As a result of the uncertainty caused by COVID-19, and in an effort to keep cash on hand, Monro Inc. is temporarily halting its acquisition efforts as well as its national rebranding work to turn more of its automotive service stores into tire stores.
Acquisitions have been the key to Monro’s growth strategy in recent years. In its most recent fiscal year alone the company spent approximately $104 million to acquire 89 stores and a distribution center.
As for the rebranding efforts, known as the company’s MonroForward initiative, 219 stores were transformed during fiscal 2020, and 71 service stores were moved to a tire-store model.
The company says these are “precautionary steps to further mitigate near term headwinds and strengthen its financial positioning.”
Here’s the full list of things Monro is doing to shore up its finances for the uncertainty that remains:
- 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.
Additionally, the company says it drew down the remaining $350 million from its revolving credit facility at the end of March. “Cash and cash equivalents are approximately $375 million as of May 26, 2020. With a solid balance sheet and ample liquidity, Monro firmly believes it is well-positioned to navigate the current environment.”
The company announced the news as part of the release of its latest financial report, which included a loss of nearly $3.8 million during its fiscal fourth quarter, which ended March 28, 2020. The company’s sales dropped 0.4% in the quarter, to $286.1 million compared to $287.2 million for the same period last year.
Monro is the third largest independent tire dealer in the country, according to the MTD 100.