Summary of Monro (MNRO) FY Conference Call - June 10, 2025 Company Overview - **Company**: Monro, Inc. (MNRO) - **Industry**: Automotive service and tire retail Key Highlights from Quarterly Results - **Comp Store Sales Growth**: Achieved a positive comp store sales growth of **2.8%** adjusted for the previous year's 53-week period [4][5] - **Traffic Trends**: Notable year-over-year increase in traffic starting in March, continuing into April and May [5][6] - **Gross Margin Pressure**: Experienced a **250 basis points** deleverage on gross margin due to extreme weather impacting store traffic and closures [5][6] - **Sales Momentum**: Continued mid-single-digit comp store sales growth in April and May, supported by improved traffic trends [6][10] Management Changes - **New CEO**: Peter Fitzsimmons appointed as CEO, focusing on a performance improvement plan to enhance operations and drive shareholder returns [12][13] - **Leadership Engagement**: Fitzsimmons has been actively engaging with senior leadership and visiting stores to assess opportunities [14][15] Store Closures - **Underperforming Stores**: Announced the closure of **145 underperforming stores**, which represent about **5%** of total sales, equating to approximately **$45 million** in sales reduction for FY 2026 [19][21] - **Closure Costs**: Expected closure costs between **$10 million to $15 million** in Q1 FY 2026 [22] Growth Strategy - **Acquisition Pause**: The company has been on pause regarding acquisitions for the past two years, focusing on internal improvements and operational efficiency [24][26] - **Future Growth**: Plans to leverage improvements for future unit and store location growth, although no specific timeline is set for this growth [26][28] Competitive Landscape - **Fragmented Industry**: The automotive service industry is highly fragmented, with a focus on local consumer experience [29][30] - **Competitive Advantages**: Monro leverages its scale for better pricing and service delivery, investing in technician training and promotional offerings [30][31] Consumer Offering Enhancements - **Tire Assortment Simplification**: Efforts to streamline tire offerings to improve in-store customer experience and operational efficiency [34][36] Tariff Implications - **Cost Increases**: Anticipates cost increases across major product categories due to tariffs, leading to potential price adjustments for consumers [37][38] - **Negotiation Efforts**: Mobilized a team to negotiate with suppliers to mitigate tariff impacts [38][41] Capital Investment and Cash Flow - **Investment Needs**: Capital investments projected between **$25 million to $35 million** for FY 2026, focusing on maintenance and technology projects [43][44] - **Cash Generation**: Expected to generate sufficient cash flow to meet capital allocation priorities, including **$40 million** in finance lease payments and a **$35 million** dividend [46][47] Conclusion - **Short-term Momentum**: The company is experiencing positive momentum and is focused on initiatives to support profitability and sales growth in FY 2026 [48][49]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...