Operating income for Valvoline’s Retail Services business took a dip while sales increased for the quarter ended Dec. 31, which is the first quarter of its fiscal year. Meanwhile, it still awaits the completion of the sale of its Global Products segments to Saudi Aramco.
Operating income dropped for the quarter, from $52 million in 2021 to $29.3 million, a 44% fall. Sales from continuing operations increased 16% to $332.8 million, and system-wide store sales climbed to $644 million, a 17% increase.
Valvoline no longer reports results for Global Products, which includes all motor oil sales, after its agreement to sell the business to Aramco for $2.7 billion last August. The transaction is expected to close the first half of this year.
This comes after a decision to make a sharp shift in business strategy to focus solely on Retail Services, which encompasses its oil change stores in the United States and Canada.
The company now classifies Global Products as discontinued operations, meaning current results are compared only to past performance of Retail Services.
With the anticipated closing of the sale of the Global Products business, to the company is focusing on driving growth and increasing value of the new Valvoline, Valvoline CEO Sam Mitchell said in the company’s earnings news release. “The long-term model of increasing same-store sales; expanding our store network, including an increased focus on accelerating franchise growth; and developing new services for an evolving car parc will allow us to grow, while consistently returning value to shareholders through an enhanced capital structure,” Mitchell said.
“As expected, we saw robust same store sales growth across our system, driven primarily by ticket and aided by continued gains in vehicles served,” Lori Flees, president of Retail Services, said. “The strength of top-line growth, along with meaningful increases in non-oil change revenue give us continued confidence in our sales outlook for the year.”