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]

分组1 - Monro Muffler Brake reported quarterly earnings of $0.19 per share, missing the Zacks Consensus Estimate of $0.28 per share, and down from $0.39 per share a year ago, representing an earnings surprise of -32.14% [1] - The company posted revenues of $305.77 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.52%, and down from $317.65 million year-over-year [2] - Monro has surpassed consensus EPS estimates only once in the last four quarters, and has also topped consensus revenue estimates just once during the same period [2] 分组2 - The stock has underperformed the market, losing about 11.3% since the beginning of the year compared to the S&P 500's gain of 3.2% [3] - The current consensus EPS estimate for the coming quarter is $0.19 on revenues of $307.69 million, and for the current fiscal year, it is $0.84 on revenues of $1.21 billion [7] - The Zacks Industry Rank for Consumer Services - Miscellaneous is currently in the bottom 35% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]

Financial Data and Key Metrics Changes - Comparable store sales percentage change improved by 500 basis points sequentially from Q2 of fiscal 2025, with sales of $305.8 million, a decrease of 3.7% year over year, primarily driven by a 1.9% decline in comparable store sales unadjusted for days [13][15] - Gross margin decreased by 120 basis points compared to the prior year, primarily due to higher material costs and increased self-funded promotions [15][16] - Operating income for Q3 declined to $10 million or 3.3% of sales, compared to $21.4 million or 6.7% of sales in the prior year [16] - Net income was $4.6 million, down from $12.2 million in the same period last year, with diluted earnings per share at $0.15 compared to $0.38 [17] Business Line Data and Key Metrics Changes - Tire units were up low single digits in Q3, driven by mid single-digit growth in units during December [14] - Year-over-year growth in service categories, including batteries, alignment, and front-end shocks, was noted, while brake category performance still requires improvement [9][12] Market Data and Key Metrics Changes - Preliminary fiscal January comparable store sales were down 1%, driven by weakness in tire category sales due to extreme weather, which resulted in temporary store closures [10][11] - The company gained higher market share in higher margin tiers during the quarter [14] Company Strategy and Development Direction - The company remains focused on sales and unit growth while making necessary price and promotional investments, even if it pressures profitability in the near term [10][12] - Initiatives such as the Comfort Drive digital courtesy inspection process and oil change offers are expected to drive improvements in store traffic and service category performance [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in restoring gross margins back to pre-COVID levels with double-digit operating margins over the long term as top-line growth resumes [12][21] - The company anticipates leveraging initiatives to achieve Q4 objectives, including improving store traffic trends and accelerating performance in key service categories [11][20] Other Important Information - The company generated $103 million of cash from operations, with a net bank debt of $49 million and total liquidity of $521 million [18][19] - Capital expenditures are expected to be between $25 million to $30 million for fiscal 2025 [20] Q&A Session Summary Question: Will gross profit comps continue to improve or will there be a mix deterioration? - Management indicated that gross margin declined 120 basis points due to material costs and self-funded promotions, and similar pressure is expected going forward [24] Question: Was weather a net benefit or drag in Q3? - Management stated that Q3 was neutral regarding weather impact, but extreme weather in January is expected to benefit future performance [25][26] Question: What benefits are seen from the digital courtesy inspection? - Management noted that while traffic was down, average ticket size increased, driven by service categories, indicating strong attachment rates [32][34] Question: What is the current mix of Tier 3 tires? - The mix is in the high 20s, with a focus on steering customers towards Tier 3 rather than Tier 4 [44][47] Question: What is the status of ATD receivables? - The company still has $6.8 million of receivables owed from ATD, with no reserves against that amount, expecting full collection [56] Question: How did regional performance vary? - The South performed stronger than the consolidated comp, while the Midwest, Northeast, and West were weaker [57] Question: What are the building blocks to restore gross margins to pre-COVID levels? - Management highlighted the need for reduced material cost pressures and top-line growth to achieve margin restoration [71]

THIRD QUARTER FISCAL 2025 EARNINGS CALL JANUARY 29, 2025 Safe Harbor Statement and Non-GAAP Measures In addition to including references to diluted earnings per share ("EPS"), which is a generally accepted accounting principals ("GAAP") measure, this presentation includes references to adjusted diluted earnings per share, which is a non-GAAP financial measure. Monro has included a reconciliation from adjusted diluted EPS to its most directly comparable GAAP measure, diluted EPS in the appendix to this prese ...

Financial Performance - For Q3 2025, diluted EPS was $0.15, a decrease of 60.5% compared to $0.38 in the prior year, while adjusted diluted EPS was $0.19, down 51.3% from $0.39 [75]. - Sales for the three months ended December 28, 2024, were $305.8 million, a decrease of 3.7% from $317.7 million in the prior year, with comparable store sales down 1.9% [77][82]. - Operating income for Q3 2025 was $10.0 million, a decline of 53.4% from $21.4 million in the same period last year [79]. - Gross profit for the three months ended December 28, 2024, was $104.8 million, representing 34.3% of sales, down from 35.5% in the prior year [90]. - Adjusted net income for the three months ended December 28, 2024, was $5.8 million, compared to $12.5 million for the same period last year [99]. Expenses and Costs - OSG&A expenses increased by 3.9% to $94.8 million, accounting for 31.0% of sales, compared to 28.7% in the prior year [92]. - OSG&A expenses increased by $3.5 million for the three months ended December 28, 2024, driven primarily by a $3.6 million increase from comparable stores [93]. - Net interest expense decreased to $4.2 million for the three months ended December 28, 2024, down from $5.0 million in the prior year, representing a decrease from 1.6% to 1.4% of sales [94]. - The effective income tax rate for the three months ended December 28, 2024, was 21.2%, down from 25.8% in the prior year [96]. Cash Flow and Financing - Cash provided by operating activities for the nine months ended December 28, 2024, was $103.0 million, down from $130.5 million in the prior year [114]. - Cash used for financing activities for the nine months ended December 28, 2024, was $99.5 million, a decrease from $111.2 million for the same period in 2023, primarily due to a reduction in payments on the Credit Facility [118][119]. - Payments on the Credit Facility for the nine months ended December 28, 2024, totaled $42.8 million, compared to $11.0 million for the same period in 2023 [118][119]. - The company repurchased $44.0 million in common stock during the nine months ended December 23, 2023 [119]. - As of December 28, 2024, the company had a working capital deficit of $234.0 million, an increase of $32.1 million from the previous period [109]. - Cash and equivalents at the end of the period were $10.2 million, with $510.6 million available under the Credit Facility [110]. Business Operations and Strategy - The company experienced a 30% increase in battery sales and a 13% increase in alignment services during Q3 2025, partially offsetting declines in other categories [84][87]. - The total number of company-operated retail stores decreased from 1,298 to 1,263 over the three months ended December 28, 2024 [89]. - The company anticipates that comparable store sales growth will significantly influence total sales growth moving forward [81]. - The company is actively seeking remaining earnout payments of $6.8 million from American Tire Distributors, which filed for bankruptcy protection [73]. - The company plans to continue its growth strategy, including potential store expansions and renovations, which may involve related costs [126]. Economic Conditions and Risks - Economic conditions, including higher inflation and constrained labor availability, may lead to a potential economic slowdown impacting demand for products and services [74]. - The company is dependent on third-party vendors for certain inventory, which poses risks related to vendor performance and international trade [126]. - Forward-looking statements include expectations regarding sales, gross profit margin, and capital expenditures, which are subject to various risks and uncertainties [125][126]. Capital Expenditures - Capital expenditures for fiscal 2025 are expected to be between $25 million and $30 million [106]. Debt and Interest Rates - As of December 28, 2024, the carrying amount of debt financing approximated a fair value of $59.3 million, down from $102.0 million as of March 30, 2024 [131]. - The cash flow exposure on floating rate debt could result in annual interest expense fluctuations of approximately $0.6 million based on the debt position at December 28, 2024, with a 100 basis points change in SOFR [130]. - The company has no debt financing at fixed interest rates as of December 28, 2024, which could be affected by changes in market interest rates [130]. - The company evaluates its critical accounting estimates on an ongoing basis, with no material changes reported since the last Form 10-K [123].

Financial Performance - Sales for the third quarter of fiscal 2025 decreased 3.7% to $305.8 million, compared to $317.7 million in the same period of fiscal 2024[2] - Net income for the third quarter of fiscal 2025 was $4.6 million, down 62.3% from $12.2 million in the same period of the prior year[9] - Diluted earnings per share for the third quarter of fiscal 2025 was $0.15, compared to $0.38 in the third quarter of fiscal 2024, reflecting a 60.5% decrease[9] - Operating income for the third quarter was $10.0 million, or 3.3% of sales, down from $21.4 million, or 6.7% of sales in the prior year[6] - Comparable store sales for the first nine months decreased 5.6%, with total sales down 6.9% to $900.3 million from $966.7 million in the prior year[12] - Net income for the nine months was $16,093,000, a decrease from $33,871,000 in the previous year, with adjusted net income at $17,865,000 compared to $35,726,000[39] Cost and Expenses - Gross margin decreased 120 basis points year-over-year, primarily due to higher material costs and increased self-funded promotions[5] - Total operating expenses for the third quarter were $94.8 million, or 31.0% of sales, compared to $91.3 million, or 28.7% of sales in the prior year[6] - Transition costs related to back-office optimization amounted to $527,000 for the quarter and $1,677,000 for the nine months[35][39] - Store closing costs were $437,000 for the quarter and $1,149,000 for the nine months, reflecting ongoing restructuring efforts[35][39] Store Operations - The company closed 9 stores during the third quarter, ending with 1,263 company-operated stores and 48 franchised locations[10] Legal and Asset Management - The company reported a litigation reserve of $650,000 for the quarter, indicating potential legal challenges[35] - The net loss on the sale of wholesale tire and distribution assets was recorded as $304,000 for the nine months, impacting overall profitability[39] - The company recognized a net gain of $73,000 from the sale of corporate headquarters for the quarter, contributing positively to adjusted net income[35] - Total assets as of December 2024 were $1,669,292,000, compared to $1,692,814,000 in the previous year, indicating a slight decrease in asset base[31] Earnings Adjustments - For the quarter ended December 2024, diluted EPS decreased to $0.15 from $0.38 in the same quarter of 2023, with adjusted diluted EPS at $0.19 compared to $0.39[33] - Net income for the quarter was $4,583,000, down from $12,170,000 in the prior year, resulting in adjusted net income of $5,791,000 compared to $12,546,000[35] - For the nine months ended December 2024, diluted EPS was $0.52, down from $1.05 in 2023, with adjusted diluted EPS at $0.57 compared to $1.11[37]