Driven Brands delivered a quarter that met and slightly exceeded Wall Street’s expectations, as reflected by a positive market reaction. Management credited the ongoing expansion of Take 5 Oil Change locations and strong customer loyalty as key growth drivers. CEO Danny Rivera emphasized the importance of consistent service and high Net Promoter Scores for Take 5, noting, “Our unique operating model paired with the passion and consistency of our team members and franchisees continues to deliver Net Promoter Scores in the high 70s.” Meanwhile, softness in the collision repair and Maaco segments weighed on overall results, with Rivera acknowledging continued discretionary spending pullback among lower-income consumers.
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Driven Brands (DRVN) Q2 CY2025 Highlights:
- Revenue: $551 million vs analyst estimates of $540.8 million (6.2% year-on-year growth, 1.9% beat)
- Adjusted EPS: $0.36 vs analyst estimates of $0.34 (7.2% beat)
- Adjusted EBITDA: $143.2 million vs analyst estimates of $142.6 million (26% margin, in line)
- The company reconfirmed its revenue guidance for the full year of $2.1 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $1.20 at the midpoint
- EBITDA guidance for the full year is $535 million at the midpoint, below analyst estimates of $538.1 million
- Operating Margin: 6.9%, down from 15.5% in the same quarter last year
- Locations: 4,849 at quarter end, up from 4,665 in the same quarter last year
- Same-Store Sales rose 1.7% year on year, in line with the same quarter last year
- Market Capitalization: $2.76 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Driven Brands’s Q2 Earnings Call
- Zach (Morgan Stanley) asked about the drivers behind Take 5’s comps and whether traffic or ticket size was the main contributor. CEO Daniel Rivera said both traffic and check were healthy, and highlighted non-oil revenue growth but does not disaggregate traffic versus ticket.
- Justin Kleber (Baird) questioned the sustainability of Take 5’s mid-30s margin as the segment grows. CFO Michael Diamond responded that mid-30s is realistic for the full year, with some variability expected due to new store openings and investments.
- Seth Sigman (Barclays) asked about the long-term potential for non-oil change revenue and margin implications. Rivera stated there is significant room to grow through new service introductions, with differential service being accretive to gross margins.
- Madison Callinan (Canaccord) sought clarity on ongoing collision industry softness and whether Driven Brands can continue growing through market share gains. Rivera confirmed industry-wide headwinds but said Driven Brands continues to gain share and is well-positioned for a future recovery.
- Peter Keith (Piper Sandler) inquired about EBITDA pressures and future growth drivers. Rivera cited the absence of PH Vitres in current results and expects sequential improvement, with guidance incorporating ongoing headwinds.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) continued expansion and customer adoption of new Take 5 services, (2) signs of stabilization or turnaround in the collision and Maaco segments, and (3) moderation in international car wash growth following recent weather and tough comparisons. Progress toward deleveraging and the ability to maintain margin discipline amid rising costs will also be important metrics to monitor.
Driven Brands currently trades at $16.80, down from $17 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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