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]