Driven Brands Holdings Inc. (NASDAQ:DRVN) Q1 2024 Earnings Call Transcript

Danny Rivera: Sure, Peter. This is Danny. Look, I think what you said is pretty spot on. I mean, if we look at the PC&G segment, the Paint and Collision side of that segment continue to do quite well. Those are franchise businesses, mature business. They’re very steady, delivering north of 50% margins and they continue to do so. The Glass part of that business, as Jonathan indicated in his comments, we’re looking at that as a kind of mid- to long-term play for us. Just got through the integration. We’re very focused on growth, both bottom and top line, like we mentioned. And we’re just in early innings, and we’re excited about the future there.

Peter Keith: Okay. I guess that won’t answer my question, I guess, is this low — you don’t want to guide comp for the segments, but are we in a low single-digit comp environment now for this area of the business?

Jonathan Fitzpatrick: Pete, I think we’re reiterating our full same-store sales guidance for the year, which Gary mentioned, which is a range of 3% to 5% and we’re very comfortable with that at a full driven level and again, we don’t guide on a segment level, but we’re reiterating 3% to 5% for the full year.

Peter Keith: All right. Let’s pivot to the positive segment. So maintenance I guess what intrigued me there is the EBITDA improvement. Year-on-year margins expanded nicely, even the EBITDA growth accelerated quite a bit, and you did so off of a very similar comp to Q4 to be operationally, help unpack that for us? What’s driving the profitability improvement there?

Jonathan Fitzpatrick: Yes. So I think, Mo Khalid and the team are doing an amazing job kind of on 3 fronts. So I’d say, number one, just ongoing expense management. So that’s one obvious positive. The second one is improving our P mix. So specifically, and we’ve talked about this in the past. The teams are really leaning into our coolant services, and that becomes a more important part, let’s just say, of our product mix and that’s a very profitable service for us. So that’s going to grow margins over time. And then the last thing is just looking naturally as the business gets more heavily weighted to be a franchise business as we continue to open kind of two third of our openings will be franchise based, that will naturally lead to an increase in margins as well.

Peter Keith: Okay, sounds good, thank you.

Operator: There are no further questions at this time. That concludes today’s conference call. Thank you for your participation. You may now disconnect.