The new $600 million revolving line of credit amends and extends an existing $600 million credit facility and will be used to refinance debt, fund acquisitions and for general corporate purposes.
Citizens was lead left arranger, bookrunner and administrative agent in the nine-bank group.
Founded in 1957, Monro provides a range of automotive undercar repair and tire services in the United States.
The company operates more than 1,300 stores and 80 franchised locations in 32 states, serving the Mid-Atlantic and New England regions and portions of the Great Lakes, Midwest and Southeast.
“The Monro management team has established a durable track record of performance focusing on their customers, their colleagues and communities,” said Jerry Sargent, Northeast regional executive for Citizens, in a statement.
On Oct. 27, the Rochester-based firm reported a drop in year-over-year second-quarter sales as consumers opted for lower-priced tire options and put off undercar maintenance.
Sales dipped 5.1 percent to $329.8 million, compared to $347.7 million for the second quarter of the prior year. The total sales decline of $17.9 million was due primarily to the divestiture of the company’s wholesale tire and distribution assets.
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.
Monro Inc. this week reported a fourth-quarter improvement in sales, income and earnings, beating Street estimates.
For the quarter ended March 27, the automotive undercar repair and tire services provider posted a 6.8 percent increase in revenue to $305.5 million from $286.1 million in the fourth quarter of fiscal 2020. Net income for the fourth quarter was $11.8 million, compared with a net loss of $3.8 million in the year-ago quarter. On a per-share basis, diluted earnings were 35 cents, up from a diluted loss per share of 12 cents in the same quarter last year.
Earnings beat analyst expectations by 9 cents, while sales beat Street expectations by $8.15 million.
The total sales increase for the fourth quarter of $19.4 million resulted from a comparable store sales increase of 9.4 percent for the period and an increase in sales from new stores of $5.1 million, including sales from recent acquisitions of $4.6 million. Those sales were offset partially by a decrease in sales of $5.9 million from closed stores.
“Monro’s solid fourth-quarter results capped an unprecedented and challenging year and I am proud of our team who demonstrated exceptional resilience and commitment to safely serving our customers. I am excited to build on the tremendous progress that Monro has achieved over the past year advancing its transformation initiatives, said newly-appointed President and CEO Mike Broderick. “As we enter fiscal 2022, we look forward to continuing to build on the momentum we experienced during our fourth quarter. We are well-positioned to capitalize on the strengthening demand environment, as reflected in our comparable store sales growth of approximately 53 percent in the fiscal 2022 first quarter-to-date.”
Sales for fiscal 2021 decreased 10.4 percent to $1.126 billion from $1.257 billion in fiscal 2020. Comparable store sales were down 11.1 percent, compared with a decrease of 2.3 percent in the prior year. Sales for fiscal 2021 were negatively impacted by the pandemic, officials noted.
Net income for fiscal 2021 was $34.3 million, or $1.01 per diluted share, compared with $58 million, or $1.71 per diluted share in fiscal 2020. Adjusted diluted earnings per share in fiscal 2021 were $1.14.
Monro completed the previously announced acquisition of 30 Mountain View Tire & Service retail stores located in the Los Angeles area, further expanding the company’s geographic footprint on the West Coast. The acquisition is expected to add roughly $45 million in annualized sales, representing a sales mix of 70 percent service and 30 percent tires. On a combined basis, acquisitions completed and announced in fiscal 2021 represent an expected total of $65 million in annualized sales.
Monro also said that its board of directors has approved a 2 cents per share increase in the company’s cash dividend for the first quarter of fiscal year 2022 to 24 cents per share, representing an increase of 9 percent from the 22 cents per share cash dividend paid in the first quarter of fiscal 2021. The company has increased its cash dividend 15 times during the 16 years since a cash dividend was first issued. The dividend is payable on June 21, 2021, to shareholders of record at the close of business on June 7, 2021.
“Looking ahead, our focus on operational excellence will be instrumental to unlock the full potential of our Monro.Forward initiatives. In addition, we remain well-positioned to take advantage of attractive consolidation opportunities in our fragmented industry and have successfully completed the acquisition of 30 Mountain View Tire & Service stores in California. Now with a total of 116 stores in the Western region, we are particularly excited about Monro’s growth prospects in this attractive and dynamic market,” Broderick said. “Importantly, our strategy is underpinned by a rigorous financial discipline and strong balance sheet, which we believe provide us with ample financial flexibility to execute our growth initiatives and deliver long-term sustainable value for all our stakeholders.”
Shares of company stock (Nasdaq: MNRO) were down nearly 3 percent Thursday morning to $64.14.
Monro Inc. has selected an industry veteran as its next president and CEO.
Michael Broderick will take the helm of the automotive undercar repair and tire services provider on April 5. He most recently served as executive vice president of merchandising and store operations support at Advance Auto Parts, where he played a critical role in driving same-store sales growth and operational improvements.
“I am thrilled to join this impressive and experienced leadership team, and look forward to building upon the company’s Monro.Forward strategy to unlock its full potential,” Broderick said. “With strong cash flow and a solid balance sheet, Monro is well-positioned to execute its transformational initiatives and capitalize on attractive acquisition opportunities to drive sustainable growth. This is an exciting time to join Monro, which has grown into a leading U.S. automotive service and tire company with coast-to-coast presence and a solid foundation to create long-term value for all stakeholders.”
Broderick brings more than a quarter of a century of experience executing profitable growth and business transformation strategies in the aftermarket parts and tire service industry. Robert Mellor, who has served as interim CEO since Brett Ponton’s department in August 2020, will continue in his role as Monro’s chairman of the board.
“Mike is uniquely qualified to lead Monro through the next phase of our transformation as we continue to build a strong, scalable platform for sustainable growth,” Mellor said. “He has a proven track record of delivering superior performance at large, complex organizations, driving profitable growth through technology-driven strategies, and fostering an inclusive work environment. We are pleased to welcome Mike to Monro and look forward to his leadership, honed by his decades of executive and operational experience in the automotive aftermarket industry.”
While at Advance Auto Parts, Broderick was responsible for improving sales performance across its core channels and increasing profitability by implementing technology-driven strategies to enhance operational efficiency. He also played a key role in the diversity and inclusion efforts focused on promoting women’s leadership in the automotive aftermarket industry.
Prior to joining Advance Auto Parts, Broderick served as senior vice president of the automotive division of Canadian Tire Corp., where he successfully developed and executed strategies to accelerate the growth of the company’s most profitable business, including driving record financial performance. In this role, he also was responsible for improving customer service standards at 493 dealers, operating 5,800 service bays.
Prior to Canadian Tire, Broderick was CEO of Federal Mogul Corp., where he orchestrated a successful turnaround strategy to reverse a multi-year decline in performance and developed the company’s global sales and distribution strategy. Broderick also was a president at General Parts, where he played a major role in transforming and optimizing business operations, including driving cost and process improvements.
Broderick began his career at AutoZone, where he served for 16 years in multiple field and operations roles of increasing responsibility, including serving as vice president for the company’s Northeast division.
Monro Inc. said Wednesday that it has acquired California-based Mountain View Tire & Service Inc. Financial details of the acquisition were not disclosed.
The acquisition includes 30 Mountain View Tire & Auto Service retail stores located in the Los Angeles area, furthering the company’s geographic footprint in California. Monro plans to continue to operate all of Mountain’s locations.
“We are pleased to announce the acquisition of Mountain View Tire & Service, which builds on our growing presence in the dynamic Western United States. Executing on strategically located acquisitions is a critical cornerstone of our growth strategy, and this announcement underscores the progress we have made on capitalizing on attractive opportunities in our fragmented industry. We are excited to welcome Mountain View to the Monro family,” Monro Chairman and interim CEO Robert Mellor said in a statement.
The deal is expected to close in the first quarter of fiscal 2022 and add roughly $45 million in annualized sales, representing a sales mix of 70 percent service and 30 percent tires. On a combined basis, acquisitions completed and announced to date in fiscal 2021 represent an expected total of $65 million in annualized sales.
“We are thrilled and proud to have selected Monro, a company that shares Mountain View’s core values to always put the customer first and provide the highest level of informed, dedicated and trusted service, to continue Mountain View’s journey. I look forward to a bright future under Monro’s ownership,” said Mountain View CEO and President Nick Mitsos.
Founded in Rochester, Monro is a chain of nearly 1,300 company-operated stores, 96 franchised locations, seven wholesale locations and three retread facilities that provides automotive undercar repair and tire sales and services. The company operates in 32 states.
Shares of company stock (Nasdaq: MNRO) were down slightly from Tuesday’s close at $68.13 in lighter than usual trading Wednesday.
Monro Inc. on Wednesday reported a nearly 65 percent drop in third-quarter earnings and a 14 percent drop in sales, driven primarily by significant declines in maintenance and brake services.
For the quarter ended Dec. 26, 2020, the Rochester-based undercar repair and tire services company reported revenue of $284.6 million, down 13.6 percent from $329.3 million in the third quarter last year. Net income for the quarter fell to $6.7 million from $18.9 million in the year-ago quarter. Adjusted earnings for the quarter fell to 22 cents from 60 cents in the same quarter last year.
Analysts’ expectations for earnings ranged from 38 to 43 cents per share on sales of $299.42 million.
Comparable store sales — or sales at stores open for at least one year — fell 13 percent, including an 8 percent drop for tires, 16 percent for alignments, 17 percent for front end/shocks, 19 percent for maintenance services and 21 percent for brakes compared to the prior-year period.
“Our results for the third quarter were impacted by general market conditions and lower labor productivity levels, particularly in the first two months of the quarter. After proactively decreasing staffing at the outset of the COVID-19 pandemic, we quickly ramped up staffing in our stores over the past two quarters as demand returned. As a result, we added approximately 700 new teammates since July that required time to fully ramp,” said Chairman and Interim CEO Robert Mellor. “Improving market conditions, as well as the successful onboarding and training of our new teammates led to improved top-line performance in December, which posted the best comparable-store sales since the beginning of the pandemic. This has continued into January with a comparable store sales increase of 3 percent.”
Total operating expenses in the quarter decreased $12.3 million to $80.5 million, or 28.3 percent of sales, compared with $92.8 million, or 28.2 percent of sales in the prior-year period. The year-over-year dollar decrease primarily resulted from targeted cost reductions and lower expenses from 29 fewer stores compared to the prior-year period, company officials reported.
During the third quarter, Monro opened 19 company-operated stores, while temporarily closing one store as a result of storm damage and permanently closing one franchise location. Additionally, four company-operated stores remain temporarily closed as a result of damage sustained during Hurricane Laura in Louisiana and Tropical Storm Isaias in the Northeast. Monro ended the quarter with 1,260 company-operated stores and 96 franchised locations.
“We remain financially strong and well-positioned to execute against all of our growth initiatives and made significant progress during the third quarter,” Mellor said. “Importantly, we substantially completed the transformation of 104 stores and our rebranded and reimaged stores continue to outperform our chain average. Additionally, we completed the rollout of our store staffing and scheduling optimization tool and tire category management and pricing system, both of which are instrumental in driving profitable growth. Our initiatives are working and we look forward with confidence in our business.”
During the first nine months of fiscal 2021, the company generated roughly $159 million in operating cash flow, compared with $126 million for the same period last year. Monro’s strong cash flow allows the company to support its business operations and Monro.Forward initiatives as well as invest in attractive acquisition opportunities intended to drive long-term growth, while paying down debt and returning cash to shareholders through its dividend program, officials said.
The company completed the previously announced acquisition of 17 stores in Southern California, further expanding Monro’s geographic footprint in the West Coast region. The locations are expected to add some $20 million in annualized sales.
Monro did not provide fiscal 2021 guidance.
Shares of company stock (Nasdaq: MNRO) were down more than 3 percent to $54.68 in midday trading Wednesday.
Monro Inc. on Wednesday reported a drop in second-quarter sales and earnings, blaming a reduction in traffic due to COVID-19.
For the quarter ended March 27, the Rochester-based automotive undercar repair and tire company reported revenue of $288.6 million, down 11 percent from $324.1 million in the second quarter last year. The total sales decrease was driven by a comparable store sales decline of 11.4 percent, as well as from closed stores, officials said.
Net income for the quarter was $12.8 million, compared with $20.3 million in the same quarter last year. Diluted earnings per share were 38 cents, down from 60 cents a year ago.
Analysts had expected earnings of 29 cents on sales of $293.7 million.
The company reduced its store hours during the pandemic and added hours at locations where demand improved. Company officials said Monro has “right-sized” store staffing levels since the beginning of the pandemic and has strategically added staffing back to its stores as demand improved.
During the second quarter, Monro closed six company-operated stores, of which five are temporarily closed as a result of damage sustained during Hurricane Laura in Louisiana and Tropical Storm Isaias in the Northeast. During the second quarter, Monro opened one company-operated store, ending the quarter with 1,242 company-operated stores and 97 franchised locations.
“While the disruption created by the COVID-19 pandemic has continued to weigh on our top-line results in the second quarter and third quarter-to-date, with comparable-store sales down approximately 12% in fiscal October, our performance is tracking in-line with key industry indicators,” said Robert Mellor, Monro chairman and interim chief executive. “Given the ongoing challenges in the operating environment, we continue to focus on the aspects of our business within our control.
“That includes driving profitability by managing our store operating hours and staffing levels to match demand, as well as expanding variable margins through improved tire pricing and labor productivity.
“These efforts combined with targeted cost reductions and working capital management have led to a significant increase in operating cash flow in the first half of the fiscal year,” Mellor said. “Further, we remain committed to our disciplined M&A strategy as evidenced by our continued expansion in the attractive West Coast region with the acquisition of 17 stores in Southern California.”
The Southern California stores are expected to add roughly $20 million in annualized sales, officials said, with a sales mix of 60 percent tires and 40 percent service. The deal is expected to close in the third quarter.
Monro did not provide a company outlook this week due to ongoing uncertainty as a result of the pandemic.
Shares of company stock (Nasdaq: MNRO) were down more than 5 percent to $40.90 in afternoon trading.
Monro Inc. President and CEO Brett Ponton has resigned from the company and its board of directors effective Aug. 19. Ponton will join ServiceMaster Global Holdings Inc. as CEO on or before Oct. 1.
Monro Chairman Robert Mellor has been named interim CEO while the company engages with a leading executive search firm to identify a successor.
“On behalf of the board of directors, I would like to thank Brett for his leadership and contributions to Monro,” Mellor said in a statement Thursday. “We have a strong leadership team in place and a solid foundation to drive a scalable platform for long-term sustainable growth. We are confident that our firm commitment to driving the continued execution of our Monro.Forward strategy combined with our solid balance sheet positions us well to capitalize on long-term growth opportunities.”
Mellor has been chairman of the board since 2017 and has served on the board since 2010. From March 1997 until January 2010, Mellor was chairman of the board and CEO of Building Materials Holding Corp., a leading provider of building materials and construction services to professional home builders and contractors, and where he had served as a director since 1991. He also serves as non-executive chairman of the board of Coeur Mining Inc.
Ponton joined Monro in 2017 following the departure of former CEO John Van Heel. Ponton brought with him more than 20 years of experience, having spent 18 years with Goodyear Tire & Rubber Co. in a marketing capacity as well as running its retail division. He also was with Heartland Automotive Services Inc., the largest operator of Jiffy Lube stores in North America, and just prior to his role at Monro served as president and CEO of American Driveline Systems Inc., which owns AAMCO Transmissions Inc.
At Monro, Ponton was tasked with continued growth through acquisition, as well as pushing the company’s Monro.Forward business strategy and store remodels focused on the customer.
“I am very proud of the progress Monro has made in its transformational journey and believe our accomplishments have established a strong and durable platform for future growth. It has been a pleasure to work with our incredibly talented and collaborative team and Board. For these reasons and many more, leaving Monro was an incredibly difficult personal decision. Monro is a strong business with an outstanding team and winning strategy, and I am confident the Company will achieve continued success in the years ahead,” Ponton said Thursday.
Headquartered in Memphis, Tenn., ServiceMaster described Ponton as a results-oriented CEO with a history of driving both organic growth and successful acquisitions.
“I am honored to assume the role of ServiceMaster’s CEO and excited to join its strong an experienced management team in leading the company forward,” Ponton said in a separate statement Thursday. “With the cultural and operational transformation at Terminix and the strategic review of ServiceMaster brands underway, the company is well-positioned for short- and long-term growth and I look forward to safely getting out in the field to connect with our team members.”
Shares of Monro stock (Nasdaq: MNRO) took a hit on news of Ponton’s departure. Company stock was trading down 8 percent midday at $54.92.
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.
Monro Inc. on Thursday reported a fourth-quarter sales decline, resulting in a $3.8 million net loss, brought about by a mild winter and the COVID-19 pandemic.
For the fourth quarter ended March 30, the Rochester-based undercar care specialist reported sales of $286.1 million, down slightly from $287.2 million in the fourth quarter last year. Comparable store sales — or sales at stores open at least one year — fell 9.5 percent in the quarter.
Net loss for the quarter was $3.8 million, compared with net income of $16.8 million in the year-ago quarter. Diluted loss per share was 12 cents, compared with diluted earnings of 50 cents in the fourth quarter last year.
Analysts had expected GAAP earnings of 32 cents per share. Adjusted earnings were 8 cents per share, missing Street estimates by 13 cents.
“Promoting health and safety across all aspects of our business remains our top priority as we work to continue to serve our customers, and I would like to thank all our teammates for their incredible work during these unprecedented times. Our fourth-quarter performance was challenged by mild winter weather conditions in January and February, and while we saw improved comparable store sales performance with the onset of spring weather in early March, we experienced a substantial drop in traffic due to the impact of the COVID-19 restrictions in the second half of the month,” said Monro President and CEO Brett Ponton. “In response to COVID-19, we took a number of proactive steps to mitigate near-term headwinds and maximize our financial flexibility, which we believe position us well to drive business continuity through the pandemic. Further, we are focused on streamlining our operations and implementing our investments in technology, which we believe will support our broader strategy and allow us to drive a stronger operating performance moving forward,”
Sales for fiscal 2020 increased nearly 5 percent to a record $1.257 billion, compared with $1.2 billion in fiscal 2019. Officials said the sales increase was a result of an increase in sales from new stores, including sales from recent acquisitions.
Comparable store sales were down 2.3 percent for the year. Gross margin for the year was 37.9 percent of sales, down from 38.8 percent in the previous year, due primarily to comparable-store sales.
Net income for the full year was $58 million, or $1.71 per diluted share, down from $79.8 million, or $2.37 per share in fiscal 2019. Adjusted earnings were $2.
“Overall, while our operations continue to be significantly impacted by COVID-19, with comparable-store sales declines in April and May month-to-date of approximately 41% and 24%, respectively, we are encouraged by the gradual improvement in traffic we have seen towards the end of May as stay-at-home orders are lifted across the nation,” Ponton said. “While we navigate this uncertain environment, we are focused on the elements of the business within our control, including advancing our Monro.Forward initiatives as we look forward to continuing to deliver long-term, sustainable value once the pandemic subsides.”
In response to the pandemic, Monro has implemented a number of business contingency plans to ensure that stores are operating efficiently. Those include:
• deferring non-critical capital expenditures, including its store rebrand and reimage initiative;
• reducing store hours and store labor to match demand;
• reducing selling, general and administrative expenses;
• temporarily pausing acquisition activity; and
• bolstering its working capital position.
Monro also has expanded its collaboration with Amazon.com to provide tire installation services at more than 200 additional retail tire and automotive service locations in seven states across the Eastern and Western regions of the U.S., increasing the number of service locations to more than 1,000 stores.
By July, Monro expects to have rolled out its Amazon tire installation services to all of its more than 1,200 locations in 32 states.
The company also on Thursday said it had closed six stores during the fourth quarter as part of a planned “portfolio optimization,” and not in response to COVID-19. Monro plans to close an additional three dozen stores by the end of the current quarter. The store closures are expected to improve operating income by some $5.1 million annually.
On Thursday’s earnings call, Ponton said likely the 42 store closures would be in the Midwest, where Monro has a high concentration of overlapping store footprints.
“I think it’s more about rationalizing our footprint there and we expect to preserve a lot of that customer and revenue demand in other stores where there is good density,” Ponton said in the call.
Monro on Thursday also announced a quarterly cash dividend of 22 cents per share on outstanding shares of common stock, payable on June 22 to shareholders of record at the close of business on June 8.
Monro did not provide a company outlook. Shares of company stock (Nasdaq: MNRO) closed Wednesday at $62.04 and had fallen to $57.97 in normal volume Thursday afternoon.
Monro Inc. shares sank more than 13 percent on Thursday following the Rochester company’s second-quarter earnings announcement. Company stock (Nasdaq: MNRO) was trading at $70.05 in heavy midday trading, down more than $10 from Wednesday’s close at $80.55.
For the quarter ended Sept. 28, the automotive undercar repair company reported a more than 5 percent increase in revenues to $324.1 million, compared with $307.1 million in the year-ago quarter.
However, net income for the quarter fell to $20.3 million from $21.8 million in the same period last year. On a per-share basis, earnings fell to 60 cents from 65 cents in the second quarter last year.
Earnings missed Street estimates by 11 cents, while sales missed by nearly $6 million.
“We are disappointed in our second-quarter results, which were significantly impacted by gross margin pressures related to higher than expected tire and labor costs,” Monro President and CEO Brett Ponton said in a statement. “However, we believe the second quarter represents a low watermark for us this year, as we quickly took action to rectify our margin pressures in the near-term and are implementing initiatives to drive margin expansion moving forward.”
As a result, Monro lowered its full-year guidance to sales of $1.295 billion to $1.315 billion, with a 1 to 2 percent comparable store sales increase. The company expects 2020 diluted earnings per share in the range of $2.45 to $2.55, compared with $2.37 per share in fiscal 2019.
Comparable store sales—or sales at stores open at least one year—were flat for the quarter. Gross margin fell to 37.7 percent from 39.1 percent a year ago.
Monro also on Thursday said it had signed an agreement to acquire 18 stores, including 14 in Nevada and four in Idaho, both new states for Monro. The locations are expected to add some $20 million in sales annually, representing a sales mix of 75 percent service and 25 percent tires.
The company’s aggressive growth-through-acquisition strategy continues with the acquisition of nine stores in California, expanding its reach in the state. The nine stores are expected to add $25 million in annualized sales, with a sales mix of 55 percent service and 45 percent tires.
Monro’s acquisitions in Louisiana were completed during the second quarter, officials said.
“Positively, we substantially completed the re-image of approximately 120 stores across a number of markets, representing a significant step forward in our store refresh program,” Ponton said. “This initiative is a critical component of our Monro.Forward strategy as it underpins our ability to drive sustainable growth, as evidenced by the double-digit increase in comparable store sales our pilot stores have generated following the completion of their re-image.”
Ponton said the company remains committed to “executing on attractive acquisition opportunities,” as seen with its two most recent purchases on the West Coast.
Headquartered in Rochester, Monro operates a chain of more than 1,250 stores, nearly 100 franchised locations, eight wholesale locations and three retread facilities in 30 states nationwide. The company was founded by Charles August in 1957 as a Midas Muffler franchise.
Monro Inc. on Thursday reported record first-quarter sales and earnings, the completion of three acquisitions and announced plans to extend its footprint in Louisiana.
For the first quarter ended June 29, the undercar repair company reported a more than 7 percent sales increase to $317.1 million, compared with $295.8 million in the year-ago quarter, driven by a comparable store sales increase and sales from recent acquisitions. Revenue fell short of analyst estimates by $3.54 million.
Net income for the quarter improved to $22.6 million from $20.6 million in the first quarter last year. On a per-share bases, diluted earnings of 67 cents, up from 62 cents last year, beating Street estimates by 1 cent.
“We entered fiscal 2020 with continued momentum as we achieved our sixth consecutive quarter of comparable store sales growth, and are pleased to report this performance has extended through July with comparable-store sales up approximately 1 percent month-to-date,” Monro President and CEO Brett Ponton said in a statement. “Our solid performance despite cold and wet spring weather in certain regions reflects improved in-store execution across our business as well as the continued traction of our Monro.Forward initiatives, which are progressing on schedule.”
Monro.Forward was launched last year as an initiative which focuses on driving operational excellence and delivering a consistent best-in-class customer experience. Ponton said he is encouraged by the outperformance of the company’s reimaged stores.
Monro during the first quarter completed the acquisition of California-based Certified Tire & Service Centers Inc. that includes 40 retail stores and a distribution center. The separate acquisition of 12 retail stores in Louisiana also closed during the first quarter. A third acquisition of two additional stores in California also was closed.
Together, first-quarter acquisitions are expected to add $63 million in annualized sales.
Monro officials also said the company had signed definitive agreements to purchase eight stores in Louisiana, expected to add roughly $12 million in sales. The acquisitions are expected to close in the second quarter.
Monro on Thursday reiterated its fiscal 2020 diluted earnings guidance of $2.55 to $2.75 per share, compared with $2.37 per share in fiscal 2019. Based on current sales and economic trends, the company expects fiscal 2020 sales to be in the range of $1.285 billion to $1.315 billion, a 7.1 to 9.6 percent increase over fiscal 2019.
“Looking ahead, we believe we are well-positioned to continue to expand our store footprint in attractive markets and capitalize on our robust pipeline of opportunities,” Ponton said. “While we remain fully confident in our expectations for the remainder of the fiscal year, we are updating our full-year comparable store sales guidance range to reflect the unfavorable weather conditions in certain regions that tempered our top-line performance in the first quarter.”
Monro, founded in Rochester in 1957, has more than 1,250 company-operated stores, nearly 100 franchised locations, eight wholesale locations and three retread facilities that provide undercar repair and tire sales and service. The company operates in 30 states. [email protected] / 585-653-4021
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Monro Inc. is planning to renovate and add space to its Holleder Parkway headquarters, a move that is expected to add up to 26 jobs.
Empire State Development will provide up to $300,000 in support of the project through the Excelsior Jobs Tax Credit Program. The County of Monroe and Greater Rochester Enterprise Inc. also will assist with the company’s expansion.
Phase 1 of the construction is already underway and is expected to be completed later this summer.
“Monro Inc.’s decision to expand its Finger Lakes headquarters reflects the work we are doing to help established, successful companies grow and create jobs in this region and around New York State,” said ESD President, CEO and Commissioner Howard Zemsky in a statement.
Monro has made a number of changes in the last two years. In 2017, the Rochester company underwent a name change from Monro Muffler Brake Inc. to Monro Inc. Later that year, Brett Ponton was named president and CEO, and in 2018 Monro rebranded and began the task of upgrading each of its roughly 1,200 stores.
Earlier this year, the company announced it had extended its footprint to the West Coast with the acquisition of California-based Certified Tire & Service Centers Inc., adding 40 retail stores in San Francisco, San Diego and Los Angeles, and a distribution center located in Riverside, Calif.
The company refers to its Rochester headquarters as its store support center. Phase I of the new project includes the construction of a 13,000-square-foot expansion on two floors of the existing location. The first phase will add 12 new offices and nearly 80 workstations.
Phase II will include the renovation of existing space to allow for the addition of 10 conference rooms and other enhancements aimed at attracting and retaining its workforce.
“As we continue to expand our footprint to include operations in 30 states, we are pleased to also expand our store support center with economic support from Monroe County and ESD,” said Brian D’Ambrosia, Monro’s executive vice president and chief financial officer.
Monro Inc. on Thursday said it will step out of its established footprint with the acquisition of California-based Certified Tire & Service Centers Inc. Financial details of the transaction were not disclosed.
With headquarters in Rochester, the automotive undercar service company has nearly 1,200 stores, 98 franchised locations and eight wholesale locations in 28 states in the mid-Atlantic and New England regions, as well as portions of the Great Lakes, Midwest and Southeast. Monro is known for its growth-through-acquisition strategy, but the Certified tire acquisition marks the first time the company has moved beyond the Rockies.
“We are thrilled to announce this acquisition, which provides us with a strong platform for further expansion into a dynamic and attractive region,” Monro President and CEO Brett Ponton said in a statement. “The diversification of our geographic footprint in California represents a key milestone in the execution of our growth strategy, and we look forward to capitalizing on future opportunities in this market.”
Certified Tire’s 40 retail stores are in San Francisco, San Diego and Los Angeles, and a distribution center is located in Riverside, Calif. Monro officials said the company will continue to operate all 40 stores.
“As Certified Tire has expanded its footprint throughout California, our priority has always been providing superior tire and automotive service to our valued customers,” Certified Tire President Jeff Darrow said. “We are pleased to join the Monro family, which shares these core values and is committed to expansion and growth in our geography.”
The transaction is expected to close in the first quarter of fiscal 2020 and add some $45 million in annualized sales, with a sales mix of 70 percent service and 30 percent tires.
In a November interview with the RBJ, Ponton hinted at future acquisitions that would extend the company’s reach into more than its current 28 states, and said part of what gives him confidence to continue to march further west is the structured way in which Monro is driving a consistent experience.
Monro last year adopted a new Monro.Forward business and re-imaging strategy. The company has undergone a name change, a brand re-imaging and has embarked on renovations and upgrades to each of its stores nationwide to unify the growing family of facilities.
“We believe that the continued execution of our Monro.Forward initiatives will position us to more effectively and efficiently integrate this and other acquisitions, creating long-term shareholder value,” Ponton said in Thursday’s news release.
Shares of company stock (Nasdaq: MNRO) soared nearly 4 percent midday Thursday to $81.18. The company’s 52-week range has been $51.20 to $84.38.
Monro Inc. on Thursday reported record third-quarter sales, beating Street estimates for the third time in four quarters.
For the third quarter ended Dec. 29, the Rochester company posted revenues of $310.1 million, a nearly 9 percent increase over the $285.7 million in the third quarter last year. Revenue increases for the quarter were driven in part by sales from new stores of $19.8 million.
Net income for the quarter was $20.5 million, compared with $11.6 million in the year-ago quarter. Diluted earnings per share for the quarter were 61 cents, up from 35 cents in the third quarter last year.
Analysts polled by Zacks Investment Research had expected earnings of 58 cents.
Comparable store sales, or sales at stores open at least one year, increase 2.2 percent for the quarter, primarily within Monro’s brakes segment.
“We delivered our fourth consecutive quarter of positive comparable store sales growth and achieved a third quarter record earnings per share, reflecting sustained demand in our tire and brake categories and solid execution across our business,” Monroe President and CEO Brett Ponton said in a statement. “Our Monro.Forward initiatives continue to gain traction, and I am pleased to report that we successfully implemented our standardized in-store operating procedures and store refresh program at our 31 pilot locations in Rochester, NY. We are encouraged by the outperformance of these stores and look forward to expanding this initiative across our store base.”
The company announced plans to extend its footprint into Louisiana with a 12-store acquisition that is expected to add roughly $15 million in annualized sales, with a sales mix of 35 percent service and 65 percent tires. The acquisition is expected to close in the fourth quarter.
Monro officials said a previously announced acquisition of seven stores, representing $8 million in annualized sales, has been taken off the table, following an extended due diligence period. But an acquisition announced in the third quarter for five retail stores in Ohio has been completed, as has an acquisition of 13 retail locations in Florida.
For the full year, Monro expects sales to be in the range of $1.185 billion to $1.215 billion. Diluted earnings per share is expected to be $1.92.
Since being named president and CEO in late 2017, Ponton has led Monro through a name change, a brand re-imaging and has begun renovations and upgrades to each of its roughly 1,200 stores nationwide to unify the growing family of facilities. The automotive undercar repair company operates in 28 states.
Shares of company stock (Nasdaq: MNRO) have fluctuated little since Thursday’s open at $70.66.
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