Driven Brands 2025 Q1 Earnings Beats Expectations as Net Income Grows 29%

Driven Brands (DRVN) reported its fiscal 2025 Q1 earnings on May 08th, 2025. The company surpassed Wall Street expectations, with quarterly earnings of $0.27 per share, beating the Zacks Consensus Estimate of $0.23 per share. This marks a significant earnings surprise of 17.39%. Driven Brands reaffirmed its full-year outlook, anticipating revenue to reach around $2.1 billion, with adjusted EPS guidance at $1.20 mid-point. The company's strategic divestiture of its U.S. car wash business further strengthens its financial position and highlights a commitment to debt reduction.

Revenue

Driven Brands saw an increase in total revenue by 7.1% to $516.16 million in 2025 Q1, compared to $481.99 million in 2024 Q1. Franchise royalties and fees contributed $44.71 million, while company-operated store sales accounted for $314.13 million. Independently-operated store sales added $66.64 million, with advertising contributions at $25.32 million. Lastly, supply and other revenue reached $65.36 million, culminating in a total net revenue of $516.16 million.

Earnings/Net Income

Driven Brands' EPS rose to $0.04 in 2025 Q1 from $0.03 in 2024 Q1, indicating continued growth. The company's net income increased by 29.2% to $5.51 million, compared to $4.26 million in the previous year. The improved EPS reflects positive financial performance.

Post-Earnings Price Action Review

The strategy of purchasing Driven Brands shares following a quarterly revenue drop and holding for 30 days has not yielded returns over the past five years. The strategy's return was 0.00%, falling short of the benchmark return of 92.56%. This resulted in an excess return of -92.56%, with the strategy's CAGR also at 0.00%. The Sharpe ratio and maximum drawdown were both 0.00%, indicating an absence of risk or return from this strategy. Despite the lack of returns from this strategy, Driven Brands shares have gained approximately 7.4% since the beginning of the year, outperforming the S&P 500's decline of -3.9%. Investors remain keen on the company's earnings outlook, which is a reliable measure to gauge future stock performance.

CEO Commentary

"We delivered another strong quarter, led by the sustained momentum of our Take 5 Oil Change business, which achieved its 19th consecutive quarter of same-store sales growth. Additionally, we successfully completed the sale of our U.S. car wash business in early April, primarily using the proceeds to reduce our debt. While the economic environment is fluid, our diversified portfolio, anchored by non-discretionary services, demonstrates resilience and positions us well for the long term. We are confident in our ability to deliver on our 2025 outlook and remain committed to paying down debt as we grow the business," said Jonathan Fitzpatrick, President and Chief Executive Officer.

Guidance

Driven Brands expects full-year revenue to be around $2.1 billion, with adjusted EPS guidance reaffirmed at $1.20 at the midpoint. The company projects adjusted EBITDA guidance for the full year to be $535 million at the midpoint, which is below analyst estimates of $542.3 million.

Additional News

In recent developments, Driven Brands announced a significant leadership change with Danny Rivera stepping into the role of CEO, while Jonathan Fitzpatrick transitions to Chair of the Board. This change underscores the company's commitment to strategic growth and leadership continuity. Additionally, Driven Brands completed the sale of its U.S. car wash business, a move aimed at strengthening its balance sheet and reducing debt. Furthermore, Driven Brands announced new segment reporting, highlighting Take 5 Oil Change as a standalone segment, reflecting its strength as a flagship growth driver. These updates demonstrate Driven Brands' focus on strategic positioning and operational excellence.