Tires and Alignments Giving Monro a Boost in 2021
In the first three months of 2021 at Monro Inc., same-store sales of tires increased 17% and alignments grew by 15%, leading the way for the company’s recovery and greatly exceeding the results for other automotive services.
That increase in tires and alignments helped Monro record total sales of $305.5 million for its fourth quarter of fiscal 2021, ending March 27, compared to $286.1 million for the year-ago period.
Comparable store sales in the quarter increased 9.4%, while new and recently acquired stores added $5.1 million, offsetting the loss of sales of $5.9 million from underperforming stores that have been closed in the last year.
For the final quarter of its fiscal year, Monro reported net income of $11.8 million, compared to a loss of $3.8 million from the same period a year ago.
“Monro’s solid fourth quarter results capped an unprecedented and challenging year and I am proud of our team who demonstrated exceptional resilience and commitment to safely serving our customers,” said the company’s new President and CEO, Mike Broderick. “I am excited to build on the tremendous progress that Monro has achieved over the past year advancing its transformation initiatives.
“As we enter fiscal 2022, we look forward to continuing to build on the momentum we experienced during our fourth quarter. We are well positioned to capitalize on the strengthening demand environment, as reflected in our comparable store sales growth of approximately 53% in the fiscal 2022 first quarter-to-date.
“Looking ahead, our focus on operational excellence will be instrumental to unlock the full potential of our Monro.Forward initiatives. In addition, we remain well-positioned to take advantage of attractive consolidation opportunities in our fragmented industry and have successfully completed the acquisition of 30 Mountain View Tire & Service stores in California. Now with a total of 116 stores in the Western region, we are particularly excited about Monro’s growth prospects in this attractive and dynamic market. Importantly, our strategy is underpinned by a rigorous financial discipline and strong balance sheet, which we believe provide us with ample financial flexibility to execute our growth initiatives and deliver long-term sustainable value for all our stakeholders.”
Monro didn’t announce any new acquisitions to its growing portfolio as part of its quarterly report. The company did complete its previously-announced purchase of Mountain View Tire & Service on April 25. Those 30 stores are expected to add about $45 million to Monro’s balance sheet, with a sales mix of 70% service and 30% tires.
Monro says it spent about $17 million on acquisitions during fiscal 2021. (Because the Mountain View deal closed after the end of fiscal 2021, it’s not reflected in that figure.)
For the full 2021 fiscal year, ended March 27, Monro’s sales totaled $1.1 billion, down 10.4% from $1.2 billion in fiscal 2020. Comparable store sales were down 11.1%, compared to a 2.3% drop in same-store sales from the previous year.
Here’s how comparable store sales broke down by category for fiscal 2021:
- Tires: down 3%
- Alignments: down 13%
- Maintenance services: down 19%
- Front end/shocks: down 19%
- Brakes: down 24%
Net income for the year was $34.3 million, down from $58 million in fiscal year 2020.
Monro says it generated record operating cash flow during the fiscal year — of about $185 million — “driven by profitability and strong working capital management.”
The company didn’t provide exact guidance for fiscal 2022, citing the lingering uncertainties of the COVID-19 pandemic. But it does expect its fiscal first quarter, which includes the months of April, May and June, to result in “double digital comparable store sales growth.” As of May 15, the company has recorded a 53% increase in same-store sales for the quarter, but it expects the comparisons to moderate in June due to less favorable comparisons.