ProCare adds sales but disappoints Monro Muffler CEO
Monro Muffler Brake Inc. anticipates sales of approximately $415 million for its 2007 fiscal year ending March 31, 2007. It achieved sales of $368.7 million for fiscal 2006, prior to purchasing 75 ProCare outlets.
Diluted earnings per share for fiscal 2007 are expected to be in the range of $1.54 to $1.56, according to the company.
"While we have revised our estimate for the year to take into account unusually high workers compensation expenses and the underperformance of ProCare, our business remains healthy and we are pleased with the performance of our core operations," says Robert Gross, CEO and president and Chief Executive.
"I am very disappointed by the slower than expected progress made in the ProCare business over the course of the year, even with the significant improvement in comparable store sales from the declines of over 30% we inherited when we purchased ProCare out of bankruptcy. However, we continue to gain traction in the ProCare operations and are on track to report 8% growth in comparable store sales for these stores for March, and positive comparable store sales for these stores for our fourth quarter.
"We are experiencing solid company-wide sales trends, store traffic and product demand and we expect to continue this positive momentum as we enter fiscal 2008," says Gross. "Our strategy continues to be focused on growing through reasonably priced, value-added acquisitions and we would expect to announce one or two small deals in the first quarter fiscal 2008."
(In January, Monro's board of directors authorized the repurchase of up to $30 million in common stock within the next 12 months, which Gross said "gives us the flexibility to be strategic with our capital" and take advantage of acquisition opportunities.)
For the fourth quarter, the company expects adjusted comparable store sales growth to be in the range of 6% to 7%. (Monro gets the benefit of an additional four days in the fourth quarter due to fiscal 2007 being a 53-week fiscal year.)
Fourth-quarter diluted earnings per share are currently expected to be in the range of $.25 to $.27.
Based on current visibility and business trends, the company anticipates fiscal 2008 diluted earnings per share to be in the range of $1.85 to $1.95, which is an increase in excess of 25% compared to expected results of fiscal 2007. The estimate is based on an expectation of comparable store sales growth of 3% to 5% for the year, and that ProCare will contribute a minimum of $.10. It excludes the impact of any potential acquisitions.
Monro Muffler Brake's third quarter sales rose 15% to a record $103.8 million, while its third quarter net income reached $4.9 million, also a Monro record. Monro's third quarter ended Dec. 23, 2006.