Summary of Monro Inc. Conference Call Company Overview - **Company**: Monro Inc. - **Industry**: Automotive aftermarket services, specifically tire sales and vehicle maintenance - **Locations**: 1,115 locations across 32 states [3][4] Core Points and Arguments 1. **Turnaround Potential**: Monro is viewed as a company with strong turnaround potential due to its national presence and service-oriented business model, which is more valuable to customers compared to traditional retail [3][4] 2. **Financial Health**: The company has maintained profitability despite several years of negative comparable store sales, indicating strong fundamentals and sufficient liquidity to support turnaround efforts [3][4] 3. **Traffic Decline**: The automotive aftermarket industry has faced challenges, including a decline in customer traffic, which Monro aims to address through improved marketing strategies [4][6] 4. **Store Closures**: Monro closed 145 underperforming stores to streamline operations and improve overall performance, with minimal inventory write-off [8][9] 5. **Merchandising Improvements**: The company has hired a new merchandising leader to enhance product offerings and address tariff-related cost increases, aiming for better vendor collaboration [10][11] 6. **Digital Marketing Focus**: Monro has shifted to a more targeted digital marketing strategy, including paid search and social media, to attract repeat customers and drive traffic to stores [11][12] 7. **Customer Engagement**: The implementation of a call center and improved customer communication is expected to enhance service delivery and customer experience [13][14] 8. **Service Revenue Growth**: The company has seen significant increases in service-related revenue, particularly in ride control and brake services, indicating successful upselling strategies [15][16] 9. **Market Share Gains**: Monro gained market share in tire sales during the first quarter, despite industry challenges related to excess capacity [31][33] 10. **Balance Sheet Strength**: Monro reported a net bank debt of $64 million, indicating a conservative leverage position and sufficient cash flow to support capital allocation priorities [34] Additional Important Insights 1. **KPI Focus**: Key performance indicators for monitoring the turnaround include operating income, comparable store sales, earnings per share, and unit growth [35][36] 2. **Long-term Growth Strategy**: The company is considering expansion into new markets, particularly the Southwest, to drive future growth [36][38] 3. **Vendor Relationships**: Strong relationships with tire vendors are crucial for negotiating favorable terms and ensuring product availability [31][32] 4. **Tariff Considerations**: Potential tariffs on imported tires may impact pricing strategies and consumer choices, which the company is monitoring closely [32][33] This summary encapsulates the key points discussed during the conference call, highlighting Monro Inc.'s strategic initiatives, financial health, and market positioning within the automotive aftermarket industry.

Group 1 - The company Monro (NASDAQ: MNRO) was downgraded from a 'buy' to a 'hold' in January 2023 due to ongoing struggles [1] - The focus of Crude Value Insights is on cash flow and companies that generate it, highlighting value and growth prospects in the oil and natural gas sector [1] Group 2 - Subscribers to the service have access to a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [2] - The service includes live chat discussions about the oil and gas sector, enhancing community engagement [2] - A two-week free trial is available for new subscribers, promoting engagement with the oil and gas investment community [3]

Core Insights - The article emphasizes the investment philosophy focused on small cap companies, highlighting the importance of identifying mispriced securities through understanding financial drivers and utilizing DCF model valuation [1]. Group 1 - The investment strategy is not confined to traditional categories such as value, dividend, or growth investing, but rather considers all prospects of a stock to assess risk-to-reward [1].

Core Insights - Monro reported Q1 FY2026 results with a GAAP revenue of $301.0 million, exceeding analyst estimates by $4.5 million, but faced a net loss due to one-off expenses [1][2] - The company experienced a 2.7% year-over-year revenue growth, driven by a 5.7% increase in comparable store sales, marking the second consecutive quarter of positive comparable store sales [5][6] - Despite sales growth, Monro's GAAP gross margin decreased by 170 basis points year-over-year, primarily due to rising labor and material costs [7][8] Financial Performance - Q1 FY2026 Non-GAAP EPS was $0.22, slightly below consensus estimates of $0.23, while GAAP revenue increased from $293.2 million in Q1 FY25 to $301.0 million [2][8] - Comparable store sales showed significant gains in specific categories, with front end/shocks up 26%, brakes and batteries up 9%, and tires and maintenance services each increasing by 4% year-over-year [5][6] - Operating expenses rose to $113.0 million, representing 37.5% of sales, largely due to store closing costs and consultant fees related to operational improvements [8][10] Strategic Focus - Monro is shifting its strategy from rapid expansion to optimizing existing store performance, focusing on customer experience, operational efficiency, and targeted cost management [4][6] - The company completed a store portfolio review, closing 145 underperforming locations to enhance profitability, reducing the store count from 1,284 to 1,115 [6][10] - Investment in digital processes, such as the ConfiDrive digital courtesy inspection, has been central to driving sales and improving customer engagement [5][6] Future Outlook - Monro has not provided formal financial guidance for FY2026 due to uncertainties around tariffs and economic risks, but noted a 2% growth in comparable store sales for July FY2026 [9][10] - Key areas to monitor include trends in gross margin, labor market conditions, promotional pricing strategies, and potential tariff negotiations [10]

Earnings Performance - Monro Muffler Brake reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.17 per share, and matching the earnings from the previous year [1] - The earnings surprise was +29.41%, contrasting with a prior quarter where the company posted a loss of $0.09 per share, resulting in a surprise of -200% [1][2] - Over the last four quarters, Monro has surpassed consensus EPS estimates only once [2] Revenue Insights - The company generated revenues of $301.04 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.55% and showing an increase from $293.18 million year-over-year [2] - Monro has exceeded consensus revenue estimates three times in the last four quarters [2] Stock Performance and Outlook - Monro shares have declined approximately 34.2% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The future stock price movement will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] Earnings Estimates and Industry Context - The current consensus EPS estimate for the upcoming quarter is $0.24 on revenues of $299.29 million, and for the current fiscal year, it is $0.74 on revenues of $1.19 billion [7] - The Zacks Industry Rank places the Consumer Services - Miscellaneous sector in the bottom 12% of over 250 Zacks industries, indicating potential challenges for stock performance [8] Estimate Revisions and Ratings - Prior to the earnings release, the estimate revisions trend for Monro was favorable, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting expected outperformance in the near future [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Sales increased by 2.7% to $301 million in the first quarter, driven by a 5.7% increase in comparable store sales, partially offset by sales reduction from closed stores [18] - Gross margin decreased by 170 basis points year-over-year, primarily due to higher technician labor costs and material costs [19] - Net loss was $8.1 million compared to net income of $5.9 million in the same period last year, with diluted loss per share at $0.28 compared to diluted earnings per share of $0.19 [22] Business Line Data and Key Metrics Changes - Tire units increased by 3% in the first quarter, with market share gained in higher margin tiers [18] - The company closed 145 underperforming stores, which generated approximately 5% of total sales in fiscal 2025, expected to improve profitability [6][7] Market Data and Key Metrics Changes - Comparable store sales growth was mid-single digits in the quarter, marking two consecutive quarters of positive comps for the first time in years [15] - Preliminary fiscal July comparable store sales were up 2%, indicating a sixth consecutive month of consistent growth [17] Company Strategy and Development Direction - The company is focusing on four key areas for performance improvement: closing unprofitable stores, increasing merchandising productivity, driving profitable customer acquisition, and enhancing customer experience [5] - The onboarding of a new Senior Vice President of Merchandising is expected to improve product availability and assortment [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's durable business model and strong financial position, despite challenges from tariffs and inflation [27] - The company is not providing specific guidance for fiscal 2026 but expects year-over-year comparable store sales growth driven by the improvement plan [24][25] Other Important Information - The company reduced inventory levels by approximately $10 million due to the reduction in store count [15] - Cash from operations was slightly negative in the quarter, primarily due to timing of vendor payments [23] Q&A Session Summary Question: Improvement in SG&A and impact from store closures - Management noted that SG&A showed improvement year-over-year, with some benefits from closed stores, but only for one month in June [31] Question: Same store sales outlook for the back half of the year - Management indicated confidence in achieving steady year-over-year increases in comparable store sales, focusing on trends rather than monthly fluctuations [35] Question: Details on gross margin decline - The decline was attributed to higher technician labor and material costs, with expectations for some cost pressures to ease as the year progresses [39][40] Question: Traffic and ticket trends - Traffic was steady, while ticket size increased, with optimism for continued strong average revenue per order (ARO) [42] Question: Impact of store closures on margins - The impact of store closures was smaller in Q1 due to only one month of closure benefits, but expected to be more meaningful going forward [50] Question: Sales trajectory and volatility explanation - Management explained that previous year comps were easier to outperform, and ongoing marketing efforts and tools like Confidrive are expected to drive incremental sales [58][60] Question: Long-term gross margin expectations - Management expects gross margin to remain pressured in FY 2026 but believes the business can expand margins over time with growing comparable sales [63]

Financial Performance - Sales increased to $301.0 million, a 2.7% increase compared to $293.2 million in Q1FY25 [13] - Same-store sales increased by 5.7% compared to a decrease of 9.9% in Q1FY25 [11, 13] - Gross margin decreased by 170 bps to 35.5% [13] - Adjusted diluted EPS remained flat at $0.22 [13] Strategic Initiatives - Successfully closed 145 underperforming stores by the end of May [6] - Expects store optimization plan to reduce total sales by approximately $45 million in fiscal 2026 [19] - Reduced inventory levels by approximately $10 million [11] Capital Allocation and Liquidity - Received approximately $3 million in divestiture proceeds [17] - Capital expenditures totaled approximately $7 million [17] - Principal payments for financing leases amounted to approximately $10 million [17] - Paid approximately $9 million in dividends [17] - Availability under the credit facility was approximately $398 million, with cash and equivalents of approximately $8 million as of June 2025 [17]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited financial statements and management's analysis for the quarter ended June 28, 2025 [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Monro, Inc. reported a net loss of $8.1 million for the quarter ended June 28, 2025, driven by store closure costs and a reversal to negative operating cash flow [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $1.605 billion as of June 28, 2025, primarily due to reduced cash and reclassification of assets held for sale Consolidated Balance Sheet Highlights (in thousands) | Account | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | **Assets** | | | | Cash and equivalents | $7,801 | $20,762 | | Total current assets | $254,802 | $277,399 | | Assets held for sale | $13,043 | $— | | Total assets | $1,605,060 | $1,641,823 | | **Liabilities & Equity** | | | | Total current liabilities | $505,963 | $524,290 | | Total liabilities | $1,000,169 | $1,021,062 | | Total shareholders' equity | $604,891 | $620,761 | [Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income](index=4&type=section&id=Consolidated%20Statements%20of%20(Loss)%20Income%20and%20Comprehensive%20(Loss)%20Income) The company reported a net loss of $8.1 million for the quarter, despite a 2.7% sales increase, due to a significant surge in OSG&A expenses Q1 Performance vs. Prior Year (in thousands, except per share data) | Metric | Q1 FY2026 (ended June 28, 2025) | Q1 FY2025 (ended June 29, 2024) | | :--- | :--- | :--- | | Sales | $301,035 | $293,182 | | Gross Profit | $106,906 | $109,185 | | Operating (Loss) Income | $(6,075) | $13,246 | | Net (Loss) Income | $(8,050) | $5,863 | | Diluted (Loss) Earnings Per Share | $(0.28) | $0.19 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow reversed to a $1.9 million use of cash, leading to a $13.0 million decrease in total cash and equivalents for the quarter Summary of Cash Flows (in thousands) | Activity | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | Cash (used for) provided by operating activities | $(1,939) | $25,638 | | Cash used for investing activities | $(2,366) | $(4,232) | | Cash used for financing activities | $(8,656) | $(9,302) | | (Decrease) increase in cash and equivalents | $(12,961) | $12,104 | | Cash and equivalents at end of period | $7,801 | $18,665 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail a store closure plan, completion of tire divestiture, credit facility amendment, and significant consulting fees for operational improvements - The company approved and executed a plan to close **145 underperforming stores** during the first quarter of fiscal 2026, recording **$14.8 million** in net store closing costs[32](index=32&type=chunk) - All outstanding payments from the 2022 divestiture of wholesale tire and distribution operations to ATD have been fully collected as of June 28, 2025[35](index=35&type=chunk) - On May 23, 2025, the company entered into a Fifth Amendment to its Credit Facility, which reduced the facility from **$600 million to $500 million** and provided temporary relief on certain financial covenants[57](index=57&type=chunk)[61](index=61&type=chunk) - The company incurred **$5.4 million** in expenses related to consulting agreements with AlixPartners and its affiliate APS for services including an Operational Improvement Plan and the provision of an interim CEO[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 2.7% sales increase driven by comparable store sales, a GAAP net loss, and adjustments for store closures and consulting fees - Key recent developments include amending the credit facility for covenant flexibility, closing **145 underperforming stores**, and engaging AlixPartners for an Operational Improvement Plan[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) Q1 FY2026 Financial Summary | Metric | Value | Note | | :--- | :--- | :--- | | Sales Increase | 2.7% | Driven by comparable store sales, offset by closures | | Comparable Store Sales Increase | 5.7% | - | | Operating Loss (GAAP) | $(6.1) million | - | | Adjusted Operating Income (Non-GAAP) | $14.0 million | Excludes store closing & consulting costs | | Net Loss (GAAP) | $(8.1) million | - | | Adjusted Net Income (Non-GAAP) | $7.0 million | - | | Diluted Loss Per Share (GAAP) | $(0.28) | - | | Adjusted Diluted EPS (Non-GAAP) | $0.22 | Flat YoY | [Analysis of Results of Operations](index=16&type=section&id=Analysis%20of%20Results%20of%20Operations) Sales increased 2.7% driven by comparable store growth, but gross profit margin declined due to higher costs, and OSG&A expenses surged from store closures and consulting fees Comparable Store Product Category Sales Change (Q1 FY26 vs Q1 FY25) | Product Category | Sales Change Q1 FY26 | Sales Change Q1 FY25 | | :--- | :--- | :--- | | Front end/shocks | +26% | -15% | | Batteries | +9% | -6% | | Brakes | +9% | -13% | | Tires | +4% | -8% | | Maintenance service | +4% | -10% | - Gross profit margin decreased by **170 basis points**, primarily driven by increased technician labor costs (**-170 bps**) and material costs (**-120 bps**), which were partially offset by leverage on fixed occupancy costs (**+120 bps**)[96](index=96&type=chunk)[97](index=97&type=chunk) - The **$17.0 million** increase in OSG&A expenses was mainly due to **$14.6 million** in net store closing costs and **$4.7 million** in consulting costs related to the Operational Improvement Plan[98](index=98&type=chunk)[100](index=100&type=chunk) [Non-GAAP Financial Measures](index=18&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures adjust GAAP operating loss of $6.1 million to an operating income of $14.0 million by excluding store closing and consulting costs Reconciliation of GAAP Operating (Loss) Income to Adjusted Operating Income (in thousands) | Description | Q1 FY2026 (ended June 28, 2025) | Q1 FY2025 (ended June 29, 2024) | | :--- | :--- | :--- | | **Operating (loss) income (GAAP)** | **$(6,075)** | **$13,246** | | Store closing costs, net | 14,816 | 181 | | Consulting costs related to the Operational Improvement Plan | 4,722 | — | | Transition costs related to back-office optimization | 571 | 597 | | Store impairment charges | — | 520 | | Corporate headquarters relocation costs | — | 125 | | **Adjusted operating income (Non-GAAP)** | **$14,034** | **$14,669** | [Analysis of Financial Condition](index=19&type=section&id=Analysis%20of%20Financial%20Condition) The company expects to fund operations via cash flow and credit facility, projecting $25-$35 million in capital expenditures, while managing a $251.2 million working capital deficit - Expected capital expenditures for fiscal 2026 are between **$25 million and $35 million**[112](index=112&type=chunk) - As of June 28, 2025, the company had **$7.8 million** in cash and equivalents and **$398.4 million** available under its Credit Facility[116](index=116&type=chunk) - The working capital deficit increased to **$251.2 million**, a situation influenced by extended payment terms with suppliers and managed through a voluntary supply chain finance program[115](index=115&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on floating-rate debt, with a 100 basis point SOFR change impacting annual interest expense by $0.7 million - A **100 basis point** change in the SOFR interest rate would impact annual interest expense by approximately **$0.7 million**, based on the debt level at June 28, 2025[134](index=134&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the most recent fiscal quarter[137](index=137&type=chunk) - No changes occurred in the company's internal control over financial reporting during the quarter ended June 28, 2025, that have materially affected, or are reasonably likely to materially affect, these controls[138](index=138&type=chunk) [PART II. OTHER INFORMATION](index=24&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides information on legal proceedings, exhibits filed, and official signatures for the report [Item 1. Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management does not anticipate a material adverse impact on financial condition or operations - The company is party to various legal proceedings incidental to its business, but believes the ultimate resolution will not have a material adverse impact[140](index=140&type=chunk) [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including credit agreement amendments and Sarbanes-Oxley certifications - Key exhibits filed include Amendment No. 5 to the Credit Agreement and certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act[142](index=142&type=chunk) [Signatures](index=26&type=section&id=Signatures) The Form 10-Q was signed on July 30, 2025, by the company's Principal Executive Officer and Principal Financial Officer - The Form 10-Q was signed on July 30, 2025, by the company's Principal Executive Officer and Principal Financial Officer[146](index=146&type=chunk)

Part I [First Quarter Fiscal 2026 Results Summary](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Results%20Summary) Monro reported a 2.7% sales increase to $301.0 million for Q1 FY2026, driven by a 5.7% rise in comparable store sales, leading to a GAAP net loss of $8.1 million due to one-time costs, while adjusted diluted EPS remained flat at $0.22 Q1 FY2026 Key Financial Metrics | Metric | Q1 FY2026 | Q1 FY2025 | % Change | | :--- | :--- | :--- | :--- | | Sales | $301.0 million | $293.2 million | 2.7% | | Comparable Store Sales | 5.7% | -9.9% | N/A | | Net (Loss) Income | ($8.1 million) | $5.9 million | -237.3% | | Diluted (Loss) EPS | ($0.28) | $0.19 | -247.4% | | Adjusted Diluted EPS | $0.22 | $0.22 | 0.0% | - The company completed a comprehensive store portfolio review, resulting in the closure of **145** underperforming stores during the quarter[5](index=5&type=chunk)[16](index=16&type=chunk) - A cash dividend of **$0.28** per share for the first quarter of fiscal 2026 was paid on June 17, 2025[5](index=5&type=chunk)[15](index=15&type=chunk) [Detailed Financial Analysis](index=1&type=section&id=Detailed%20Financial%20Analysis) Sales growth was driven by strong service category performance, though profitability was significantly impacted by a 170 basis point gross margin decrease and a 17.8% surge in operating expenses to $113.0 million, leading to a GAAP operating loss of $6.1 million Q1 FY2026 Comparable Store Sales Growth by Category | Category | Comparable Store Sales Growth | | :--- | :--- | | Front End/Shocks | +26% | | Brakes | +9% | | Batteries | +9% | | Tires | +4% | | Maintenance Services | +4% | | Alignments | Flat | - Gross margin fell by **170 basis points**, attributed to higher technician labor costs from wage inflation and increased material costs, partly due to promotional activities[6](index=6&type=chunk) - Operating expenses increased significantly due to **$14.8 million** in store closing costs and **$4.7 million** in consulting fees related to the company's operational improvement plan[7](index=7&type=chunk) Operating (Loss) Income Performance | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Operating (Loss) Income (GAAP) | ($6.1 million) | $13.2 million | | Adjusted Operating Income (Non-GAAP) | $14.0 million | $14.7 million | [Management Commentary and Strategy](index=3&type=section&id=Management%20Commentary%20and%20Strategy) CEO Peter Fitzsimmons highlighted two consecutive quarters of positive comparable store sales, driven by the ConfiDrive digital inspection process, with future strategy focusing on improving performance in the remaining 1,115 locations after closing 145 underperforming stores - Management attributes the mid-single-digit comparable store sales growth to the success of its ConfiDrive digital courtesy inspection process, which boosted sales in both tire and high-margin service categories[12](index=12&type=chunk) - Preliminary comparable store sales for fiscal July are up **2%**, marking a potential **sixth consecutive month** of growth[12](index=12&type=chunk) - Future strategy will focus on improving performance in the **1,115** continuing locations by increasing merchandising productivity, driving customer acquisition, and enhancing the store experience[13](index=13&type=chunk) [Financial Position and Corporate Updates](index=3&type=section&id=Financial%20Position%20and%20Corporate%20Updates) As of June 28, 2025, Monro maintained a strong financial position with $398.4 million available under its credit facility and $7.8 million in cash, having completed its store portfolio review and released its fifth annual ESG report - The company has **$398.4 million** available under its credit facility and **$7.8 million** in cash and equivalents as of June 28, 2025[14](index=14&type=chunk) - Monro ended the quarter with **1,115** company-operated stores and **48** franchised locations after closing **145** underperforming stores[16](index=16&type=chunk) - The company recently released its **fifth annual** Environmental, Social & Governance (ESG) Report for fiscal year 2025[17](index=17&type=chunk) - Monro is not providing fiscal 2026 financial guidance at this time[18](index=18&type=chunk) Part II [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) Unaudited financial statements show a 2.7% sales increase to $301.0 million for Q1 FY2026, but a 17.8% rise in operating expenses led to an $8.1 million net loss, with total assets at $1.605 billion and liabilities at $1.000 billion Condensed Income Statement (Unaudited, in thousands) | | Quarter Ended June 2025 | Quarter Ended June 2024 | | :--- | :--- | :--- | | Sales | $301,035K | $293,182K | | Gross Profit | $106,906K | $109,185K | | Operating (Loss) Income | $(6,075)K | $13,246K | | Net (Loss) Income | $(8,050)K | $5,863K | Condensed Balance Sheet (Unaudited, in thousands) | | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | Total Current Assets | $254,802K | $277,399K | | Total Assets | $1,605,060K | $1,641,823K | | Total Current Liabilities | $505,963K | $524,290K | | Total Liabilities | $1,000,169K | $1,021,062K | | Total Shareholders' Equity | $604,891K | $620,761K | [Non-GAAP Financial Measures and Reconciliations](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) Monro provides non-GAAP measures to assess core operations by excluding items like $14.8 million in store closing costs and $4.7 million in consulting fees, reconciling a GAAP operating loss of $6.1 million to an adjusted operating income of $14.0 million - The company uses non-GAAP measures to exclude items not considered part of core operations, such as store closing costs, consulting fees for its operational improvement plan, and transition costs[22](index=22&type=chunk) Reconciliation of GAAP Operating (Loss) Income to Adjusted Operating Income (in thousands) | | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Operating (Loss) Income | $(6,075)K | $13,246K | | Store closing costs, net | $14,816K | $181K | | Consulting costs | $4,722K | $—K | | Other adjustments | $571K | $1,242K | | **Adjusted Operating Income** | **$14,034K** | **$14,669K** | Reconciliation of GAAP Diluted (Loss) EPS to Adjusted Diluted EPS | | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Diluted (Loss) EPS | $(0.28) | $0.19 | | Store closing costs, net | $0.37 | $0.00 | | Consulting costs | $0.12 | $— | | Other adjustments | $0.02 | $0.02 | | **Adjusted Diluted EPS** | **$0.22** | **$0.22** | [Definition of Key Metrics](index=6&type=section&id=Definition%20of%20Key%20Metrics) The company defines 'comparable store sales' as sales from locations open or owned for at least one full fiscal year, a key metric used by management to assess store operating performance - Comparable store sales are defined as sales for locations that have been open or owned for at least one full fiscal year, a period the company believes is required for new store sales to normalize[24](index=24&type=chunk)

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks. Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by th ...