Monro (MNRO) FY Conference June 10, 2025 10:30 AM ET Speaker0 Well, good morning. Thank you all for joining us. My name is Brian Nagel. I'm a senior equity research analyst here at Oppenheimer covering consumer growth and ecommerce. So this is our twenty fifth annual Oppenheimer consumer growth and ecommerce conference. We very much appreciate all of you attending. So I'm pleased to have with us our next presenting company, Monroe, and two of the company's senior executives, Brian D'Ambrosia, and investor r ...

Store Operations and Strategy - As of March 29, 2025, Monro operated 1,260 retail tire and automotive repair stores and serviced approximately 4.2 million vehicles in fiscal 2025[16]. - The company plans to close 145 underperforming stores in the first quarter of fiscal 2026 as part of its Store Closure Plan[21]. - Monro completed 5 acquisitions in the last five years, adding 69 locations and approximately $103 million in annualized revenue[29]. - The company aims to enhance its omni-channel presence through improved brand websites, allowing customers to search for store locations, access coupons, and make service appointments[27]. - Monro's growth strategy includes identifying acquisition opportunities based on consumer demographic analytics to enter favorable markets[28]. - The company is focused on integrating new and acquired stores to drive growth, with challenges in achieving expected profitability levels[102]. Financial Performance - Fiscal 2025 diluted loss per common share was ($0.22), a decrease of 118.6% compared to $1.18 in fiscal 2024[163]. - Adjusted diluted earnings per share (EPS) for fiscal 2025 were $0.48, down 63.9% from $1.33 in fiscal 2024[163]. - Sales decreased by 6.4% primarily due to lower overall comparable store sales resulting from reduced store traffic and fewer selling days[164]. - Comparable store sales decreased by 5.3% from the prior year, or a decrease of 3.5% when adjusted for days[164]. - Operating income for fiscal 2025 was $12.6 million, representing an 82.4% decline from the previous year, impacted by a $22.4 million increase in store impairment charges[164]. - Sales for 2025 were $1,195,334 thousand, a decrease of 6.4% compared to $1,276,789 thousand in 2024[166]. - Gross profit for 2025 was $417,645 thousand, down 7.6% from $452,103 thousand in 2024, with a gross profit margin of 34.9%[176]. - Operating, selling, general and administrative expenses increased by 6.4% to $405,080 thousand in 2025, primarily due to a $22,440 thousand rise in store impairment charges[178]. - Adjusted net income for 2025 was $15,624 thousand, down from $42,398 thousand in 2024, reflecting significant impairment and transition costs[184]. Employee and Labor Considerations - Monro had approximately 7,360 employees as of March 29, 2025, with 7,200 employed in the field organization[38]. - The company is experiencing increased payroll expenses due to mandated minimum wage increases and inflation, which could adversely affect profitability[93]. - The company faces challenges in hiring skilled technicians due to a tight labor market, which could adversely impact financial performance[119]. Environmental and Safety Commitments - Monro recycled approximately 2.0 million gallons of oil, 3.0 million tires, 79,000 vehicle batteries, and 351 tons of cardboard in 2025 as part of its environmental commitment[60]. - The company has a commitment to workplace safety, with training programs aimed at reducing workplace accidents and injuries[52]. - Compliance with various environmental and consumer protection regulations may impose significant operational burdens and costs[90]. Financial Obligations and Risks - As of March 29, 2025, Monro had $61.3 million outstanding under its Credit Facility, indicating reliance on external financing[80]. - The Credit Facility includes covenants that restrict the company's ability to incur additional debt, make investments, and declare dividends, which could adversely affect its financial condition[84]. - The company must maintain a minimum interest coverage ratio and a maximum ratio of adjusted debt to EBITDAR, with potential defaults impacting its financial stability[85]. - Total contractual obligations as of March 29, 2025, amounted to $618.0 million, with $97.8 million due within one year[194]. - The current borrowing capacity for the Credit Facility is $500 million, with an accordion feature allowing for an additional $250 million[205]. - The company has a minimum liquidity requirement of $400 million to declare dividends during the Covenant Relief Period[213]. Market and Economic Conditions - The automotive repair industry is highly competitive, with various competitors including national and regional service centers, mass merchandisers, and online retailers[65]. - Economic conditions affecting consumer spending, such as inflation and interest rates, could adversely impact Monro's financial performance[66]. - The adoption of electric vehicle technology may decrease demand for traditional automotive services, affecting revenue[71]. - Changes in automotive technology may lead to reduced demand for certain services, impacting sales negatively[72]. - Monro's business is influenced by the number of miles driven, which can be affected by factors like gas prices and weather conditions[67]. - Significant fluctuations in shipping costs and transportation delays due to geopolitical events could negatively impact operations and financial results[81]. Cybersecurity and Legal Risks - The company has faced a cyber incident involving unauthorized access to employee data, leading to potential legal liabilities and increased costs[99]. - The company has implemented a comprehensive cybersecurity program aligned with industry standards, focusing on prevention, detection, and response to threats[126]. Changes in Corporate Structure and Governance - The company has undergone significant changes in executive leadership, which may create uncertainty and impact strategic execution[87]. - The concentration of voting power in Class C Convertible Preferred Stock limits the influence of common shareholders on corporate matters[114]. - The company may reduce or eliminate its common stock dividend in the future, which could adversely affect the market price of its common stock[113]. Asset Management and Impairments - In fiscal 2025, the company incurred store impairment charges of approximately $24.4 million due to changes in financial performance and recoverability assessments[109]. - The company recorded $20.8 million in store impairment costs in fiscal 2025 related to the identified underperforming stores[110]. - The company has not identified any impairment of goodwill or intangible assets as of March 29, 2025, but future performance issues could lead to impairments[107]. - Future determinations of significant write-offs of goodwill or intangible assets could have a material negative impact on the company's financial condition[109].

Monro Muffler Brake (MNRO) came out with a quarterly loss of $0.09 per share versus the Zacks Consensus Estimate of $0.09. This compares to earnings of $0.21 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -200%. A quarter ago, it was expected that this automotive repair chain would post earnings of $0.28 per share when it actually produced earnings of $0.19, delivering a surprise of -32.14%.Over the last four quarters, the co ...

Monro (MNRO) Q4 2025 Earnings Call May 28, 2025 08:30 AM ET Company Participants Felix Veksler - VP - IRPeter Fitzsimmons - President & CEOBrian D'Ambrosia - Executive VP of Finance, CFO & TreasurerDavid Lantz - Equity Research - Hardline RetailBret Jordan - Managing Director Conference Call Participants Thomas Wendler - Analyst Operator Good morning, ladies and gentlemen, and welcome to Monro, Inc. Earnings Conference Call for the Fourth Quarter and Full Year of Fiscal twenty twenty five. At this time, all ...

Financial Data and Key Metrics Changes - Sales decreased by 4.9% to $295 million in Q4, primarily due to six fewer selling days compared to the previous year, resulting in a sales decrease of $18.9 million [22] - Comparable store sales increased by 2.8% but decreased by 3.6% when unadjusted for days [22] - Net loss was $21.3 million compared to net income of $3.7 million in the same period last year, with diluted loss per share at $0.72 compared to diluted earnings per share of $0.12 [25] Business Line Data and Key Metrics Changes - Tire units were up mid-single digits in Q4, driven by growth in units above 10% during March [22] - Gross margin decreased by 250 basis points year-over-year, primarily due to higher material costs and increased technician labor costs [23] Market Data and Key Metrics Changes - The average vehicle life of cars on the road is over 12.5 years, with vehicle miles traveled returning to pre-COVID levels [8] - The company gained tire market share in higher margin tiers during the quarter [22] Company Strategy and Development Direction - The company plans to close 145 underperforming stores, which generated approximately 5% of total sales in fiscal 2025, to improve profitability [11] - Focus areas for improvement include enhancing customer experience, driving profitable customer acquisition, and increasing merchandising productivity [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute the performance improvement plan and capitalize on positive industry trends [19] - The company expects to see year-over-year comparable store sales growth in fiscal 2026, driven by the improvement plan [27] Other Important Information - The company generated $132 million in cash from operations during fiscal 2025, maintaining a strong financial position [26] - The company expects to incur store closure costs of approximately $10 million to $15 million primarily during the first quarter of fiscal 2026 [28] Q&A Session Summary Question: Can you provide details on the gross margins and the impact of self-funded promotions? - Management indicated that self-funded promotions, including tire promotions, have been consistent and are expected to keep gross margins pressured due to baseline cost increases and potential tariff impacts [36][37] Question: What is the strategy for customer acquisition and improving the Monro experience? - Management is reallocating marketing investments towards targeting repeat customers who appreciate a range of services, aiming to attract higher value customers [39][40] Question: Can you break down the decline in gross margin in more detail? - The decline was attributed to 160 basis points related to material costs and 80 basis points due to technician labor costs, with some deleverage on fixed occupancy costs [47] Question: What are the dynamics between traffic and ticket in the quarter? - Store traffic was down low single digits while ticket was up mid-single digits, indicating a positive trend in recent months [50] Question: What is the common denominator for the store closures? - The closures are spaced throughout the network, focusing on stores that are unlikely to meet the desired earnings profile [57]

FOURTH QUARTER FISCAL 2025 EARNINGS CALL MAY 28, 2025 Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to our business plans and operating results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Monro has identified some of these forward-looking statements with words such as "expect," "estimate," "may," "anticipate," "believe," "focus," "will," "plan," and the neg ...

Financial Performance - Fourth quarter sales decreased 4.9% to $295.0 million compared to $310.1 million in the same quarter of fiscal 2024[2] - Total sales for the twelve months ended March 2025 were $1,195,334, a decrease of 6.4% compared to $1,276,789 in 2024[32] - Gross profit decreased by 7.6% to $417,645 from $452,103 year-over-year[32] - Operating income fell significantly by 82.4% to $12,565, down from $71,425 in the previous year[32] - Net loss for fiscal 2025 was $5.2 million, or $0.22 per diluted share, compared to net income of $37.6 million, or $1.18 per diluted share in the prior year[14] - Net loss for the twelve months was $5,182, a decline of 113.8% compared to net income of $37,571 in 2024[32] - Diluted loss per share was $(0.22), a decrease of 118.5% from earnings of $1.18 per share in 2024[32] - Adjusted net income for the twelve months was $15,624, down from $42,398 in the previous year[42] Sales and Store Performance - Comparable store sales increased 2.8% in the fourth quarter, with notable increases of 27% for front end/shocks and 25% for batteries[3] - Preliminary quarter-to-date comparable store sales for the first quarter of fiscal 2026 are up approximately 7%[12] - The company identified 145 underperforming stores for closure during the first quarter of fiscal 2026[19] Expenses and Costs - Total operating expenses for fiscal 2025 were $405.1 million, or 33.9% of sales, compared to $380.7 million, or 29.8% of sales in fiscal 2024[14] - Store impairment charges for the twelve months were $24,355, compared to $1,915 in 2024[42] - Management restructuring costs for the twelve months were $1,778, up from $1,210 in the previous year[42] - Costs incurred related to restructuring and elimination of certain management positions[43] Cash Flow and Assets - The company generated cash from operating activities of $132 million during fiscal 2025[5] - Total assets as of March 2025 were $1,641,823, a slight decrease from $1,692,814 in 2024[34] - Current liabilities increased to $524,290 from $455,156 in the previous year[34] Dividends and Guidance - The company approved a cash dividend of $0.28 per share for the first quarter of fiscal 2026[18] - The company is not providing fiscal 2026 financial guidance at this time but will share expectations during its earnings conference call[20] Tax Rates - Adjusted effective tax rates were 24.7% for the quarter ended March 2025 and 27.1% for the quarter ended March 2024[43] - For the twelve months ended March 2025, the adjusted effective tax rate was 25.0%, compared to 26.5% for the twelve months ended March 2024[43] Other Financial Adjustments - Gain on sale of the corporate headquarters building, net of associated closing and relocation costs[43] - Loss on subsequent inventory adjustments from prior year sale of wholesale tire and distribution assets[43]

Core Viewpoint - Monro Muffler Brake (MNRO) has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - Changes in a company's future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to calculate the fair value of a company's shares, leading to buying or selling actions that affect stock prices [3]. Monro's Earnings Outlook - The rising earnings estimates for Monro indicate an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. - Monro is projected to earn $0.62 per share for the fiscal year ending March 2025, reflecting a year-over-year change of -53.4% [7]. Zacks Rank System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - The upgrade of Monro to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9]. Earnings Estimate Revisions - Over the past three months, the Zacks Consensus Estimate for Monro has increased by 9.4%, indicating positive sentiment among analysts [7]. - The Zacks rating system maintains a balanced approach, ensuring an equal proportion of 'buy' and 'sell' ratings across its universe of stocks [8].

Core Insights - Monro, Inc. (NASDAQ: MNRO) reported its Q3 2025 earnings, which have not been widely covered recently [1] Financial Performance - The company has a long-term investment perspective, focusing on a 5-10 year horizon [1] - The investment strategy emphasizes a mix of growth, value, and dividend-paying stocks, with a particular focus on value [1] Investment Strategy - The company maintains a simple investment approach, which includes selling options occasionally [1]

Core Insights - Monro, Inc. reported third-quarter fiscal 2025 results with both net sales and earnings missing the Zacks Consensus Estimate, showing year-over-year declines in both metrics [1][2] Financial Performance - Adjusted earnings were 19 cents per share, missing the Zacks Consensus Estimate of 28 cents, and down 51% from 39 cents in the prior-year quarter [2] - Net sales totaled $305.8 million, a decline of 3.7% year-over-year, missing the Zacks Consensus Estimate of $310 million [3] - Comparable store sales decreased by 0.8% (adjusted for days), but improved by 500 basis points from a 5.8% decrease in the second quarter of fiscal 2025 [4] Sales Breakdown - The company experienced a 30% increase in comparable store sales for batteries, 13% for alignments, and 6% for front end/shocks, while tires, maintenance services, and brakes saw declines of 1%, 2%, and 6% respectively [4] Profitability Metrics - Gross profit was $104.8 million, down from $112.7 million in the year-ago period, with gross margin contracting 120 basis points to 34.3% due to higher material costs and increased promotions [5] - Total operating expenses rose to $94.8 million from $91.3 million in the prior year, increasing as a percentage of net sales by 230 basis points to 31% [6] - Operating income was reported at $10 million, down from $21.4 million in the prior-year quarter, with operating margin contracting 340 basis points to 3.3% [6] Store Operations - Monro closed nine stores, resulting in a total of 1,263 company-operated locations and 48 franchised stores by the end of the quarter [7] Cash Flow and Liquidity - For the first nine months of fiscal 2025, net cash provided by operating activities was $103 million, with capital expenditures of $20.7 million [8] - The company anticipates generating at least $120 million in operating cash flow for fiscal 2025, with capital expenditures expected to range from $25 million to $30 million [8] - As of December 28, 2024, Monro had total liquidity of $521 million [8] Stock Performance - Monro's stock has lost 25.6% in the past three months, contrasting with a 5% growth in the industry [9]