Yahoo Finance Driven Brands Holdings Inc (DRVN) Q1 2024 Earnings: Misses on Net Income, Aligns with Revenue ...
Revenue: Reported $572 million, a 2% increase year-over-year, falling short
ofbelow estimates of $584.40 million.Net Income: Achieved $4.3 million, significantly below the estimated $28.48 million.
Earnings Per Share (EPS): Recorded at $0.03 per diluted share, well below the estimated $0.19.
Same-Store Sales Growth: Maintained growth with a 0.7% increase, marking the 13th consecutive quarter of growth.
Adjusted EBITDA: Rose to $131 million, up 6% from the previous year.
Operating Cash Flow: Increased by 64% to $60.3 million from $36.8 million in the prior year.
Liquidity: Ended the quarter with total liquidity of $308 million, including cash and undrawn credit facilities.
Driven Brands Holdings Inc (NASDAQ:DRVN) released its 8-K filing on May 2, 2024, disclosing its financial results for the first quarter ending March 30, 2024. The company reported a revenue of $572 million, closely aligning with analyst expectations of $584.40 million. However, net income significantly missed the mark, standing at $4.3 million compared to the estimated $28.48 million.
Driven Brands, headquartered in Charlotte, NC, is North America's largest automotive services provider, offering a comprehensive range of services including paint, collision, glass, vehicle repair, oil changes, maintenance, and car washes. The company operates over 5,000 locations across 13 countries, servicing approximately 70 million vehicles annually.
Quarterly Performance Highlights
The first quarter saw Driven Brands achieve a 2% increase in revenue year-over-year, with system-wide sales rising by 7% to $1.6 billion. This growth was primarily driven by a 0.7% increase in same-store sales and the addition of 144 net new units. Notably, the Maintenance segment reported a 5% same-store sales growth, spearheaded by a 7% increase in Take 5 Oil Change services.
Despite these gains, net income plummeted to $4.3 million from $29.7 million in the prior year, with earnings per diluted share dropping to $0.03 from $0.17. Adjusted EBITDA rose by 6% to $131 million, and cash from operating activities surged by 64% to $60.3 million.
Strategic Developments and Management Commentary
During the quarter, Driven Brands announced a CFO transition, with Gary W. Ferrera stepping down. Joel Arnao has been appointed interim CFO, with Michael Beland serving as the principal financial officer. CEO Jonathan Fitzpatrick expressed confidence in the company's strategy and the seamless transition in financial leadership.
"We are pleased with our strong performance in the first quarter of 2024. The Maintenance segment once again delivered exceptional results, largely driven by Take 5 Oil Change, which saw same store sales growth of 7%. We increased total company revenue, managed expenses and achieved our 13th consecutive quarter of same store sales growth," said Jonathan Fitzpatrick, President and Chief Executive Officer.
Financial Position and Outlook
Driven Brands ended the quarter with $308 million in total liquidity. The company reaffirmed its fiscal year 2024 outlook, expecting revenue between $2.35 billion and $2.45 billion, and adjusted EBITDA between $535 million and $565 million.
The company's balance sheet remains robust with $165.5 million in cash and cash equivalents. Total assets were reported at $5.89 billion, with total liabilities at $4.98 billion, demonstrating a solid financial foundation despite the challenges faced in the quarter.
Conclusion
Driven Brands' Q1 2024 results reflect a mixed financial performance with stable revenue growth but a significant drop in net income. The company's strategic initiatives, including leadership changes and operational adjustments, are aimed at bolstering future growth and profitability. Investors and stakeholders will be watching closely to see how these strategies unfold in the coming quarters.
Explore the complete 8-K earnings release (here) from Driven Brands Holdings Inc for further details.
This article first appeared on GuruFocus.
