Monro's Q3 Earnings & Revenues Miss Estimates, Sales Decline 3.7% Y/Y

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]