Monro says fourth quarter store sales will be flat
Monro Muffler Brake Inc. predicts that its comparable store sales for the fourth quarter of 2005 will be flat.
"As a result, full year comparable store sales will be up approximately 1.5% to 2%," say Monro officials.
Monro's fiscal 2006 EBITDA is expected to increase by $8 million to $58 million.
"With respect to fiscal 2007, the company will provide a more detailed outlook when it reports full year results in May 2006" and has "more visibility" on its recent acquisitions of ProCare Automotive and Strauss Discount Automotive.
"Our performance in the fourth quarter was impacted by the same factors we have experienced all year, namely consumers choosing to defer large-ticket repair purchases," says Monro CEO Robert Gross.
"These factors, combined with unseasonably warm weather, resulted
in our comparable store sales coming in slightly lower than we initially anticipated.
"That said, we effectively controlled our expenses and are on track to meet our bottom line expectations for the full year. Further, we believe the progress we have made this year positions us to once again meet our long-term earnings growth target in fiscal 2007."
Earlier this month, Monro announced it had agreed to purchase the assets of ProCare for $14 million in cash.
ProCare, which has filed Chapter 11 bankruptcy, is the seventh largest independent tire store chain in North America with more than 80 outlets, according to Modern Tire Dealer research.
At the same time, Monro also revealed that it struck a deal with Strauss Discount Automotive to amend terms of their buy-out deal, giving Monro the option to acquire the remaining 87% of Strauss on or before Sept. 30, 2006.
Monro purchased 13% stake in Strauss last October. It had the option of acquiring an additional 20% stake on or before March 31, and the remaining 67% anytime before April 1, 2007.