Ashland Consumer Markets, Ashland Inc.’s lubricants business (Valvoline), reported solid results for the fiscal first quarter ended Dec. 31, 2013. Operating income rose 13.6 percent to $75 million, as sales increased 1 percent to $486 million.
Volume increased sales by $13 million, or 3 percent, as lubricant gallons sold increased 4 percent to 38.60 million gallons, with particular strength in the international business, where volumes rose 10 percent. Lower product pricing decreased sales by $8 million, or 2 percent, while changes in product mix increased sales by $3 million and unfavorable currency exchange decreased sales by $3 million.
Company-owned same-store sales at Valvoline Instant Oil Change shops grew 4.7 percent year-over-year, driven by increased oil changes per day, average ticket price and total number of oil changes. The DIY business reported continued improvement in product mix, with premium lubricant sales increasing 5 percent versus the prior year.
Management expects overall Valvoline volumes to increase in the current quarter in line with normal seasonality.
Consumer Markets delivers premium-branded automotive, commercial and industrial lubricants, as well as automotive chemicals and car-care products. It operates and franchises roughly 900 Valvoline Instant Oil Change centers in the United States. It markets Valvoline lubricants and automotive chemicals; MaxLife lubricants for cars with higher-mileage engines; NextGen motor oil, created with 50-percent recycled oil; SynPower synthetic motor oil; Eagle One and Car Brite automotive appearance products; and Zerex antifreeze.
The Valvoline Instant Oil Change business accounted for roughly 17 percent of Consumer Markets’ sales in 2013. Sales to the DIFM installer market accounted for approximately 23 percent of unit sales in 2013. Sales to the DIY market and international business rounded out Consumer Markets’ sales in 2013 with 30-percent stakes each.
A closer look shows that antifreeze sales accounted for 5 percent of Consumer Markets’ sales in 2013. Filters came in 2 percent and chemicals at 8 percent. — Marc Vincent
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