Driven Brands (NASDAQ:DRVN) Issues Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Key Points

• Driven Brands beat quarterly estimates, reporting EPS of $0.29 versus the $0.26 consensus and revenue of $507.42 million versus $506.33 million expected. However, revenue fell 7.9% year over year and EPS declined from $0.36.
• Take 5 remained the primary growth driver, with 3.6% same-store sales growth, 13% systemwide sales growth and 50 net new locations. The company also improved its balance sheet, reducing net leverage to 3.1x and generating $44.7 million in quarterly free cash flow.
• Management reiterated full-year guidance but expects adjusted EBITDA toward the low end of its $430 million-$460 million range, citing pressure on lower-income consumers, higher oil-related costs and geopolitical uncertainty. Shares fell 11.3% to $12.96 following the results.

Driven Brands (NASDAQ:DRVN - Get Free Report) posted its earnings results on Thursday. The company reported $0.29 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.26 by $0.03, Briefing.com reports. Driven Brands had a return on equity of 25.70% and a net margin of 9.08%.The company had revenue of $507.42 million during the quarter, compared to analysts' expectations of $506.33 million. During the same quarter last year, the firm earned $0.36 earnings per share. The firm's quarterly revenue was down 7.9% compared to the same quarter last year.

Here are the key takeaways from Driven Brands' conference call:

• Take 5 continued to lead growth, posting 3.6% same-store sales growth, 13% systemwide sales growth, and its 24th consecutive quarter of positive comps. The company added 50 net locations and maintains an approximately 800-unit pipeline toward a long-term goal of more than 2,500 stores.
• Driven strengthened its balance sheet, ending the quarter at 3.1x net leverage and remaining on track to reach 3.0x by year-end. Second-quarter free cash flow rose to $44.7 million, while interest expense declined by $10.4 million year over year.
• Management cited continued pressure on lower-income consumers, higher oil-related input costs, and uncertainty from the Middle East conflict. The company expects these factors to weigh on sales in the second half, although it plans to use disciplined pricing and targeted promotions to offset some impact.
• Although full-year 2026 guidance was reiterated, management now expects adjusted EBITDA to be closer to the low end of its $430 million-$460 million range. Restatement costs are expected at the high end of the previously stated $35 million-$45 million range, with some costs shifting into the third quarter.
• Franchise Brands generated reliable cash flow with a 59% adjusted EBITDA margin, but Maaco remained pressured and collision repair showed only stabilization. Auto Glass Now reported 2.6% same-store sales growth, though its $3.5 million adjusted EBITDA was reduced by a $4 million out-of-period charge and management cautioned that quarterly performance will be uneven.

Driven Brands Stock Down 11.3%

DRVN traded down $1.65 on Thursday, reaching $12.96. The company's stock had a trading volume of 1,174,407 shares, compared to its average volume of 1,500,898. The company has a market capitalization of $2.14 billion, a price-to-earnings ratio of 11.57 and a beta of 0.95. Driven Brands has a fifty-two week low of $9.80 and a fifty-two week high of $19.74. The company has a quick ratio of 1.25, a current ratio of 1.38 and a debt-to-equity ratio of 2.08. The stock has a 50 day moving average of $14.04 and a two-hundred day moving average of $13.72.

Institutional Investors Weigh In On Driven Brands

Hedge funds and other institutional investors have recently bought and sold shares of the stock. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its holdings in shares of Driven Brands by 4.4% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 35,597 shares of the company's stock worth $610,000 after purchasing an additional 1,493 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its position in Driven Brands by 22.7% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 139,321 shares of the company's stock worth $2,388,000 after buying an additional 25,806 shares during the period. New York State Common Retirement Fund lifted its stake in Driven Brands by 10.0% in the second quarter. New York State Common Retirement Fund now owns 16,511 shares of the company's stock valued at $290,000 after buying an additional 1,500 shares during the last quarter. Arrowstreet Capital Limited Partnership boosted its holdings in shares of Driven Brands by 95.4% in the second quarter. Arrowstreet Capital Limited Partnership now owns 255,156 shares of the company's stock valued at $4,481,000 after acquiring an additional 124,556 shares during the period. Finally, EverSource Wealth Advisors LLC grew its position in shares of Driven Brands by 744.6% during the second quarter. EverSource Wealth Advisors LLC now owns 2,103 shares of the company's stock worth $37,000 after acquiring an additional 1,854 shares during the last quarter. 77.08% of the stock is currently owned by institutional investors and hedge funds.

Analyst Ratings Changes

Several analysts recently issued reports on the stock. Weiss Ratings upgraded shares of Driven Brands from a "sell (d+)" rating to a "hold (c-)" rating in a report on Tuesday, July 28th. Royal Bank Of Canada decreased their price objective on shares of Driven Brands from $18.00 to $17.00 and set an "outperform" rating on the stock in a report on Thursday, June 11th. The Goldman Sachs Group reiterated a "neutral" rating and issued a $14.75 target price on shares of Driven Brands in a report on Wednesday, May 20th. BTIG Research restated a "buy" rating and set a $17.00 price target on shares of Driven Brands in a research note on Friday, June 12th. Finally, Canaccord Genuity Group set a $18.00 price target on Driven Brands in a research report on Monday, June 8th. Two investment analysts have rated the stock with a Strong Buy rating, five have given a Buy rating and seven have given a Hold rating to the company's stock. Based on data from MarketBeat.com, Driven Brands currently has a consensus rating of "Moderate Buy" and an average price target of $17.18.

About Driven Brands

Driven Brands Holdings Inc NASDAQ: DRVN is a leading North American provider of automotive aftermarket services, operating through a network of franchised and company-owned locations. The company's platform encompasses a diverse portfolio of car care and maintenance brands, including Meineke Car Care Centers, Maaco Collision Repair & Auto Painting, Take 5 Oil Change, and Carstar Collision Repair. Driven Brands delivers a full range of services from routine maintenance and oil changes to collision repair, paint protection, and vehicle customization.

Headquartered in Charlotte, North Carolina, Driven Brands serves both individual consumers and commercial clients across the United States and Canada.

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