the and operating activities was had million points were approximately As the provided by basis $XXX.X was increase Adjusted quarter. sales segment, the XX.X%, Maintenance was versus sales year prior system-wide revenue in X.X% respectively. of

attachment and Change. same-store Oil Take Our sales margin drive of expansion strong our driven products, rates growth were X and ticket expansion coolant, helped particularly ancillary by which

We of XX% million During representing and respectively. revenue XX franchise the of stores EBITDA XX million, $XXX.X and stores. X growth stores we company-owned XX.X%, achieved with $XX.X and opened quarter, of net new adjusted

decline segment, Wash operations, same-store which U.S. volume EBITDA and year of margin revenue driven intrusion. our sales XXX We delivered lower versus declined basis increased of weather XX.X% and to at saw EBITDA adjusted $XXX.X points competitive adjusted million. Wash million our this due Car by X.X%, $XX.X While was period. In prior Car the

While Same-store of in respectively, being these weather sales rebates and And and our prior EBITDA represent versus X.X%, disruptions experienced the year system-wide XXXX. In despite benefit refranchising in PC&G our sequential we million, X.X%, driven resulting X.X%, the at was were of earlier of EBITDA considerable performance and Glass collision by These period, adjusted X.X% and recognized and onetime stores of $XX.X million, was significant primarily quarter million, some of sales businesses. declines revenue decreases the respectively. in XXXX. up by XX.X% year $XXX.X segment, company-owned this the the revenue $XXX.X from first and franchise adjusted having Auto growth were declines QX the driven XX.X%, of Now. fourth in X quarter increased

million year margin our which effective cost Platform EBITDA prior which the basis $XX.X will Corporate other increased million versus and EBITDA X.X%, Services of due decreased revenue points segment, X.X% $XX.X of respectively. was expenses, to we of primarily growth XX.X%, to of the In XX.X%, management. Adjusted and quarters. we delivered adjusted and future for in hit timing third-party expect to due spending XXX

on I key adjusted some components EBITDA. focus below Now will

quarter, year For amortization and of million, totaled to due which $X stores. million $XX.X prior was in from increase the the depreciation an company-owned expenses an increase

quarter D&A due than was interest a to expense as was quarter and decrease asset in first year, same on is driven sale lower our for $X.X Net flat that with QX of $X.XX termination with the prior the to in lease capital first versus consistent the period consistent the $X.X were full slightly that of $XX.X million last million I adjusted increases million, mentioned. Adjusted and the Total million versus for interest Investor resulting quarter the million income due This million decrease was investments charges last versus outlook Big net Maintenance year, and in the shared This primarily $XX.X September year from a $XX.X we rates our which Gross as XXXX XXXX. and activity our $XX.X Day diluted just quarter, of XXXX. net or we was of higher in Additionally, income XXXX first of by XX% quarter. use increased resulted $XX.X $XXX.X in is in increase year. the expectations expense the of the interest million. the shared This $XX.X reduction based the same at million EPS the impairment period quarter plan of million for Dream $XX.X $X.X well income million a last from net the XXXX leaseback million, segment. primarily of revolver. was in CapEx

are enterprise we rolling out in As ERP new of I mentioned system. last planning process a resource quarter, or the

and we million, we $XXX as balance million move on revolving along liquidity, in $XXX in facility As while At ERP anticipate for million this flows of the does QX decline week, computing cash and cloud these deliver multiple cash $XXX this a delevering XXXX, not our million, U.S. first generate rest cash versus a GAAP to reminder, cash X.XXx notes million the undrawn held leverage QX had of U.S. in Oracle equivalents, we with and securitization, was the for of capacity we to on our to $XXX sale. will with We future flows. earlier project funding, through CapEx million be senior track generated project credit legacy as balance the as million through declined car replace through sequentially XXXX. with have quarter, year. our facility. sales at end, continue consider investment. down systems At increased our amount on during revolving quarters to in year-end cash comprising our decreased ERP We will this variable to end a and investment and operating operating investments flow are capital we X.XXx $XXX XXXX to to of XXXX. At assets Fusion. Therefore, of in quarter remain continued consistent continue our net the all $XXX ratio throughout expect wash end, spend, credit through cash $XX least now quarter

of the additional turn liquidity utilized not which XXXX. now if be funding continue conditions met. I Our be will account discretion for could fiscal specific million to variable company's outlook $XXX remainder at to the our the does of for notes,

some significant fourth had and first quarter earnings provided we softness we are XXXX outlook fiscal quarter consumer we noticed call. in spending, While weather-related on we reaffirming our issues our the in that

EBITDA of a $XXX $X.XX As reminder, revenue and consisted $X.XX of diluted million and million of adjusted adjusted EPS $XXX that to billion between billion, to $X.XX $X. of

also X% We of sales X% continue to same-store to expect in XXXX. growth

we to total While provide year. year-over-year of that adjusted growth specific approximately the continue don't we quarterly outlook, expect come in the will EBITDA the XX% second half of

As our we weaker Car see and Glass U.S. lap comparables U.S. and improvement Wash continued in businesses.

QX to throughout second sequentially digits. anticipate We the we adjusted strong very growth be quarter. EBITDA had we year. the expect Last peak single declined in EBITDA currently the quarter Therefore, second and in remainder to of low adjusted a year,

growth generating X.Xx year-end. on of we our cash our in below focused accelerating target driving to are in hyper down committed segments, pay down leverage to by on we debt order business While to remain remain and focused

second sequential delevering a leverage QX While of decrease continue decrease we expect of the occur the to in greater majority the the in in and we modest in slightly year. experienced half QX, to expect

turn now to will I over call the operator. the back

Your Stanley. Simeon comes Instructions] from Morgan question [Operator Gutman from first

this ask to car mentioned wash heard environment. wanted I you about international in I positive.

reason right seems now. and competitive because a bit performing a curious is U.S. weaker. the the it it's membership retail customer I'm it, talk matters occasional the or up maybe call to models how Can because, disadvantage? sure the little about or weather little in show are not maybe stickier set So little much just that you didn't this better quarter. this bit a that have like Is if a or just

revenue Look, Danny And on chime sort contributing think X in. QX changed. and hasn't loss retail some intrusion factors extreme were really start that really softness definitely or competitive the the of weather lower certainly can obviously, conditions I'll the Simeon, I in with consumer.

I and new in pricing kicked targeting we is early promotion that tested effort showing QX nice Danny membership is results. think mentioned some what this off

don't you to So if add Danny, I want anything? know

No.

seeing Jonathan positive pricing retention. that into into mean a and echo the to I'd leaning member bit just change value just kind I what nice changes said. conversion we're think little of I more, we're a

there. So it's early innings

into to target. follow-up talk then thinking And glass it's a guess but a only guess, about sort EBITDA. I the number paint of businesses among XXXX way path collision I'm and that the different or say But This sort XXX my is then is in thought expected about is the and maybe pieces contributions maturing on negative of pieces the this businesses. that different path, look would of it the charge. if year, maintenance that quarter and the clearly, higher Okay. around moving in makes sort leading progression the looks a is, the reluctant or to a different the growth sense. given going, that Is moving the you and like complexion to where I pieces then positive we contribution

Simeon, in is what underwritten the maintenance Yes. seen for the growth profile. multiyear we've we've that the growth Thematically, segment

So business. the then opportunity grow Glass to nothing of the do platform that continues excited really, Driven there's leading time, And we're different about terms Advantage to charge. maintenance in Obviously, there well. our really over

really different right focus is some the Wash to we now reiterated certainly Car U.S. the anything this volatility you're a again, trajectory But seeing call, of and gave morning on great is QX, our in the business. the still within But all nothing thematically, thematically, different not seeing the delivering outlook Gary XXXX. So in that you're about last what earnings business.

of Peter Baird. from the Your line next from comes Benedict question

Simeon's follow-up quick I luck. a question. guess good Gary, on

of doing, Just would Have assumed the exactly out, outlook improvement you Car what's Or if the And first view now with of you're impacts sure you're can question. be what rolled to not Wash tried? the you've of give your and year? bit doing baked balance Car year? seen that in the if detail What's through you those that my play kind the to on Wash, for balance that the changes you incremental I'm what us more into that? were initially there? That's your working a from little

a point not test. test. We're a we a number the rolling momentum carwash changing It's for see Pete. Yes, I'll stores at at or out positive this continue outlook level. from to driven of as a We're start, XXXX to this any

is the outlook again, that on and that is, focus Our morning. this hitting we we've given, reiterated

important have I Austin, running new develop is revenue and sort of membership, about our is obviously and Danny we to how think which the create in higher of that thinking stream. do test really the reduce levels volatility predictability very leader, been Tim

building base in membership general that our think I that's incremental retail, So still segment. to we're this seeing softness still but sort in of is that predictability focus. focus on create And our

enough. Fair least, Okay. your -- that guess, three it it it the was of impacts your proceeds $XXX to million kind then kind portfolio. at do? realizing U.S. is Just it's motivated? of curious in days make it Car harder mindset of make this of focus disposition to year. from Does Jonathan, asset one business I your managing relative performance ago? where more of the kind of confidence how Does the XX areas mentioned, the curious I'm today you Wash And

day-to-day held running is on working isolated for are of sort the completely sale Pete. of Yes. the from the business, really The assets we're dispositions that

$XX QX. in the So we're of million with I think pleased proceeds

least $XXX at still is the balance for year. of million the target Our

and So distinctly that day-to-day running is completely separately business. managed the the really from of

then Danny on now. Tim Wash let I'll feels and the business, about the efforts how he U.S. with think Car I obviously board talk about

Yes.

business, out Wash the focused reiterate, is laid we in mean, really that as just X the U.S. team I Car I'd that on there's far things As QX.

although see and really cost variable the QX. it's a And I that some preserve into let's we Tim doing nice to margins, going we QX, which mentioned, due QX. So made the preserve team in entirely that done and in sequential rebates degradation you'll have a in improvements job

you encouraging. has double-click if The So Tim a nice QX. talked rates. seeing team we into the really did job membership churn seeing test that, revenue, We're done and what then reduced conversion is We're growing in increased we've rates. the And which about. preserving

want we see. things all seeing we're to So

question from of Your America. Robbie Bank next comes Ohmes from

when And the negative curious weakness. segments, to is really which better we consumer you would low-income get segment more weakness of not? example, on weakening, more the on And do little have kind look historically, helpful? Jonathan. income or Any if which thoughts My I'd and I low-income think be sort could worse? segments question do first so be low Glass at does a consumer Auto was of for that segments exposure consumer when the color

Yes. households. of Great. is we direct that, impact calling having with that given most Thanks, I'm saying be Robby. challenged the throughout lower environment, likely Really, what customer sort year. believe income cohort this we're to not the is any What at I'm the the of individual inflationary of that moment the saying as our balance is businesses do out

So one. that's sort of number

XX% are I last in think you about call, the our when think come favor. our portfolio, on Number couple in there's that Driven customers. commercial of naturally of BXB sales we things our a or about one, mentioned from

So that's income obviously, that household with there's a really nice no BXB there set. impacts hedge. customer And

Robby are the of you majority I our think across the businesses, look thing needs-based businesses. is our portfolio, other if

those off. it's to put So very hard

have done. really to You those get

look history a at years. been of Driven public we've obviously, If Brands, only couple and you of the

X over major 'XX, XXXX, see impact of needs-based we minimal the X stress time those points, very periods. obviously, the sort because of at last look March financial 'XX businesses, time time our in of you If and

incremental household but Driven calling manage incomes is I environment, I to positioned the just through inflationary out is think I'm with think to that of uniquely So those there likely challenge that. sort lower

say. So that's what I would

with appointments. with all online of curious, customer? rocket, just at a a that how just if the just you. and drive-up on ton that Does appointments. online like helpful. off And do That's follow-up, the you Got manage really a X get I'm interfere you that just then Take takes

appreciate this I doesn't is it Danny. No, the question. interfere. No. Robby,

nice So has really job accounting done the of team a for.

business won't Our model The way that accounts appointments we want for that in predominantly is at come rolled folks any necessary. and out it appointment we've model, time, no to interfere. our

laid we far. So it's pretty intelligently seeing and out, so what like we're

question from from next Your comes Barclays. Sigman Seth

seeing see demand of the color trends. the and that segment more just even January? quarter the the Maintenance the rest you and Any difficult on after on did cadence focus I to quarter? guess, frequency? just then early there the less is well? lower talked as what wanted I on here driving is second customer, about, on Any that the more issues end you're a transactions, that Or perspective just down trade that based you in

we're think I to sort that income We're of saying we pointing businesses the household inflationary Jonathan to challenged not could just reiterate, conditions. want that lower yet. Seth, customers with And be our again. of ongoing any seen have impact

just conditions I QX. very the think Within year. maintenance, challenging the around and think weather we're see did we balance in I So of being QX prudent

retailers think that. the States in United saw I most

Maintenance truly our is and business, The business X both our news Oil good a our segment, about category. it Take needs-based Change Meineke

So see those catch obviously services. that QX, some we looking think in those did for customers we while challenge that we we're up

an year. Obviously, that on at balance the point eye in that consumer throughout the the closely nothing segment very keeping So us. how concerns we're reacts of this

most weather then that So normalized have I is the heard a say pent-up is comp of overall I fair evidence think business through, markets, half seen just the just that. That's in you've there the second across that segments. demand expected to the coming in growth the has to guidance, of question And I the of I certain think year. as around come guess follow-up you

quarter? imply that like the quarter lot does look second will a So first

your about on say let talk business would very and that question Gary that with for maintenance the I finished I'll then excited we're guidance. And X Yes. pleased next sales the same-store quarters on for quarter segment, the how first the business. about

we where mean, second at Yes. that directed of the half changing. QX I we I and the thought in in the most I least on that quarterly where EBITDA come QX specifically I adjusted the basis. don't out I comps. comps expect EBITDA see because don't the and think of our was to is give of mean pretty see will usually growth just an We is lapping largest quarter year adjusted the guidance.

it. that's think I

Your McNamara next Genuity. Brian Canaccord comes from from question

changes market. well X changes or for received [ turnover concerned concerns It Will Brian. investors. the is reassure seat? region The Madison the guys Hwang you typically CFO was circumstance naturally This the aren't in will on just in by really by recent ] the investors year regardless of the

I'll but... and follow up, Well maybe start of then sort with I'll Gary,

work or my repeat in I've my my opportunity be and Yes. an known to ever loved into family has move by Jonathan in family But with what I with someone door. and go Colorado. walked for back back X I side the Colorado I'd said decades been to working is since with Joel Danny. And

the in together, and have Mike the out. done few here So been everything a years has company knows of X and for done and us

I smooth. think be transition should So pretty

is Chief Yes, I a a think of is is Interim. it's lot phenomenal personal Beland one going all Gary feel Officer. decisions. talent thank here. there year. a got and bench And amazing we that this the overly Accounting really We've to an Madison, of a would opportunity good about as has I good got And remind person XX Driven no you Michael question. months. our I Brands, over for fabulous partnership do the that's important the is strong Gary Joel and would just in again, last job

Christian from question from Your comes Carlino next JPMorgan.

in of some result wanted Are where pipelines local slow Do pressure recent does from development see you maybe of we've pricing the growth value? in need bottom? the continuing some to it unit certain follow Wash to to the lean a on found Wash. seem like in industry given maybe next Just Car markets dynamics are up you long. the into changes just a And quite Car is Or into peers the that competitive business year?

Yes, with Danny probably the development talk the sort other Christian, and question. I'll view, about can a start then little of bit

I think I've said it multiple occasions. on

washes between to is United obviously in with years massive the X,XXX that online then, and new think in of washes past question. tunnel we've in number I in express we'll in last a And further pipeline, long But I the seen again, in over times on we been will somewhere we've the have come lead States, while sort X,XXX the massive which of XXXX. moderation moderate of first see think car I have on sort car that the impact. increase X X this think Danny, a said the the XXXX. category,

we're before, we've it Christian, hugely U.S. as business, memberships think to I Yes. car business the wash question, look, a mentioned indexed in that predictability because just creates and it that on in under part of membership first relates important business. obviously our

and thing like the we're base. into for, membership just leaning churn. exactly to do So And conversion a to result build is seemed member reduced natural value our hoping what up increased

it with hoped it's what seeing, we happy we're we're So what would. exactly and doing

implies helpful. low weather last overhang. quarter, That's it. the pressure pressure guide the you from of lower macro income said And some about least for Got consumer to I end talked you the think and continued balance of at year. continuing And the inflation

the reiterated achieve where while low range, So areas laid Day? you are it outperforming the the Analyst more can Or you in is at you the biased still out you end? now you towards think other EBITDA

what we're confidence adjusted everything mean earlier, EBITDA, the have don't it's us is we still that we set But on I of this track consumer like everything the questions on our No, whether course, Day, that's move top goal we was the So any when everything we're we year, towards, think talked impact [ still year. as on there range we looking drive the end will paydown, plan right? for and ] Yes. XXXX. I cetera, range at, about et will things debt said of on obviously for all XXXX. through Investor

comes Your Sachs. from next question Goldman from McShane Kate

Are you especially segment? of between maintenance XXX the in year? open the XXX we still openings, about to cadence stores expecting and should think And this how store

ago. our gave we has in days guidance the on about of nothing terms call changed that Yes, XX

with count the major along that call. So on sales financial unit numbers assumptions the and we're that gave we same-store reiterating

half weighting bit but of unit So has I changed has would year, nothing a the guidance. terms see back in little of that overall of our there. count And of we in just say you more expect the typically, nothing do stores changed

comes from Stifel. question next Chris from Your O'Cull

explain My segment. about U.S. a And Jonathan, Wash Car other? support wash the I strategically you question how is car international the had the follow-up. each businesses can and then

Sure.

of call or we strategies, is models equipment, independently geographies. franchise-like. what X almost are our through do operated time could there X operating European because obviously, promotion right pricing spend a different talking Wash But think an the together right you think, teams Car the I There's chemical. lot strategies, different the model

sharing buildings, what's chemistry, of with best the value engineering working, the again, what's not opportunities, more really marketing of understanding working and teams, it's whether promotions. practices, it's the So both

of that's leverage how the sort groups. we So really between leadership both

of you a national the thesis auto have that driven consumer for Part services. is platform

Car an Wash strategy? business International support does So how that

really part to Our Tracy initial of August Wash business of Gehlan Car that deliver is XXXX. entry fabulous continues a international bought in into results. our solid that business run U.S. as market the we by business And

I between great And Tracy and the there's that doesn't necessarily deliver learnings of to predictable best just each again, we say U.S. lots results, very So leverage stable course, that our results. and continue team of it would naturally, business. practices other. But impact

looked describe once how Fair And the impacted or the after by Car the lastly, can know the was that I U.S. weather. Wash then Okay. Wash guys you through you profitability got enough. weather January EBITDA in U.S. But period? Car

with a how through International performing happy Yes, pretty difficult remarks, we've into tell that Chris, April, think in trends as with within business or periods prepared business. the Tim we've the our we certainly in in U.S. the and Car I right And now periods I Wash we're nice are said is January. And the seeing subsegment I on weather seen Danny will Austin periods. gotten you like reporting get don't

next from Piper Sandler. Your question from [Operator Instructions] comes Peter Keith

X collision I quite I'll not played in PC&G is wanted you negative standpoint. seen X we've segments, negative, a to and tend about I X.X%? one dig talk I steady I'm about into to role business if do was in think comp but that, the ticket where as turnaround, pretty robust really the there. Glass from know the being X deceleration comp a weather but steady Could sure different the positive. first.

out fundamentals the flesh of you sales some the could that's dragging So, there? on

that in comments, steady, of Sure, I looking very They're long-term you part look do Glass pretty segment Peter. quite as if Paint The side of to for the franchise that businesses, to PC&G of segment, north Danny. Those do I mature at XX% Collision mean, continue a delivering to business. think what is the margins Jonathan is well. indicated play as This on. so. mid- said we're his us. of kind Look, they spot continue and and that at are we business,

Just and got future top early and integration. on just focused growth, the through the innings, like excited We're we mentioned. about line, we're both bottom we're in very And there.

that comp low you environment area for -- for now a in Okay. single-digit I question, don't want this are guide guess to comp I guess, segments, won't this answer of the is my the we business? low but

mentioned, level, comfortable Pete, with is reiterating the for X%. a And X% a year. guide a I think And X% we're the Gary which that but of to for full reiterating our to full range on year, which we're same-store X% sales we we're very don't again, level. guidance full segment at driven

All right.

segment. positive the to pivot Let's

nicely, I that intrigued a comp is what the improvement. even be unpack operationally, a the so and help to What's quite maintenance improvement did QX EBITDA So bit, growth very me profitability Year-on-year similar to accelerated guess expanded EBITDA driving there? you margins us? off for there of the

Yes.

team amazing an of kind the Khalid are Mo and X fronts. job think, on I So doing

number expense one, say, management. I'd So just ongoing

So that's one obvious positive.

The our improving mix. second one is P

let's part, our So really becomes that just talked past. specifically, The very mix. service leaning this teams and of profitable a our are we've for into important And the and in about coolant us. product a that's services, more say,

time. of heavily to margins will then naturally lead to the open openings going So business be we our will to the margins of increase as franchise in continue business be more is looking weighted franchise gets naturally as an to over just that's X/X thing a kind as well. last based. That And grow

your call. There conference further this participation. That concludes time. for at today's no are questions Thank you

You may now disconnect.