Valvoline Inc., headquartered in Lexington, Kentucky, is a global automotive and industrial solutions provider with a rich heritage dating back to 1866 when Dr. John Ellis founded the company. The company operates through two primary segments: Retail Services and Global Products. Retail Services encompasses the company-owned and franchised quick-lube network, ...Valvoline Inc., headquartered in Lexington, Kentucky, is a global automotive and industrial solutions provider with a rich heritage dating back to 1866 when Dr. John Ellis founded the company. The company operates through two primary segments: Retail Services and Global Products. Retail Services encompasses the company-owned and franchised quick-lube network, including Valvoline Instant Oil Change in the U.S. and Great Canadian Oil Change in Canada, offering preventive maintenance services such as oil changes, fluid replacements, and filter installations. Global Products focuses on manufacturing and distributing a broad portfolio of lubricants (for passenger vehicles, light-duty trucks, and heavy-duty machinery), antifreeze and coolants, brake fluids, power steering fluids, coatings, and filters. These products are sold to OEMs, automotive dealerships, independent repair shops, and through distributors worldwide. With nearly 1,600 service centers as of September 2021, Valvoline leverages its brand strength and innovation to deliver high-performance solutions. Financially, the company reported revenue of US$1.71 billion (2025) and has a market cap of approximately $4.5 billion. Key leaders include CEO Lori Flees, who drives strategic growth, and CFO Mary Meixelsperger. Valvoline is committed to sustainability and innovation, continuously evolving to meet changing customer needs and market demands. Its global footprint spans North America, Europe, Middle East, Africa, Asia-Pacific, and Latin America, demonstrating its position as a trusted partner in the automotive care industry.
Operator: Hello, everyone. Thank you for joining us, and welcome to Valvoline's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Elizabeth Clevinger, Investor Relations. Elizabeth, please go ahead.
Elizabeth Clevinger: Thank you. Good morning, and welcome to Valvoline's Third Quarter Fiscal 2026 Conference Call and Webcast. This morning, Valvoline released results for the third quarter ended June 30, 2026. This presentation should be viewed in conjunction with that earnings release, a copy of which is available on our Investor Relations website at investors.valvoline.com. Please note that these results are preliminary until we file our Form 10-Q with the Securities and Exchange Commission. On this morning's call is Lori Flees, our President and CEO; and Kevin Willis, our CFO. As shown in the accompanying presentation, any of our remarks today that are not statements of historical facts are forward-looking statements. These forward-looking statements are based on current assumptions as of the date of this presentation and are subject to certain risks and uncertainties that may cause actual results to differ materially from such statements. Valvoline assumes no obligation to update any forward-looking statements unless required by law. In this presentation and in our remarks, we will be discussing our results on an adjusted non-GAAP basis, unless otherwise noted. A reconciliation of our GAAP to adjusted non-GAAP results and a discussion of management's use of non-GAAP and key business measures is included in the presentation appendix. With that, I will turn it over to Lori.
Lori Flees: Thanks, Elizabeth, and thank you all for joining us this morning. We delivered another good quarter with sales and profit growth in line with our expectations. The team continues to manage the business effectively through the changing supply and macro environment. Our results demonstrate the strength, resilience and growth in our business. On the top line, system-wide store sales increased 19%, crossing the $1 billion mark for the first time in a quarter. System-wide same-store sales grew 8%. Across the system, we saw growth in both transactions and ticket, with ticket contributing more than 3/4 of the comp. All 3 components of ticket, net pricing, premiumization and NOCR service penetration contributed. Net price was the largest contributor, given the pricing actions that were taken. Similar to last quarter, franchise was above the system average. For the quarter, EBITDA grew faster than sales with SG&A leverage improving. Before Kevin talks through the financials, I want to spend a moment on the operating environment as it relates to supply. The closure of the Strait of Hormuz has disrupted the global oil supply chain. And specific to our category has constrained the supply of Group III base oil, a key component of full synthetic lubricants. We expect this industry-wide supply constraint to persist over …
