Monro sales, earnings fall in Q1

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Monro Inc. on Wednesday reported a 22 percent drop in sales and an 87 percent plunge in earnings in the first quarter.

For the quarter ended March 27, the Rochester-based undercar repair and tire service company reported revenues of $247.1 million, down from $317.1 million in the year-ago quarter. The decline was driven by a comparable store sales decline of nearly 26 percent, partially offset by sales from new stores of $12.7 million.

Net income for the first quarter of fiscal 2021 was $3 million, compared with $22.6 million in the same period last year. Diluted earnings per share were 9 cents, compared with 67 cents in the first quarter of fiscal 2020. Adjusted diluted earnings per share were 15 cents, which excluded 6 cents per share of planned store closing costs. That compares with 69 cents adjusted diluted earnings in the year-ago quarter.

During the first quarter, Monro closed 36 stores, ending the quarter with 1,247 company-operated stores and 97 franchised locations.

“Our first-quarter performance demonstrates solid execution despite the unprecedented challenges related to the COVID-19 pandemic, and I would like to thank all of our Monro teammates for their hard work and dedication to safely serving our customers. In-line with our expectations, April represented a low point in our sales performance, with May and June improving sequentially as government restrictions gradually abated through the quarter,” said Monro President and CEO Brett Ponton. “Since the beginning of the pandemic, we have taken a number of proactive steps to mitigate near-term headwinds while maintaining our focus on our Monro.

“Forward initiatives, including our technology-based store staffing model and our tire category management and pricing system, and are pleased that these efforts have begun to bear fruit. In addition to streamlining our operations, we have redirected our marketing efforts towards higher ROI digital channels and made strategic investments in technology, which we believe have been critical in helping us navigate the current environment.”

Officials said the company has completed the rollout of its collaboration with Amazon.com to provide tire installation services at all of its retail tire and automotive service locations across 32 states. Monro’s collaboration with Amazon.com is a key component of its omni-channel strategy to drive improved customer-centric engagement.

Due to the ongoing uncertainty caused by COVID-19, Monro is not offering fiscal 2021 guidance.

“Despite the challenges presented by COVID-19, we are encouraged by the outperformance of our rebranded stores during the first quarter, reinforcing our confidence in our store rebrand and reimage initiative,” Ponton said. “Our solid financial position will allow us to gradually resume this program in the second quarter as we continue our disciplined approach to capital allocation.

“Overall, we remain focused on the aspects of our business within our control, and we believe that the continued execution of our Monro.Forward strategy will enable us to emerge stronger following this pandemic and drive long-term value creation.”

Shares of company stock (Nasdaq: MNRO) were trading down nearly 2 percent at $60.08 midday Wednesday.

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