Monro Inc. on Wednesday reported record first-quarter sales, beating analysts’ estimates.
For the first quarter ended June 26, the Rochester-based automotive undercar repair company reported a more than 38 percent increase in revenue to $341.8 million. The company attributed the increase to a 34.5 percent increase in comparable-store sales and an increase in sales from new stores.
Net income for the quarter was $15.7 million, compared with $3 million in the year-ago quarter. On a per-share basis, GAAP earnings were 46 cents, compared with 9 cents in the first quarter of fiscal 2021. Analysts had expected earnings of 53 cents on sales of $328.17 million.
“Monro’s solid first-quarter results are a testament to the strong execution of our teammates, paired with the continued progress we have made on our Monro.Forward initiatives to enhance our competitive position and capitalize on the strengthening demand environment,” said Monro President and CEO Mike Broderick. “We delivered double-digit comparable store sales growth across all our regions driven by strength in our services categories. We are pleased to see this momentum continue into our second quarter to date with comparable-store sales up approximately 15 percent in fiscal July and we are excited about the significant opportunities that lie ahead of us.”
During the first quarter, Monro opened 30 stores and closed two. The company ended the quarter with 1,291 company-operated stores and 91 franchised locations.
“Looking ahead, we are confident that our focus on operational excellence and customer-centric approach will be instrumental in unlocking the full potential of our Monro.Forward strategy. Importantly, our commitment to our teammates will be critical to further solidify our position as a field-led, best-in-class service organization to drive sustainable growth,” Broderick said. “Lastly, our proven business model and financial flexibility position us well to capitalize on additional market share opportunities through strategic and value-accretive acquisitions and greenfield expansion to deliver long-term shareholder value.”
Monro ended the quarter with cash and cash equivalents of roughly $17 million and availability on its revolving credit facility of some $372 million.
“In fiscal 2022, we continue to expect approximately $15 million to $20 million in structural cost savings, in addition to $5 million in benefits from store closures compared to fiscal 2020,” said Brian D’Ambrosia, company CFO. “In addition, we remain focused on working capital improvement and we believe we have additional opportunity in this area.”
Monro declined to offer full-year guidance due to the fluid nature of the pandemic, but D’Ambrosia said the company expects comparable store sales growth to moderate compared with first-quarter results, and Monro expects to spend some $30 million to $45 million in capital expenditures during fiscal 2022.
“We expect tire and oil costs to increase year-over-year. And in light of cost increases in general inflation in the current environment, we’ll continue to leverage our diversified supply chain and cost leadership position,” D’Ambrosia added. “We have a successful track record of operating in an inflationary environment while maintaining and expanding gross margins.”
Separately, Monro recently released its inaugural Corporate Responsibility Report, Monro.Forward Responsibly, covering fiscal 2021. The report is available on the company’s corporate website.
Shares of company stock (Nasdaq: MNRO) Wednesday afternoon were down more than 7 percent to $59.
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