CHARLOTTE, N.C. - Shares of Driven Brands Holdings Inc. (NASDAQ: DRVN) fell 7.35% in premarket trading Thursday as the automotive services company reported fourth-quarter earnings that met analyst expectations but provided a weaker-than-expected outlook for fiscal year 2024.
For the fourth quarter, the company posted adjusted earnings per share (EPS) of $0.19, aligning with the consensus estimate. However, revenue fell short at $553.67 million, missing the analyst projection of $572.08 million. The company's revenue increased by 3% compared to the same quarter last year.
Looking ahead, Driven Brands anticipates adjusted EPS for fiscal year 2024 in the range of $0.88 to $1.00, which is below the consensus estimate of $1.11. The company also forecasts revenue for the same period to be between $2.35 billion and $2.45 billion, again falling short of the expected $2.52 billion consensus.
Jonathan Fitzpatrick, President and Chief Executive Officer, commented on the company's performance, stating, "We are happy to announce that we delivered on our updated 2023 outlook for all financial metrics, while also pivoting our strategy and adapting to the dynamic market."
He highlighted the strong execution in the Maintenance segment, particularly the Take 5 Oil Change business, and noted progress in the U.S. Glass and U.S. Car Wash businesses.
Despite the positive note from the CEO, the market's reaction was decidedly negative, with the stock dropping significantly following the earnings release and guidance announcement.
Investors may be concerned about the company's ability to maintain its growth trajectory in the face of the provided outlook, which suggests a more cautious stance for the upcoming fiscal year. Driven Brands' guidance indicates a focus on accelerating growth, reducing debt, and ensuring the right assets are in place to achieve both short- and long-term goals. However, the market's response suggests skepticism about the company's ability to meet these objectives in the current economic environment.
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