Key Highlights

  • DRVN shares fell 12.63% pre-market to $11.11 after a financial restatement notice.
  • Third-quarter Earnings Call and Form 10-Q were delayed during the review.
  • Full-year Adjusted EBITDA outlook lowered to $410 million to $430 million.

Driven Brands (NASDAQ:DRVN) shares fell 12.63% to $11.11 in pre-market today, down $1.61 from the prior close of $12.72, which followed a 2.58% gain on Monday. The company said its Audit Committee concluded there were material errors in financial statements for fiscal years 2023, 2024 and 2025 and in quarterly periods through June 27, 2026, and that those statements should not be relied upon.

Headquartered in Charlotte, North Carolina, Driven Brands is the largest automotive services company in North America, with more than 4,200 mostly franchised locations. Its brands include Take 5 Oil Change, Meineke, Maaco, CARSTAR, 1-800-Radiator and A/C and Auto Glass Now.

Fixed Asset Errors Prompt a Restatement With No Set Timeline

Management identified the errors while preparing for audits of its whole Business securitization subsidiaries. They fall into three categories: failure to timely write off fixed assets, primarily related to sale leaseback transactions; misclassification of fixed Assets within categories; and incorrect useful lives across certain categories. The chief financial officer said the adjustments to date have a negligible impact on Adjusted EBITDA.

There is no set timeline for completing the restatement. The company is delaying its third-quarter earnings call and will not file its Form 10-Q by the deadline, and it will limit communications to required public disclosures until then. It is also required to temporarily cease share repurchases until it becomes current with its reporting obligations.

Preliminary Third-Quarter Results and a Revised 2026 Outlook

On a preliminary, unaudited basis, third-quarter same store sales rose 2.0% for Driven Brands overall, 4.9% for Take 5, 0.5% for Franchise Brands and 6.5% for Auto Glass Now. Take 5 added 27 net units, while Franchise Brands had 34 fewer. The company held about $230 million of cash and net Debt of about $1.4 billion, reflecting repayment of about $485 million of long-term debt through the quarter. It bought about 315,000 shares for $3.8 million in the quarter.

The revised 2026 outlook calls for same store sales growth of 1.0% to 1.5%, compared with flat to 2% before. Adjusted EBITDA is now $410 million to $430 million, compared with $430 million to $460 million, and adjusted diluted EPS is $1.10 to $1.20, compared with $1.15 to $1.25. Revenue of $1.95 billion to $2.05 billion and free Cash Flow of $125 million to $145 million are unchanged. Take 5 same store sales growth is expected at 3.5% to 4.0%, with 155 or more Take 5 net units.

Restatement-related costs are expected to be at least $50 million in 2026, up from a prior expectation of the high end of $35 million to $45 million, with more costs expected in 2027. Delays in issuing Franchise Disclosure Documents have constrained Franchise Brand openings, and total net unit growth is expected at 80 to 100 units. Consensus had called for third-quarter EPS of about $0.29 on revenue of roughly $516 million.

The Restatement Timeline and Delayed Filing Are the Key Open Items

Driven Brands paired preliminary same store sales growth and continued debt paydown with a restatement of three years of fixed asset accounting and a lower profit outlook. The next items to follow are the date of the delayed third-quarter earnings call and Form 10-Q, the completion of the restatement and updated Franchise Disclosure Documents, and the resumption of share repurchases once reporting is current.