Monro Muffler Brake Inc. recorded net income of $13.6 million on net sales of $176.7 million for the third quarter ended Dec. 24, 2011. That compares to income of $11.1 million on sales of $165.5 million for the same period the previous year.
Both 3Q income and sales were quarterly records for the company. New stores added sales of $12.3 million. Monro's income-to-sales ratio was 7.7%.
Comparable store sales were approximately flat with one more day in the third quarter of fiscal 2012. They increased approximately 14% for exhaust, 6% for brakes and 2% for front end/shocks.
Comparable store sales decreased 4% for tires and alignments, and were flat for maintenance services.
Monro added eight locations and closed seven locations during the quarter, ending the quarter with 803 stores.
“During the third quarter, we once again achieved strong profitability despite a continuing difficult economic environment, due largely to our recent acquisitions
outperforming our expectations, and continued operating leverage through a focus on cost control," says Robert Gross, chairman and CEO.
"We generated solid performance across many of our major service categories during the third quarter as consumers continued prioritizing repairs in order to extend the life of their vehicles. However, this was somewhat offset as we were negatively impacted by an unseasonably warm quarter, leading consumers to delay purchases, especially tires, needed to prepare their cars for winter.
"Overall, we are pleased with the strength of our business entering the fourth quarter, which we believe reflects the ability of our employees to consistently provide excellent service, turning new customers into loyal customers and keeping loyal customers returning.”
For the nine-month period, net income increased 17.3% to a record $44.1 million (compared to $37.6 million for the third quarter of fiscal 2011). Sales increased 6% to a record $514.8 million (compared to $485.9 million).
Comparable store sales increased 0.4% versus an increase of 5.7% in fiscal 2011.
Company outlook
Based on current visibility, business and economic trends, the recently completed acquisitions, as well as fiscal 2012 being a 53-week year, the company now anticipates fiscal 2012 comparable store sales growth in the range of 2% to 3% (flat to 1% adjusted for days).
Monro expects its sales for the year to be approximately $690 million.
“We continue to have a positive outlook for the business for fiscal 2012 and the long-term," says Gross. For the month of January, we experienced positive trends, with same store sales increasing approximately 6%, giving us confidence that the soft results we experienced in the latter half of the third quarter were mainly a result of unusually warm weather and customers prioritizing holiday spending.
"Overall, we anticipate continued moderate organic sales growth throughout the remainder of the year as a result of the macroeconomic environment, continued high unemployment, increased tire and gas prices and low consumer confidence.
"Additionally, we continue to believe that the current macroeconomic environment puts us in an ideal position to take advantage of additional acquisition opportunities," he says. "In that regard, we expect to complete the acquisition of additional stores this quarter that, when combined with the two acquisitions we already completed this fiscal year, will represent 10% annual acquisition growth on a run-rate basis this year. These stores are expected to be accretive in fiscal 2013.”
