Driven Brands NASDAQ: DRVN reported higher first-quarter 2026 sales and revenue while reiterating its full-year outlook, as management pointed to continued strength at Take 5 Oil Change, improved franchise segment results and progress reducing leverage.
President and CEO Danny Rivera said the quarter was “solid” as the company continued to execute what it calls its “growth and cash strategy.” Driven Brands grew system-wide sales 6%, revenue 8%, same-store sales 2% and adjusted EBITDA 2% in the quarter, with adjusted EBITDA margins of 21.5%.
The company ended the quarter with net leverage of 3.2x and said it remains on track to reach its 3x target by year-end. Rivera said reducing leverage remains the company’s top priority before management lays out a long-term capital allocation framework for investors.
Take 5 Remains the Growth Engine
Take 5 Oil Change continued to lead the company’s performance, posting its 23rd consecutive quarter of same-store sales growth. Rivera said the business grew system-wide sales 14%, revenue 10%, same-store sales 4.5% and adjusted EBITDA 14% in the quarter. Take 5’s adjusted EBITDA margin expanded 120 basis points year over year to 33.9%.
Rivera attributed Take 5’s performance to its “stay-in-your-car” service model, operational execution, premiumization, attachment rates and marketing discipline. The company said Take 5 has about 1,400 locations today and sees a path to more than 2,500 locations over time.
However, management also acknowledged some consumer pressure. Rivera said Driven is seeing moderation in traffic among newer Take 5 customers and more value-oriented customers, particularly households earning less than $50,000 annually. He said the company’s core customer base remains resilient, with average check, premium mix and attachment rates continuing to perform well.
In response to an analyst question, Rivera said the traffic moderation appears to be concentrated in those two customer groups and is showing up more as churn than as customers stretching oil change intervals. He said oil change intervals have remained stable.
Franchise Brands and Auto Glass Now Post Positive Same-Store Sales
Driven’s Franchise Brands segment generated 60% adjusted EBITDA margins and grew same-store sales 1% in the first quarter. Rivera said results were led by Meineke, while segment same-store sales improved sequentially from the fourth quarter. Management expects Franchise Brands to continue generating strong margins and cash flow in 2026, though same-store sales are expected to moderate from first-quarter levels.
During the question-and-answer portion of the call, Rivera said Maaco remained soft after weakness late last year, though he noted some improvement on the retail side. Meineke, by contrast, has remained strong, with momentum carrying into the first quarter. Collision improved sequentially from the fourth quarter, and Rivera said Driven continues to outperform the broader collision industry by 100 to 300 basis points.
Rivera described 2026 for collision as a year of stabilization rather than a rebound. He said customer-pay work is a growing part of the business, and Maaco gives the company an option for customers who may choose not to use insurance for lighter collision repairs.
Auto Glass Now also posted growth in the quarter, with revenue up 6%, same-store sales up 7% and adjusted EBITDA up 12%. Margins expanded 40 basis points to 9.4%. Rivera said the company sees long-term opportunity through expanded carrier relationships, market share growth and operating scale.
Restatement Costs Weigh on Margins
Executive Vice President and Chief Financial Officer Mike Diamond said Driven is continuing work to remediate material weaknesses in internal control over financial reporting. He described the effort as a multi-quarter process but said the company has made “meaningful early progress” against remediation plans.
Diamond said first-quarter operating expenses rose $24.1 million year over year, driven in part by higher company-operated store expenses and $9.1 million in non-recurring restatement costs. Those restatement costs were below initial expectations because some work shifted from the first quarter into the second quarter. Driven still expects full-year non-recurring restatement costs of $35 million to $45 million.
Total revenue in the first quarter was $484.4 million, up 8.2% from a year earlier. Operating income increased $12.7 million to $67.4 million. Adjusted EBITDA rose 1.7% to $104.1 million, while adjusted EBITDA margin declined about 140 basis points to 21.5%. Diamond said that excluding restatement costs, adjusted EBITDA margin would have increased approximately 50 basis points.
Interest expense declined $12.8 million to $23.5 million, which Diamond attributed primarily to debt paydown. Net income from continuing operations was $23.8 million, adjusted net income from continuing operations was $49 million and adjusted diluted EPS was $0.30.
Guidance Reiterated, Q2 Moderation Expected
Driven reiterated its full-year 2026 outlook. The company expects:
- Revenue of $1.95 billion to $2.05 billion
- Adjusted EBITDA of $430 million to $460 million
- Adjusted diluted EPS of $1.15 to $1.25
- Same-store sales ranging from flat to up 2%
- Net store growth of 160 to 190 units
- Free cash flow of $125 million to $145 million
Diamond said Driven expects some moderation across its brands in the second quarter. Take 5 same-store sales growth is expected to be in the mid-3% range, representing about 10% on a two-year stack. Franchise Brands same-store sales are expected to moderate from the first quarter, reflecting uneven recovery at Maaco and in collision.
Restatement costs are expected to exceed $15 million in the second quarter due to a full three months of restatement work, including filings, work related to restated financials for the company’s whole business securitization, remediation of internal controls and legal costs. Diamond said those costs are non-recurring and do not reflect the underlying earnings power of the business.
On capital allocation, Diamond said the company remains focused on reaching its 3x leverage target. After that, he said Driven has several options, including investment in Take 5 growth and the possibility of returning cash to shareholders. He said there is no significant deferred capital spending the company needs to catch up on and noted that the company’s debt is fixed rate and “fairly low.”
Rivera also highlighted a new management hire, saying Bart LaCount has joined Driven Brands as chief marketing officer, a newly created role. Rivera said the company has centralized marketing leadership under LaCount to build a more integrated, data-driven and scalable marketing organization.
About Driven Brands NASDAQ: DRVN
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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