VVV: Takeaways From Time With Management

研报英文原文证据摘录

VVV: Takeaways From Time With Management

nsistent with the March 2026 461.8A 503.8A 543.1E 562.1E

quarter. 2027 558.6E 576.9E 614.1E 623.3E

EBITDA, Adj

Pricing to offset base oil inflation: We'd argue that mgmt largely eased 2025 102.8A 104.4A 129.5A 130.1A

concerns here on the F2Q earnings call, but the team further confirmed 2026 117.4A 133.6A 154.5E 156.0E 2027 142.4E 153.6E 175.2E 173.5E

that both they and franchisees have put sufficient price in the market

to offset base oil inflation. As a reminder, less than ~20% of operating All values in USD unless otherwise noted. Priced as of prior trading day's market close, EST (unless otherwise noted).

costs are tied to oil-based products and every $1 of base oil inflation

raises VVV's costs by $0.50. We believe that base oil prices have increased

$3 to date, which is a large increase on a percentage basis, but largely

immaterial from a cost perspective - especially given VVV's average ticket

is ~$100 and service intervals are ~6 months. It's also important to keep

in mind that VVV has 2 natural hedges: the sale of oil to franchisees and

waste oil to collection companies, both at prices tied to the base oil index.

Lastly, it's worth flagging that quick lube has historically been a price-

rational industry where list prices are typically not walked back when costs

normalize, meaning today's pricing actions could prove to be a meaningful

margin tailwind if and when costs eventually stabilize.

No forseeable issues from supply constraints: Mgmt largely dismissed

investor fears around supply constraints, suggesting that they've seen no

impact to date and feel well positioned moving forward giving their size/

scale and supplier relationship. Constraint concerns stem from: 1) Strikes