Monro Muffler Brake increases sales, decreases income for fiscal 2008
Monro Muffler Brake Inc. posted net income of $21.9 million on net sales of $439.4 million for its 2008 fiscal year ended March 29, 2008. That compares to income of $22.3 million on sales of $417.2 million for fiscal 2007.
The 5.3% increase in sales included a $21.3 million increase in sales from new stores. The company's income-to-sales ratio was 5%.
Comparable store sales increased 3.1% for the year, adjusted for days, or approximately 1.2% on a reported basis. Comparable store sales at Monro's ProCare stores increased 3.8%, adjusted for days.
Monro reported a gross margin of 39.7% for fiscal 2008, compared to 39.9% in the prior year.
For the fourth quarter, Monro recorded net income of $1.9 million on sales of $107.2 million. That compares to income of $4.2 million on sales of $107.7 million for the fourth quarter of fiscal 2007.
"Our performance for the quarter was impacted by the shorter selling period, as well as by ongoing challenges in the economic environment and the resulting delays in big-ticket purchases," says Chairman and CEO Robert Gross.
"That said, we have experienced some positive trends, including an increase in our average transaction size as customers who have deferred needed maintenance for long time periods have begun to return to us for repairs. Additionally, we are encouraged by our performance in certain categories, such as brakes, as we continue to increase our share of the market and outperform our competition."
The company opened nine locations and closed two locations during the quarter, ending fiscal 2008 with 720 stores.
Based on current visibility and business trends, Monro continues to anticipate fiscal 2009 comparable store sales growth of 2% to 4%, as previously announced on May 1, 2008. It also expects sales anywhere from $455 million to $465 million.
"We are pleased with our solid start to fiscal 2009 and are encouraged by certain positive trends we are seeing in our business," says Gross. Early first-quarter comparable store sales growth of approximately 6% matches up favorably against "a strong 6.2% comparable sales increase in the first quarter of fiscal 2008."
Gross says the increase is being driven, in part, by the price increases that were implemented in March.
"While we remain cautious in our outlook for the first quarter and year due to the ongoing macro economic challenges, we expect that our low-cost operating model will continue to serve us well during this time, and positions us to take advantage of value-priced acquisition opportunities that we anticipate may arise in this environment."
As of March 29, 2008, the company had 18.3 million common shares outstanding following the completion of a $60 million stock repurchase initiative. Monro says it "may consider seeking authorization for a share repurchase plan later in the year if potential acquisitions do not materialize and market conditions are attractive."
Monro Muffler's board of directors declared a quarterly cash dividend of $.06 per share on the company's outstanding shares of common stock (including the shares of common stock to which the holders of the company's Class C Convertible Preferred Stock are entitled) payable on July 25, 2008, to shareholders of record at the close of business on July 15, 2008.