David: Maybe we could start on the top line. You had same-store sales super strong, about 8%. Do you tell us where the outperformance came in the quarter, whether company or franchise or geographical? And then as you went through the quarter, do you see any pockets of the country or any indications of demand softening, maybe where spending on gas makes up a higher proportion of discretionary spend? Have you seen anything like that as you move through the quarter and so far into early May?
Lori: Thanks, David. Yeah, we had really, really strong same-store sales growth at 8.2%, and as I mentioned, it did exceed our expectations. About two-thirds of that came from ticket, with actually all things contributing healthy amounts on the ticket side. Net pricing was good. premiumization and NOCR penetration all positive. There were some pricing moves that happened in the quarter for our franchisees, and that was not expected. Some of that tied to the forward-looking cost increases on lubricants. So some of that would have been higher than what we would have expected. And then on the transaction side, which made up the remainder, really good growth across the network. So when we look across all the metrics, all geographies, there's always puts and takes, but some of that is given where lapping is happening. So for example, California transaction growth was really strong because we were lapping some California wildfires. Some of the other systems had more new stores contributing to the transaction growth. Some of those things we know, just the outperformance sort of happened across the board with really the only notable thing being some of the pricing changes on the franchisee, which were modest overall. So really good on that. In terms of demand, we continue to look for trade down and deferrals and we do not see it. The customer demand for preventive maintenance is very resilient. So we're not seeing that happen. If you look at history, uh, going back to COVID, you know, gas prices. Can have an impact on miles driven, but it takes a long time to change consumers day-to-day behavior. Um, and so we, we, we don't see any impacts of that and we don't expect them. Now, if, if the middle East conflict were incredibly protracted, then we may see a little bit, but even in COVID where miles driven was down considerably. There's a habitual nature of preventative maintenance, particularly around key driving patterns. So we're not expecting to have any significant impact.
David: Very thorough. Thanks for all that. And then just a follow-up on the oil pricing and the impact on your cost of goods. Is there a way to quantify the expected impact you're looking for in Q3 and Q4 and And understanding there's a bit of a lag until your price increases catch up to that. How should we think about the offsets and particularly gross margin rate? Is that something you could hold as you move pricing throughout the system and onto the consumer at some point?
Kevin: Yeah, sure. I'll address that. So first, as Lori indicated, we didn't see any cost pressure in Q2. As we've moved into Q3, base oil indexes have moved, and we're starting to see the impact of that in product cost. As a reminder, we tend to have about a month or so worth of inventory on hand, so it will take a little bit of time for that to flow through on a complete basis, but we do expect it to flow through, and we also expect some of the cost increases to continue. To mitigate that, we have implemented price increases to cover those cost increases on a dollar basis. Most of our franchise partners have done the same or are in the process of doing the same. So we feel like we will fully cover any cost impacts. In terms of overall margin recovery, we would expect that the margin rate to be modestly impacted based upon the cost that's rolling through. But to put it in perspective, for us, first of all, we pass through on pretty much a dollar-for-dollar basis increased cost to our franchise partners for the product that we sell them. So that's more than half of the volume that we would purchase in a year. Second part is you look at lubricant or overall product as a percent of COGS, it's 20%, 25%. And the lubricant is by far the largest piece of that. Rule of thumb for us is if base oil goes up a dollar a gallon, we need to raise price 50 to 60 cents per oil change to cover that. So it's not a huge impact given that we and the franchise partners are north of $100 per ticket today. And so, again, it's not a huge impact, but it is something that we have to be proactive about, and we are being proactive with it to make sure that we do maintain dollar profit. The last piece of that will be waste oil. We do get paid for waste oil. Typically, we see waste oil move more or less in line with crude. There can be a lag. We didn't see any movement in waste oil in Q2. We have seen very modest movement in waste oil that we sell so far in Q3, but that is a partial offset to any kind of cost increase that we see around base oil.
David: Very good. Thank you both.
Operator: Your next question is from Simeon Goodman with Morgan Stanley. Please go ahead.
Simeon Goodman: Hey, good morning, everyone. Hey, I want to ask about Breeze for a second. Can you talk about milestones, integration, you know, anything good or anything less than good?
Lori: Thanks, Simeon. Yeah, our integration efforts are progressing well. We're pleased with the performance of Breeze, as both Kevin and I talked about in our prepared remarks. We delivered some of the SG&A synergies earlier than planned. So as we brought and integrated our corporate support teams, we were expecting to have a good fit between the teams. And we had some open roles, which we were able to not fill with outside hires and instead use the Breeze talent. So those were some of the things that we had hoped but hadn't exactly planned for. And then the team has worked really hard across all the procurement contracts to look for opportunities. Those are things that, you know, when we did the planning, we did not have the detail. And the team has worked really quickly to deliver some procurement savings earlier than what we would have expected. So all of those are really great. Our focus, you know, we're still only four or five months into this process, which we know will be a multi-year integration effort. And our focus really is on operational stability of the stores, making sure that we retain the talent in the stores, particularly as the FTC required some divestitures in and around the stores we maintained. So that's been a big focus of our team, making sure that we get out and talk about our plans for the business and for the people in that business so they get excited about staying on with Valvoline. And then we've completely integrated and aligned all the support teams and the management team members, you know, making sure that our financial reporting line cadence, you know, that we have eyes on and more detailed understanding of their business. So I think it's the integration effort is going very well and the business is performing very well. The Breeze team did a nice job managing store operating expenses in this quarter. and delivered well against their plan.
Simeon Goodman: And a follow-up on the demand and maybe the macro, it looks like your spread versus at least one of the public peers that we can track widen. Can you talk about market share in the quarter? And then if demand slows because of price of oil, that's just deferral, right? I mean, that's business that just has to come back unless miles driven takes a step down. But I would assume you're looking at this backdrop as more temporal than structural.
Lori: Yeah, when you look at market share, Simeon, to your first question, we definitely grew share across our business. Even when you take the impact of Breeze out of the numbers, which obviously was a share capture, we still had really strong growth across our system. not just in same store sales, but also the new store contribution. So 25% growth overall with a healthy mix coming from the business that we had, not including Breeze, just shows you the power of our proposition and our real estate placement and execution. So feel really good about that. In terms of deferral, you're exactly right. Miles driven and more timing interval. As I always like to remind people, when you're going to take a long car drive, people want peace of mind. And given the complexity of the vehicles today, they want somebody with eyes on, hands on their vehicle just to do safety checks. And in our proposition of Quick, Easy, Trusted, it's also thorough. We do a comprehensive safety check And oftentimes people will go ahead and get their oil changed at the same time, even if they're not exactly due because they're timing it with a road trip with their family or a significant drive for other reasons. So when we look at drive interval, there's very little deferral on drive interval and our miles driven is fairly consistent across the network. Again, it takes a protracted duration of high gas prices to start to impact miles driven. People can't change their daily habits and routines that quickly, or it's done very much on the margin. You also have trade-down activities of people choosing not to fly instead to drive. That all bodes well for our business.
Simeon Goodman: Okay, thanks. Nice job. Good luck.
Operator: Thanks. Your next question is from Mark Jordan with Goldman Sachs. Please go ahead.
Mark Jordan: Hey, congrats on that great quarter, everyone. Thanks for taking my question. I'm just wondering if you can talk a little bit about same-source sales trends, how they've progressed throughout the quarter, and maybe, you know, what kind of momentum we're seeing thus far during 3Q. Because I think, you know, if we take the updated guidance and couple that with the fact that, you know, two-thirds of the comp and the 2Q were driven by ticket, you know, kind of implies things slow down a little bit in 3Q. So just any commentary you can provide there.
Lori: Sure, I'll cover Q2 and then I'll ask Kevin to talk about how Q3 has started. You know, the comps overall, there were some puts and takes by month in the quarter. We talked about January in our last earnings call. We ended that month fairly light because there was weather in the last week that pushed demand into February. We talked about the fact that we expected to get that volume back. I think we did. February was very strong given the January push, but it was also strong because last year in February is when we had weather, which pushed volume to March. So we had kind of a double whammy really driving volume in February. And our teams across franchise and company did a great job responding and ensuring that we had labor in the stores to deliver on that demand. And then March, we saw good growth, but it was more modest. given the comp from last year's Fed push to March, we expected a lower comp on the transaction side for March. And we saw that, but still really good growth across the quarter when you take out some of those puts and takes.
Kevin: And Mark, looking at Q3, we're still early, but we do have a full month in plus a week in May. And we're seeing no change in behavior. We're seeing no change in how the business is performing. April was a good month to start the quarter. Net sales and same-store sales growth were both solid. Consumer behavior remained very consistent with what we've been seeing. NOCR is performing pretty much as it has been as well. So we're not seeing any trade-down or deferral on really anything in our customer base. As we think about the full year, we're really pleased with how the first half landed. Company and franchise performed really well. Breeze is performing ahead of expectations as well. So we've got good momentum going into the remainder of the year. We did raise the guide, as indicated. Same store sales growth, profit metrics. That reflects the strong first half we had. But just to be transparent, we're still being a bit measured as we consider the uncertainties that exist in the back half with the Middle East conflict. And nobody knows what the duration of that's going to be or the overall impact. And so we do continue to be measured. That said, we remain incredibly focused on delivering on the financial commitments that we discussed at the December investor update. And thus far, I think we're doing a good job of that. As we think about the rest of the year, we do typically see operating leverage across our store base in the second half of the year. We'd expect to see that this year as well. More specifically, we should see some labor leverage for the full year, but that's going to be a bit muted for two reasons. Number one, we had some big wins last year, and that's hard to comp. Also, breeze is a negative impact to margin, albeit less than we expected so far, and we expect that to continue. So that's really a lot of what we're thinking about when we think about the overall guide and the second half of the year.
Mark Jordan: Okay, perfect. Thank you very much for that. And then just one last one, if I could, you know, the competitive landscape, it's changed a little bit here, I think, in recent months with one of your larger competitors announcing a sale. You know, I guess with that, do you expect any changes to the competitive environment, either intensity or maybe impacts to your white space projections?
Lori: Yeah, no, I, I think our industry is still incredibly fragmented and we haven't, we haven't seen, nor do we expect at least in the near term to see any material changes in competitive environment. Um, obviously with, um, there's a lot of distraction in, in our category. Um, but I do think that we compete against the players that exist today and, um, And we perform very well. So when you look at our stores proximate to the next two largest players, we've been competing against these brands for a long time. We continue to add stores in markets where we compete against these brands. We deliver, you know, we're delivering very good returns, still maintaining mid teen or higher returns on invested capital in the stores that we build. And our franchisees are still building. So it's unclear how new ownership and some of the turmoil is going to impact or change, but we're confident in the strength of our business model, our customer proposition, our marketing execution, and just our overall store execution across the network.
Mark Jordan: Perfect. Thank you very much.
Operator: Your next question is from Chris O'Call with Stifel. Please go ahead.
Chris O'Call: Thanks, and congrats on the great report. Lori, could you elaborate a bit more on the risk of lubricant shortages?
Lori: Yeah, I'll do a little bit at a high level, and Kevin, you can add on to it. The lubricants that we use in our business are blended from a number of different base oils. Our supplier who develops that is always looking on its formulation to meet the OEM specs. And so this is something that they're always looking at in terms of managing supply and demand across the base of products that they produce. When you look at the Middle East conflict, it's really base oil threes. that tend to be or are potentially being impacted. And we're working very proactively as our supplier is to make sure that we mitigate any risk. But that that is something that will depend on how long the conflict continues. But at least as it relates to the guidance that we've updated, we've we believe we've been very measured to outline more of the bottom end would would have would have that taken into account to the extent we see any risk.
Kevin: Yeah, I think Lori said it really well, but we've got very adequate supply today and for the foreseeable future. And it really will be about the duration of the conflict. But again, in very close contact with our supplier on this and they get it and are doing everything they can to ensure that we remain and continue to remain supplied.
Chris O'Call: Okay. And then, Kevin, I had a question on the guidance. The comp range was raised meaningfully, but the full-year revenue range wasn't changed. I was hoping maybe you could just elaborate on what else changed and the underlying assumptions. And then I wanted to clarify, the EBITDA range was also increased on the same revenue range Is that because Breeze margin is better than initially expected?
Kevin: So Breeze is performing better than initially expected, and we would expect that to continue based on how they're executing. So that does certainly play some part in it. As we look at the overall revenue range, I would say at this point, We were comfortable with the range, which is why we didn't change it. I would say that we are trending above the midpoint. I think another point worth making here is depending on how much price movement we need to do, there could be a need to change that range down the road. But we're comfortable with where it is right now and feel like there's room in there based on our current forecast of the business.
Chris O'Call: Okay, great. Thanks.
Kevin: Sure.
Operator: Your next question is from Steve Shamesh with RBC Capital Markets. Please go ahead.
Steve Shamesh: Good morning, and thanks for taking the question. Nice result. Just a follow-up on cost inflation and pricing and kind of where that pricing has gone into the market, company-operated versus franchise. And then just thinking about... Have you priced to where you think inflation is going to go or based on what you've seen in the market today? And could we see additional pricing throughout the year?
Lori: Yeah, great question. So as we mentioned, we started to see our cost forecast for lubricants go up for the third quarter. And therefore, on the company basis, we did take some pricing actions within this third quarter to mitigate. We are trying to stay measured with that to make sure that we cover the cost increases, but we're also putting those into the market in an appropriate way, much like we do our pricing all the time. So we've been running pricing tests and some of this pricing we feel very comfortable and confident in the customer elasticity benefit. or net benefit that we would receive. So we feel very good about the company side. Our franchisees, not all of them have taken pricing action. Some took some pricing action already in the second quarter. Some are still reviewing. Some have decided or are in the middle of deciding what they will do in the month of May. So we're really in a transition phase as we're looking at cost increase, wanting to make sure that we're appropriately pricing to pass that through to the consumer where we can't mitigate it otherwise.
Steve Shamesh: Understood. Thank you for the color. And then just to follow up, I mean, presumably as price goes into the market, your list price contribution to same store sales should increase as well. So I guess just as we think about the contribution of traffic versus ticket for the back half of the year, Should it be a little bit more weighted towards ticket or do you expect it to be balanced with what we saw in the first half?
Kevin: Yeah, it most likely will be a bit more weighted towards ticket. I think the other piece of the equation, though, is especially in the non-Breeze part of the business, we do tend to have a pretty high transaction level in the second half of the year compared to the first half of the year just due to the seasonality of the business. So we would expect that transactions will also remain a meaningful contributor in the back half of the year. But I think the way the math will work is we will see incremental improvement to the comp more on the ticket side.
Steve Shamesh: Understood. Thank you very much and best of luck moving forward.
Kevin: Thank you.
Operator: Your next question is from Scott Stember with Roth Capital. Please go ahead.
Scott Stember: Well, and congrats on the very strong results.
Steven Zaccone: Thanks.
Scott Stember: Thank you. I'm not sure if you mentioned this in the call already, but could you talk about whether there was any meaningful difference in same store performance versus franchisees versus company owned stores?
Lori: Yeah, I did mention this, but I'll go ahead and cover it again. Overall, same store sales across the network of 8.2% was really strong. The franchise stores did outperform company relative to the average. That was higher driven primarily by transaction growth. There were puts and takes on the ticket, but ticket was largely the same. So the majority was coming from transaction growth. And there are a number of different factors. I mentioned one is a new store contribution. We had a couple of our franchise system, fairly largeable ones that had more new builds in there coming into their comp than they would have had a year ago. Another system is lapping weather with the wildfires in California. And so there are different puts and takes that drive some of that transaction growth that we know and can point to. But overall, when you step back and you look at company store performance and franchise store performance, averaging out to 8.2%, it's meaningful. And the comp was strong on both. So we're really pleased with where Q2 landed.
Scott Stember: Got it. And could you talk about how Fleet did in the quarter? Any meaningful improvements over what we've been seeing over the last few quarters?
Kevin: Fleet continues to perform very consistently across the board, and we would expect that to continue. Just as a reminder, fleet continues to make up less than 10% of our system-wide sales, but growing at a very rapid rate. We have a lot of room to run in the fleet business, both on the company and the franchise side. We have resources devoted to those customers to not only serve them, but also to continue to build that business, again, both for us and our franchise partners. And we're very bullish on not only where that is, but where we expect it to go.
Lori: Yeah, when we look at fleet growth, when we look at fleet growth, sorry, just to chime in there a little bit, there was a little bit slightly higher fleet contribution on the franchise side, the same store sales and company. It was small but meaningful on its base. I think the other thing that's happened that we're really pleased about is our last large franchise system has just decided to move their fleet business to be managed in our managed sales group, which we do on behalf of all of the other large franchisees. But this was the last one, which will allow us to really go after meaningful business across the nation when you look at key regions. We're really excited about the opportunity to grow fleet. There will likely be meaningful fleet growth on the franchise side, just because we've started to focus on that on behalf of our franchisees more recently.
Scott Stember: That's great. That's all I have. Thank you so much.
Operator: Your next question is from Peter Keith with Piper Sandler. Please go ahead.
Peter Keith: Good morning, everyone. Great results. With the guidance range, I'm curious if you've touched the back half of the year. The guidance seems to imply that it would step down in the comp trend despite the continued momentum. Certainly can understand being conservative, but maybe just help us understand the guidance raises it mostly flowing through what's happened in the first half, and has there been any changes to the second half?
Kevin: Again, we are being measured in the second half in terms of the overall guide. You're right, the second half guide remains largely unchanged. As we started off strong in Q3, we feel very, very good about where we are, the momentum of the business, and how it's performing. But again, we did want to be measured based on the things that we don't know and that we can't control. And as we get through Q3, we'll take a fresh look at it again. And if we need to adjust, we will. But you are correct. The second half is largely unchanged from where we started.
Peter Keith: Okay, that's very helpful. And then for Lori, I'm always curious around the efficiencies you're getting from moving your tech architecture to the cloud. And you've talked in the past around
Lori: improved marketing analytics is there anything you could update us on that front where you've made some recent progress yes we we continue to look at our um our net pricing and and the efficiency of our discounting activity and i would say that we've made a lot of progress and that as As we continue to grow Ticket, we're managing the discount levels very effectively. We've been actually able to pilot some different offers in a very targeted way to figure out if there are things we want to do more broadly. Probably nothing too early to share the impact. Some of the things that we have are in our plan. Some of them would be upsides to the plan, which obviously we're always working to deliver. We're very early in the shift of some of our budget from local media spend and national media spend. That's driving our cost per impression down or increasing the number of impressions for the spend that we're using. And we're seeing increased organic traffic to our brand assets, which obviously lowers our customer acquisition costs. So overall, probably too early to share some of the metrics, but we're seeing some very promising results of the investments that we've made, both to move our marketing data and assets into the cloud, but also in the early stages, very early stages of the shift to more of the national media spend.
Peter Keith: Very helpful. Thank you, and good luck.
Operator: Thanks. Your next question is from Steven Zaccone with Citi. Please go ahead.
Steven Zaccone: Great. Good morning. Thanks very much for taking my question. Congrats on the strong results. Most of my questions have been answered, so I wanted to follow up on a couple of model things. Let's talk about gross margin for the second half of the year. So you talked about QQ being up 40 bps, X the depreciation. How should we think about the second half? Because you'll still have breeze being dilutive, and then sounds like labor efficiencies will kind of be a bad guy. So just can you talk about second half gross margin expectations?
Kevin: Yes. See, we would expect gross margin in the second half to improve as it normally does, given the given that we do tend to have higher volume in the second half with summer drive season and just general seasonality in the business on an overall basis for, call it the non-breeze part of the business. And we fully expect that to continue. On the labor piece of the equation, we were really, really strong on labor leverage in the second half last year. And so we don't expect a lot of improvement on the labor side, but We would expect some nominal improvement there, partially offset by Breeze, because just as a reminder, they do have lower volume stores, and so their labor as a percent of sales does run higher than ours. It's one of the advantages that we'll gain as we build momentum in that system. But on an overall basis, we'd expect to get a bit of leverage from most store expenses, again, just through the throughput savings. that we'll see in the second half. And while you didn't ask the question, I'll also say we would expect to see continued SG&A leverage in the second half, again, as that is a stronger part of the year for us.
Steven Zaccone: Okay. When you say improved, do you mean sequentially gross margin rate, not necessarily year on year?
Kevin: That's right. And part of that is due to the fact that just to clarify, remember, we do have breeze included in the equation, and that is a bit of a margin headwind, much less in Q2 than we expected. And we would expect it to be less for the full year than where we thought it was going to be. But it will be directionally a small headwind margin in the second half as well.
Lori: And part of that is because when you look at the volume in our stores and the way that it ramps during drive season, for much of the country, it's less so in states like California, though there is some. And when you look at their volume per store, just the amount of leverage that we'll get, because it will take time to drive that demand curve on the breeze sites.
Steven Zaccone: Okay, understood. And then the other follow-up I had is, I may have this wrong, but the original thinking for BREEZE dilution was about 100 basis points to EBITDA. One, was that right? And two, what should we be thinking about as the dilution from BREEZE on an EBITDA basis?
Kevin: Yeah, that was right. We expected about 100 basis points of overall EBITDA margin dilution. We didn't really talk about the gross profit piece of that, but it was much less in Q2 than 100 basis points. And that said, we did have synergy capture that was earlier than expected. So on an overall basis, it will be less than 100 basis points for the full year. not really prepared to disclose exactly what we think it's going to be, but it will be less than 100 basis points.
Steven Zaccone: Okay. Thanks so much for that detail. Best of luck in the back house. Of course. Thanks.
Operator: Your next question is from David Lance with Wells Fargo. Please go ahead. Hi.
David Lance: Good morning, and thanks for taking my questions. On your expectations for second half SG&A leverage, curious if you can parse out how we should think through some of the moving pieces within advertising, payroll, and G&A.
Kevin: Sure. Advertising as a percent of sales will be fairly consistent. Sales will be higher. Advertising will be higher in the second half as it normally is. But on a percent of sales basis, it doesn't change very much typically. may move around a little bit on a month-to-month basis, but for a quarter of the full year, it's pretty consistent. As far as the rest of SG&A goes, as we think about the full year, we'll talk about Q2 first. We had about 60, 70 basis points of leverage, and I think most of the big tech investments are behind us. We've lapped that, and we're seeing that come to fruition, but One of the things we're really pleased with is that the improvement is really coming across a broad range of categories, which is how it should happen. So we're not seeing outsized impact from any one area like labor or what have you. All the big areas are improving a bit, and we would expect that to continue. There will be a natural amount of that, again, in the second half because it's busier for us. We'll see more sales and The labor and other costs to support those sales really won't change very much. And so we should naturally see leverage, higher leverage in the back half. That said, we are also very focused on making the business more efficient every day. We're looking at ways to do more with less, to employ technology in new and better ways. and to generate as many ideas as possible to continue to create and build SG&A leverage going forward.
David Lance: Got it. That's helpful. And then could you also talk about the cadence of new unit openings in the second half and provide an update around new unit economics as well?
Lori: Sure. I'll talk about the new unit profile of openings, and Kevin can talk about capital. We obviously we added 31 stores to our network, 29 netting out the two closures. The new units continue to wait to the back half. It's typical given the geographies that we serve and the weather patterns of when construction and conversion can happen. We actually had 14 openings in April, nine of which were franchised. So again, we continue to feel really good about the health of our pipeline. both on the company and the franchise side. That includes both ground-up builds and independent QuickLube acquisitions. So overall, you can expect to see a weighting of unit openings on the back half, particularly on the franchise side.
Kevin: As we think about unit economics, we and our franchise partners have been very focused on reducing the amount of capital that it takes to build a ground-up store, as well as the capital required to convert an acquired store to an oil change. And the team's been pretty successful with that, bringing that cost down, call it 10%, 15%, with line of sight to do another 10% to 15% over the course of time. It'll take some time for that bill cost to roll through, especially with ground-ups, because there is a there is a certain amount of time it takes to open one of those from start to finish. That said, as we look at unit economics, it really hasn't changed. From an IRR perspective, we see mid to high teens. That's why we continue to invest in new units. It's why our franchise partners have increased their investment in new units and made commitments around that with new development agreements. So we really see no change there. And we will continue to invest in new units for the foreseeable future. Thank you. Sure.
Operator: Your next question is from Brett Jordan with Jefferies. Please go ahead.
Brett Jordan: Good morning, guys. In the non-oil change revenue mix, did you see anything of note there, whether customers sort of strengths or weaknesses in that category?
Kevin: No, NOCR was a good contributor in the quarter. And as we look at the trending of NOCR, I think we've said this in the past, NOCR tends to run around 25% of ticket, give or take. As we looked at that in Q1 versus Q2, April versus Q2 and Q1, etc., It remains very consistent both across the company and the franchise partners. So there's been no change there thus far. Okay.
Brett Jordan: And then I guess when you think about past oil volatility, as you take prices up, and obviously they might come down if we resolve the Middle East, can you capture margin as you hold price for a bid against the lower input cost, or does it ratchet down pretty quickly with competition?
Kevin: Now, Lori can correct me if I'm wrong, but I don't think we've ever lowered list price on our oil changes. And that's just an industry standard, I would say. So there is potential opportunity for some margin recapture going forward as a result of that if we do see declines in the cost of lubricants. Great. Thank you.
Operator: Your next question is from Thomas Wendler with Steffens. Please go ahead.
Thomas Wendler: Hey, good morning, everyone. Great quarter. Most of my questions have been answered. Maybe one more quick one from me. With the Breeze acquisition, I think there was an expectation for maybe a rollout of additional services there at the Breeze locations. Can you give us an update there?
Lori: Yeah, we're in the process of looking at the menu and understanding what equipment would be required to expand. The menu of offering between an oil changers location and a Valvoline instant oil change is fairly consistent. Obviously, the lubricant offering has some differences that we're working through, and then they don't offer tire rotations. And so we're working through you know, what equipment, what would be required in training as we look at that opportunity and the oil changers. There are pretty small other changes here and there, but still an opportunity for upside, which is factored into our overall growth expectation for Breeze.
Thomas Wendler: Perfect. I appreciate the color.
Operator: There are no further questions at this time. This concludes today's call. Thank you for attending and you may now disconnect.
