The fact that overall sales at Monro Muffler Brake Inc. increased in the first quarter of fiscal 2018 is hardly news. The company's aggressive approach to acquisitions helps it continually add to the sales column. But in the latest quarter, Monro's existing, comparable stores helped the bottom line, too. And that's news.
For the quarter, which ended June 24, 2017, Monro's sales increased 18.4% to a record $278.5 million, compard to $235.3 million for the same period a year ago. Much of the increase came from sales in new stores — $41.5 million. But comparable store sales also increased 1.4%, compared to a decrease of 6.9% last year.
Comparable store sales increased:
6% for brakes and
3% for front end/shocks.
Sales of tires and maintenance services were flat, while alignments dropped about 2%, the company said.
Net income for the first quarter was $17.6 million, up from $16.8 million in the same period last year.
Monro's income-to-sales ratio was 6.3% for the quarter.
Operating expenses increased $12.4 million, and Monro said the increase stemmed from expenses with a net increase of 55 new stores "and fees related to the management transition."
Looking at only comparable stores, and excluding those management transition costs, operating expenses went up about $2.9 million, which is "primarily due to increases in performance-based store manager compensation and advertising expense."
During the first quarter, the company opened seven, and closed six company-operated locations. As of the end of the quarter, Monro had 1,119 company-operated stores.
While announcing its latest financial results, Monro also announced acquisition deals for another 20 stores.
The company expects fiscal 2018 sales to be in the range of $1.135-1.155 billion, an increase of 11% to 13%. Despite the improvement from comparable stores in the first quarter, Monro is revising its full-year guidance for performance from those stores. The company now expects those stores sales to increase 1.5%, down from the previous guidance of a 2-4% increase.
John Van Heel, CEO and president of Monro, said:
“I am confident that our team will be able to effectively leverage Monro’s unique business model and capitalize on the significant opportunities for profitable growth both organically and through accretive acquisitions and greenfield expansion. The outlook for the industry remains positive, with the total vehicles in operation, particularly those six years old and older, set to grow significantly over the next several years. Going forward, the company is well positioned to build on this strong foundation and deliver value to our customers, associates and shareholders.”