Monro(US:MNRO)2025-10-29 11:34Sales Performance - Sales for the second quarter of fiscal 2026 decreased 4.1% to $288.9 million, compared to $301.4 million in the same period of fiscal 2025[2]. - For the six months ended September 2025, sales decreased by 0.8% to $589,949 thousand compared to $594,573 thousand in 2024[30]. Comparable Store Sales - Comparable store sales increased 1.1% in the second quarter, with notable increases of 18% for front end/shocks and 6% for brakes[5][3]. - The company is not providing fiscal 2026 financial guidance at this time but expects to deliver positive comparable store sales[17][14]. Profitability Metrics - Gross margin expanded by 40 basis points to 35.7%, primarily due to lower occupancy and material costs[6][13]. - Operating income for the second quarter was $12.8 million, or 4.4% of sales, with adjusted operating income at $14.0 million, or 4.8% of sales[8]. - Net income for the second quarter was $5.7 million, with diluted earnings per share remaining at $0.18, while adjusted diluted earnings per share increased to $0.21[11]. - Operating income significantly declined by 74.8% to $6,675 thousand, compared to $26,449 thousand in the prior year[30]. - The net loss for the six months was $2,385 thousand, a decrease of 120.7% from a net income of $11,510 thousand in 2024[30]. - Adjusted operating income for the six months increased to $28,014 thousand from $27,223 thousand, reflecting a year-over-year growth of 2.9%[40]. - Adjusted net income rose to $13,600 thousand for the six months, compared to $12,074 thousand in 2024, marking an increase of 12.6%[42]. Earnings Per Share - The diluted loss per share for the six months was $(0.10), compared to earnings of $0.37 per share in the previous year[30]. - For the quarter ended September 2025, adjusted diluted earnings per share increased to $0.21 from $0.17 in 2024[38]. - Adjusted diluted earnings per share for the six months ended fiscal September 2025 were $0.43, an increase from $0.39 in the prior year[44]. Operating Expenses - Total operating expenses for the second quarter were $90.4 million, or 31.3% of sales, compared to $93.2 million, or 30.9% of sales in the prior year[7]. - Consulting costs related to the operational improvement plan amounted to $12,986 thousand for the six months, indicating a significant investment in operational efficiency[42]. Store Operations - The company ended the quarter with 1,116 company-operated stores and 48 franchised locations[12]. - The company closed 145 underperforming stores as part of its Store Closure Plan, which included related asset write-offs[45]. - There were no store impairment charges recorded for the six months ended fiscal September 2025, compared to $0.04 million in the prior year[44]. - The store closing costs, net, amounted to $0.18 million for the six months ended fiscal September 2025, compared to $0.02 million in the same period of 2024[44]. Cash Flow and Dividends - The company generated $30 million in cash from operating activities for the first half of fiscal 2026[15]. - The company paid a cash dividend of $0.28 per share for the second quarter of fiscal 2026[16]. Assets and Liabilities - The total assets as of September 2025 were $1,584,000 thousand, a decrease from $1,641,823 thousand in 2024[32]. - The effective tax rate for the six months ended fiscal September 2025 was adjusted to 26.0%, down from 27.1% for the same period in 2024[46]. Transition and Optimization Costs - Transition costs related to back-office optimization remained consistent at $0.03 million for both periods[44]. - The write-off of debt issuance costs was $0.01 million for the six months ended fiscal September 2025, with no such costs in the prior year[44]. - The net gain on the sale of the corporate headquarters was $(0.06) million in the prior year, with no gain recorded in the current period[45].