- Third Quarter Sales Decreased to $317.7 Million
- Third Quarter Comparable Store Sales Decreased 6.1%
- Third Quarter Diluted EPS of $.38; Adjusted Diluted EPS1 of
$.39
- Generated Cash from Operating Activities of $130 Million for
the First Nine Months of Fiscal 2024
- Repurchased ~1.5M Shares of Common Stock at an Average Price of
$28.50 for $44 Million
- Distributed Third Quarter Fiscal 2024 Cash Dividend of $.28 per
Share
Monro, Inc. (Nasdaq: MNRO), a leading provider of automotive
undercar repair and tire services, today announced financial
results for its third quarter ended December 23, 2023.
Third Quarter Results
Sales for the third quarter of the fiscal year ending March 30,
2024 (“fiscal 2024”) decreased 5.2% to $317.7 million, as compared
to $335.2 million for the third quarter of the fiscal year ended
March 25, 2023 (“fiscal 2023”). Comparable store sales decreased
6.1% for the period due to milder weather as well as a pressured
low-to-middle income consumer that continued to defer purchases in
the Company’s high-ticket tire category. This compares to an
increase in comparable store sales of 5.6% in the prior year
period. Sales from new stores increased $1.0 million, primarily
from recent acquisitions.
Comparable store sales decreased approximately 1% for brakes, 3%
for maintenance services, 5% for alignments and front end/shocks,
and 9% for tires compared to the prior year period. Comparable
store sales were flat for batteries compared to the prior year
period. Please refer to the “Comparable Store Sales” section below
for a discussion of how the Company defines comparable store
sales.
Gross margin increased 170 basis points compared to the prior
year period, primarily resulting from lower material costs as a
percentage of sales and lower technician labor costs as a
percentage of sales, which were partially offset by higher
distribution and occupancy costs as a percentage of sales.
Total operating expenses for the third quarter of fiscal 2024
were $91.3 million, or 28.7% of sales, as compared to $89.6
million, or 26.7% of sales in the prior year period. The increase
as a percentage of sales was principally due to lower
year-over-year comparable store sales.
Operating income for the third quarter of fiscal 2024 was $21.4
million, or 6.7% of sales, as compared to $23.8 million, or 7.1% of
sales in the prior year period.
Interest expense was $5.0 million for the third quarter of
fiscal 2024, as compared to $5.9 million for the third quarter of
fiscal 2023, principally due to a decrease in weighted average
debt.
Income tax expense in the third quarter of fiscal 2024 was $4.2
million, or an effective tax rate of 25.8%, compared to $5.0
million, or an effective tax rate of 27.6% in the prior year
period.
Net income for the third quarter of fiscal 2024 was $12.2
million, as compared to $13.0 million in the same period of the
prior year. Diluted earnings per share for the third quarter of
fiscal 2024 was $.38, compared to $.41 in the third quarter of
fiscal 2023. Adjusted diluted earnings per share, a non-GAAP
measure, for the third quarter of fiscal 2024 was $.39. This
compares to adjusted diluted earnings per share of $.43 in the
third quarter of fiscal 2023. Please refer to the reconciliation of
adjusted diluted earnings per share in the table below for details
regarding excluded items in the third quarters of fiscal 2024 and
2023. Please refer to the “Non-GAAP Financial Measures” section
below for a discussion of this non-GAAP measure.
Monro ended the quarter with 1,296 company-operated stores and
51 franchised locations.
“Our third quarter comparable store sales decline of
approximately 6% was due to milder weather as well as a pressured
low-to-middle income consumer that continued to defer purchases in
our high-ticket tire category. This was clearly evidenced by an
industry-wide slowdown in tire unit sales in the regions of the
country where a vast majority of our store footprint is
concentrated. This led to pressured store traffic, which was not
supportive to sales of our higher-margin service categories in the
quarter. While our tire units were down approximately 14%,
leveraging the strength of our manufacturer-funded promotions
allowed us to optimize our assortment for improved tire
profitability in the quarter. And, while continued consumer trade
down dynamics led to a higher proportion of lower-margin opening
price point tires within overall industry unit sales, we remained
focused on maintaining a healthy mix of opening price point tires
in the quarter. Encouragingly, based on retail sell-out data from
Torqata, a subsidiary of American Tire Distributors, our tire
market share remained broadly in-line with the overall market in
our higher-margin tiers. We continued to mitigate the impact of
this industry-wide slowdown with actions to reduce non-productive
labor costs, including overtime hours in our stores. Despite a
tough macro-economic environment, the resiliency of our business
model and the actions that we’ve taken allowed us to expand gross
margin in the quarter. While our preliminary comparable store sales
for fiscal January are down approximately 6% due to softness in the
first half of the month, comparable store sales have accelerated
materially in the last two weeks with the return of normal seasonal
weather. Given the current pressures on the consumer, we no longer
expect to grow full-year sales, but we do expect diluted earnings
per share to be higher versus prior year. This will be driven by
actions we’ve taken to successfully re-position our cost structure
as well as expanding our gross margin through properly training our
Teammates to maximize their productivity and optimizing our tire
assortment for improved profitability. We will continue to remain
relentlessly focused on improving our 300 small or underperforming
stores, maintaining a balanced approach between our tire and
service categories with competitive pricing to drive store traffic
and continuously improving our customer experience. In addition, we
will continue to create cash by optimizing inventory and leveraging
the strength of our vendor partners for better availability,
quality and cost of parts and tires in our stores”, said Mike
Broderick, President and Chief Executive Officer.
Broderick continued, “Despite the challenges posed by the
current macro-economic environment, our business continues to be
well-positioned, and we are confident that we remain on a path to
restore our gross margins back to pre-COVID levels with
double-digit operating margins over the longer-term.”
First Nine Months
Results2
For the current nine-month period:
- Sales decreased 4.7% to $966.7 million from $1,014.5 million in
the same period of the prior year. Comparable store sales decreased
2.7%, compared to increases of 2.3% for total company and 3.3% for
Retail locations in the prior year period.
- Gross margin for the nine-month period was 35.4%, compared to
34.7% in the prior year period.
- Operating income was 6.3% of sales, compared to 7.3% in the
prior year period.
- Net income for the first nine months of fiscal 2024 was $33.9
million, or $1.05 per diluted share, as compared to $38.6 million,
or $1.17 per diluted share in the prior year period.
- Adjusted diluted earnings per share, a non-GAAP measure, in the
first nine months of fiscal 2024 was $1.11. This compares to
adjusted diluted earnings per share of $1.27 in the first nine
months of fiscal 2023. Please refer to the reconciliation of
adjusted diluted earnings per share in the table below for details
regarding excluded costs in the first nine months of fiscal 2024
and 2023. Please refer to the “Non-GAAP Financial Measures” section
below for a discussion of this non-GAAP measure.
Strong Financial
Position
During the first nine months of fiscal 2024, the Company
generated operating cash flow of approximately $130 million. As of
December 23, 2023, the Company had cash and cash equivalents of
approximately $24 million and availability on its revolving credit
facility of approximately $476 million.
Third Quarter Fiscal 2024 Cash
Dividend
On December 19, 2023, the Company paid a cash dividend for the
third quarter of fiscal 2024 of $.28 per share.
Share Repurchases
During the third quarter of fiscal 2024, the Company continued
executing on its share repurchase program, which authorizes the
Company to repurchase up to $150 million of its common stock. The
Company repurchased approximately 1.5 million shares of its common
stock at an average price of $28.50 for approximately $44 million
during the third quarter of fiscal 2024. In total, the Company has
repurchased approximately 3.7 million shares at an average price of
$37.61 for approximately $141 million under the current
authorization from the Company’s Board of Directors.
The method, timing and actual number of shares repurchased will
depend on a variety of factors, including price, general business
and market conditions, alternative investment opportunities, and
legal requirements.
The Company’s repurchase program has no expiration date, does
not require the purchase of any minimum number of shares and may be
suspended, modified or discontinued at any time without prior
notice.
Company Outlook
Monro is not providing fiscal 2024 financial guidance at this
time but will provide perspective on its outlook for fiscal 2024
during its earnings conference call.
Earnings Conference Call and
Webcast
The Company will host a conference call and audio webcast on
Wednesday, January 24, 2024 at 8:30 a.m. Eastern Time. The
conference call may be accessed by dialing 1-833-470-1428 and using
the required access code of 849052. A replay will be available
approximately two hours after the recording through Wednesday,
February 7, 2024 and can be accessed by dialing 1-866-813-9403 and
using the required access code of 823808. A replay can also be
accessed via audio webcast at the Investors section of the
Company’s website, located at corporate.monro.com/investors.
About Monro, Inc.
Monro, Inc. (NASDAQ: MNRO) is one of the nation’s leading
automotive service and tire providers, delivering best-in-class
auto care to communities across the country, from oil changes,
tires and parts installation, to the most complex vehicle repairs.
With a growing market share and a focus on sustainable growth, the
Company generated approximately $1.3 billion in sales in fiscal
2023 and continues to expand its national presence through
strategic acquisitions and the opening of newly constructed stores.
Across approximately 1,300 stores and 9,000 service bays
nationwide, Monro brings customers the professionalism and
high-quality service they expect from a national retailer, with the
convenience and trust of a neighborhood garage. Monro’s highly
trained teammates and certified technicians bring together hands-on
experience and state-of-the-art technology to diagnose and address
automotive needs every day to get customers back on the road
safely. For more information, please visit corporate.monro.com.
Cautionary Note Regarding
Forward-Looking Statements
The statements contained in this press release that are not
historical facts may contain statements of future expectations and
other forward-looking statements made pursuant to the Safe Harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by such words and
phrases as “expect,” “estimate,” “outlook,” “strive,” “anticipate,”
“believe,” “could,” “may,” “will,” and other similar words or
phrases. Forward-looking statements are subject to risks,
uncertainties and other important factors that could cause actual
results to differ materially from those expressed. These factors
include, but are not necessarily limited to product demand,
dependence on and competition within the primary markets in which
the Company’s stores are located, the need for and costs associated
with store renovations and other capital expenditures, realizing
the anticipated benefits of the divestiture of the Company’s
wholesale tire and distribution assets, the effect of general
business or economic and geopolitical conditions on the Company’s
business, including consumer spending levels, inflation, and
unemployment, seasonality, changes in the U.S. trade environment,
including the impact of tariffs on products imported from China,
the impact of competitive services and pricing, product
development, parts supply restraints or difficulties, the impact of
weather trends and natural disasters, industry regulation, risks
relating to leverage and debt service (including sensitivity to
fluctuations in interest rates), continued availability of capital
resources and financing, risks relating to protection of customer
and employee personal data, risks relating to litigation, risks
relating to integration of acquired businesses and other factors
set forth elsewhere herein and in the Company’s Securities and
Exchange Commission filings, including the Company’s annual report
on Form 10-K for the fiscal year ended March 25, 2023. Except as
required by law, the Company does not undertake and specifically
disclaims any obligation to update any forward-looking statement to
reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.
Non-GAAP Financial
Measures
In addition to reporting diluted earnings per share (“EPS”),
which is a generally accepted accounting principles (“GAAP”)
measure, this press release includes adjusted diluted EPS, which is
a non-GAAP financial measure. The Company has included a
reconciliation from adjusted diluted EPS to its most directly
comparable GAAP measure, diluted EPS. Management views this
non-GAAP financial measure as a way to better assess comparability
between periods because management believes the non-GAAP financial
measure shows the Company’s core business operations while
excluding certain non-recurring items such as costs related to
shareholder matters from the Company’s equity capital structure
recapitalization, transition costs related to the Company’s
back-office optimization, corporate headquarters relocation costs,
and items related to store closings, as well as acquisition
initiatives.
This non-GAAP financial measure is not intended to represent,
and should not be considered more meaningful than, or as an
alternative to, its most directly comparable GAAP measure. This
non-GAAP financial measure may be different from similarly titled
non-GAAP financial measures used by other companies.
Comparable Store Sales
The Company defines comparable store sales as sales for
locations that have been opened or owned at least one full fiscal
year. The Company believes this period is generally required for
new store sales levels to begin to normalize. Management uses
comparable store sales to assess the operating performance of the
Company’s stores and believes the metric is useful to investors
because the Company’s overall results are dependent upon the
results of its stores.
Source: Monro, Inc. MNRO-Fin
MONRO, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in
thousands)
Quarter
Ended Fiscal
December
2023
2022
%
Change
Sales
$
317,653
$
335,193
(5.2
)%
Cost of sales, including
distribution and occupancy costs
204,976
221,742
(7.6
)%
Gross profit
112,677
113,451
(0.7
)%
Operating, selling, general and
administrative expenses
91,294
89,605
1.9
%
Operating income
21,383
23,846
(10.3
)%
Interest expense, net
5,043
5,949
(15.2
)%
Other income, net
(62
)
(98
)
(36.7
)%
Income before income taxes
16,402
17,995
(8.9
)%
Provision for income taxes
4,232
4,961
(14.7
)%
Net income
$
12,170
$
13,034
(6.6
)%
Diluted earnings per share
$
0.38
$
0.41
(7.3
)%
Weighted average number of
diluted shares outstanding
32,188
31,985
Number of stores open (at end of
quarter)
1,296
1,296
MONRO, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in
thousands)
Nine
Months Ended Fiscal
December
2023
2022
%
Change
Sales
$
966,712
$
1,014,546
(4.7
)%
Cost of sales, including
distribution and occupancy costs
624,666
662,171
(5.7
)%
Gross profit
342,046
352,375
(2.9
)%
Operating, selling, general and
administrative expenses
280,959
278,802
0.8
%
Operating income
61,087
73,573
(17.0
)%
Interest expense, net
15,052
17,312
(13.1
)%
Other income, net
(153
)
(275
)
(44.4
)%
Income before income taxes
46,188
56,536
(18.3
)%
Provision for income taxes
12,317
17,897
(31.2
)%
Net income
$
33,871
$
38,639
(12.3
)%
Diluted earnings per share
$
1.05
$
1.17
(10.3
)%
Weighted average number of
diluted shares outstanding
32,142
32,890
MONRO, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
December
23,
2023
March
25,
2023
Assets
Cash and equivalents
$
23,846
$
4,884
Inventories
160,360
147,397
Other current assets
87,488
106,186
Total current assets
271,694
258,467
Property and equipment, net
284,563
304,989
Finance lease and financing
obligation assets, net
189,774
217,174
Operating lease assets, net
205,244
211,101
Other non-current assets
781,822
785,146
Total assets
$
1,733,097
$
1,776,877
Liabilities and Shareholders’
Equity
Current liabilities
$
486,632
$
449,177
Long-term debt
94,000
105,000
Long-term finance leases and
financing obligations
259,794
295,281
Long-term operating lease
liabilities
184,777
191,107
Other long-term liabilities
48,176
41,390
Total liabilities
1,073,379
1,081,955
Total shareholders’ equity
659,718
694,922
Total liabilities and
shareholders’ equity
$
1,733,097
$
1,776,877
MONRO, INC.
Reconciliation of Adjusted
Diluted Earnings Per Share (EPS)
(Unaudited)
Quarter Ended Fiscal
December
2023
2022
Diluted EPS
$
0.38
$
0.41
Net loss on sale of wholesale
tire and distribution assets (a)
0.01
−
Store closing costs
−
−
Monro.Forward initiative
costs
−
−
Litigation reserve/settlement
costs
−
0.01
Costs related to shareholder
matters
−
0.01
Transition costs related to
back-office optimization
−
−
Corporate headquarters relocation
costs
−
−
Adjusted Diluted EPS
$
0.39
$
0.43
Supplemental Reconciliation of
Adjusted Net Income
(Unaudited)
(Dollars in Thousands)
Quarter Ended Fiscal
December
2023
2022
Net Income
$
12,170
$
13,034
Net loss on sale of wholesale
tire and distribution assets (a)
304
−
Store closing costs
(30
)
6
Monro.Forward initiative
costs
−
68
Litigation reserve/settlement
costs
−
450
Costs related to shareholder
matters
80
236
Transition costs related to
back-office optimization
58
−
Corporate headquarters relocation
costs
95
−
Provision for income taxes on
pre-tax adjustments (b)
(131
)
(191
)
Adjusted Net Income
$
12,546
$
13,603
MONRO, INC.
Reconciliation of Adjusted
Diluted Earnings Per Share (EPS)
(Unaudited)
Nine Months Ended
Fiscal
December
2023
2022
Diluted EPS
$
1.05
$
1.17
Net loss/(gain) on sale of
wholesale tire and distribution assets (a)
0.01
(0.05
)
Store closing costs
−
0.01
Monro.Forward initiative
costs
−
−
Acquisition due diligence and
integration costs
−
−
Litigation reserve/settlement
costs
−
0.01
Management
restructuring/transition costs
−
0.03
Costs related to shareholder
matters
0.03
0.02
Transition costs related to
back-office optimization
0.01
−
Corporate headquarters relocation
costs
−
−
Certain discrete tax items
(c)
−
0.08
Adjusted Diluted EPS
$
1.11
$
1.27
Note: The calculation of the
impact of non-GAAP adjustments on diluted EPS is performed on each
line independently. The table may not add down by +/- 0.01 due to
rounding.
Supplemental Reconciliation of
Adjusted Net Income
(Unaudited)
(Dollars in Thousands)
Nine Months Ended
Fiscal
December
2023
2022
Net Income
$
33,871
$
38,639
Net loss/(gain) on sale of
wholesale tire and distribution assets (a)
304
(1,968
)
Store closing costs
(26
)
232
Monro.Forward initiative
costs
−
110
Acquisition due diligence and
integration costs
5
(9
)
Litigation reserve/settlement
costs
−
450
Management
restructuring/transition costs
−
1,338
Costs related to shareholder
matters
1,355
553
Transition costs related to
back-office optimization
699
-
Corporate headquarters relocation
costs
155
-
Provision for income taxes on
pre-tax adjustments (b)
(637
)
(178
)
Certain discrete tax items
(c)
−
2,644
Adjusted Net Income
$
35,726
$
41,811
a)
Amount includes loss/(gain) on
sale of a related warehouse, net of associated closing costs.
b)
The Company determined the
Provision for income taxes on pre-tax adjustments by calculating
the Company’s estimated annual effective tax rate on pre-tax income
before giving effect to any discrete tax items and applying it to
the pre-tax adjustments.
c)
Amount relates to the sale of
wholesale tire locations and distribution assets, as well as the
revaluation of deferred tax balances due to changes in the mix of
pre-tax income in various U.S. state jurisdictions as a result of
the sale.
_________________________
1 Adjusted diluted EPS is a
non-GAAP measure. Please refer to the “Non-GAAP Financial Measures”
section below for a discussion of this non-GAAP measure.
2 Financial performance includes
the results of the divested Wholesale and tire distribution assets
for fiscal 2023 through June 16.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240124223874/en/
Investors and Media: Felix Veksler Senior Director, Investor
Relations ir@monro.com
Monro (NASDAQ:MNRO)
Gráfica de Acción Histórica
De Ago 2024 a Sep 2024
Monro (NASDAQ:MNRO)
Gráfica de Acción Histórica
De Sep 2023 a Sep 2024