Monro Records Drops in Both Net Sales and Income

Posted on February 1, 2018

Net sales dropped 0.9% and net income fell 34% at Monro Inc. for the three-month period ending Dec. 23, 2017. Lower same-store sales were to blame for the decreases.

The period, which is the third quarter of Monro’s 2018 fiscal year, included sales of $285.7 million, down from $288.3 million a year ago. Net income was $11.6 million, down from $17.6 million in fiscal year 2017.

The company’s income -to-sales ratio for the quarter was 4%.

Tire sales at Monro Inc. were down 4% for the three-month period. Alignments were down 5%, while maintenance services like oil changes fell 3% and brakes were down 1%. Front end and shocks were flat for the quarter.

Monro says the decreases at comparable stores were partialy offset by sales of $6.4 million from new stores.

During the quarter, Monro opened four and closed two company-operated stores. The company ended the period with 1,138 company-operated stores and 103 franchised locations.

Monro also says it has signed a definitive agreement to acquire seven stores, and that they’re expected to add about $7 million in annualized sales. The newest acquisitions hold a sales mix of 45% service and 55% tires. The company didn't idenitify the stores it was buying.

The deal is expected to close during the fourth quarter.

Brett Ponton, CEO and president of Monro, offered this analysis:

“On an adjusted basis, third quarter results were largely in line with our internal expectations. During the quarter, we reached a favorable settlement in a long-standing legal matter, continued to execute our disciplined acquisition strategy and moved quickly to launch a number of strategic initiatives to drive improvement across our organization. By placing a renewed focus on the customer and introducing new training, technology and data-driven analytics in critical areas of the business, we will significantly strengthen our sales execution and drive operational efficiency.

“As we enter the fourth quarter, we saw top-line recovery in our January fiscal month which ended on the 20th, with comparable store sales up approximately 1%, or 2.5% after adjusting for the holiday calendar shift. Thus far in our February fiscal month, we’re encouraged to see comparable store sales accelerate from January levels, driven by higher traffic. With a commitment to driving improvement, during the fourth quarter we will evaluate whether to take a portion of the expected fiscal 2019 tax savings, estimated to be between $.45 and $.50 in diluted earnings per share, and accelerate investments to fast track our strategic initiatives. This underscores our confidence in our strategy, which we believe will create sustainable long-term value for our shareholders.”

Overview of the first nine months

Sales increased 9.4% to a record $842.2 million, up from $769.5 million for the prior year. Net income for the first nine months is $46.5 million, down 10.4% from $51.9 at this point in fiscal year 2017.

Same-store sales are down 0.7% for the first nine months of the period, ended December 2017.


Based on current sales, business and economic trends, and recently announced and completed acquisitions, Monro anticipates fiscal 2018 sales to be in the range of $1.120 billion to $1.135 billion, an increase of 10% to 11% as compared to fiscal 2017 sales.

That guidance assumes a comparable store sales decrease of 0.5% to an increase of 0.5% on a 52-week basis (an increase of 1.5% to 2.5% including an extra week in the fourth quarter).

Those figures represent a slight improvement over previous guidance, which included sales of $1.115 billion to $1.145 billion, and a comparable store sales decrease of 1.0% to an increase of 1.0%.

Related Topics: acquisitions, Brett Ponton, Monro, Monro financials

Comments ( 0 )
More Stories
News Growth in Volumes Helps Michelin Increase Net Sales and Income in 2017

Net sales increased 5% and net income hit a historic high for Michelin Group in 2017.

News Tire Guru Software Adds Epicor's Integrated Service Estimator

Epicor Software Corp.'s Integrated Service Estimator (ISE) tool has been merged into the Business Center point-of-sale program offered by Tire Guru Software.  

Two-time NASCAR champion Greg Biffle has joined Continental as a social media correspondent. His first assignment was driving an off-road course on the General Grabber A/TX. He got stuck in a mud pit.
Photo Photos: A Look at 2 New General Tires

Continental Tire the Americas LLC invited Modern Tire Dealer to a launch event of two tires on opposite ends of the spectrum — the G-Max RS is an ultra-high performance summer tire, and the Grabber A/TX, an all-terrain tire.

News Tire Shipments -- Not Production -- Increased in 2017, Says USTMA

According to the preliminary edition of its 2018 U.S. Tire Manufacturers Association (USTMA) Factbook, replacement passenger and truck tire shipments reached record highs.

Tireco plans a total of five F-load sizes for the Patagonia M/T tire.
News Tireco Adds F-Load Sizes to Patagonia M/T Tire

Tireco Inc. has added two F-load size options to the Patagonia M/T tire lineup; and three more sizes are in the works.

News Cooper to Open New Distribution Center in Mississippi

Cooper Tire & Rubber Co. will open a new 1-million-square-foot warehouse in Byhalia, Miss. The site is expected to open in the fall of 2018.  

News Vogue Recalls 1,203 Tires With Incomplete TIN

Vogue Tyre & Rubber Co. is recalling 1,203 tires that do not have the complete tire identification number (TIN) on their outboard sidewalls.  

Louis Gomez of Prescott (Ariz.) Tire Pros & Automotive Service, and his wife, Angela, received the Tire Pros Excellence in Engagement Award from Bob Bittner, left, and Quick Chadwick, right.
News Tire Pros Develops a Playbook to Guide its Franchisees

Tire Pros Francorp. is "dealer-driven." That differentiates the franchise program from similar programs, says Ron Sinclair, senior vice president of retail strategy and partnerships for its parent company, American Tire Distributors Inc.

Menegaux has a degree in finance, management and economics, and is currently a member of Michelin Group's executive committee.
News Florent Menegaux Will Take Over as Michelin CEO in Mid-2019

Michelin Group has lined up a replacement for Jean-Dominique Senard, who doesn't want to extend his term as CEO of the tire company past its current expiration date — the end of the 2019 annual shareholders meeting.  

European tire journalist Mike Scanlon died in mid-January.
News Retired European Tire Journalist, Mike Scanlon, Has Died

Mike Scanlon, retired publisher and managing editor of European Tyre Trade News magazine, one of the UK’s leading publications, has died.

Article ‘Go Online,’ They Said, ‘It’s Easier’: We’re Caught in the Transformational Global Vortex

One out of 10 retail transactions takes place in a brick-and-mortar location. Wayne Williams says that means independent tire dealers need to redefine and refine their in-store experience.

Article Legislative Issues in 2018: Here are the Top 5, Healthcare Among Them

The legislative landscape is unpredictable, to say the least. There are too many political agendas being promoted to forecast what will and won’t get done on your behalf, at least on the national level.

Be the First to Know

Get the latest news and most popular articles from MTD delivered straight to your inbox. Stay on top of the tire industry and don't miss a thing!