Monro Inc.’s latest financial report shows the nation’s third-largest independent tire dealer is emphasizing automotive service in its rebound from the COVID-19 pandemic. Alignments and brake sales were both up more than 50% in the most recent quarter.
Monro’s latest fiscal year started in late March. Here’s how the biggest automotive service categories fared in the most recent period:
- Brakes: Up 57%
- Alignments: Up 54%
- Maintenance services: Up 42%
- Front end/shocks: Up 40%
Those numbers might make same-store tire sales — up 25% from the previous year — look like an afterthought, or appear that they’re lagging. But CEO Mike Broderick said that’s not the case.
“I think it’s not tire sales lagging. It’s our focus on service,” he said. “We love selling tires but we love selling service.”
The improvement in all of those categories helped Monro record $341.8 million in sales for the first quarter of fiscal year 2022, up 38% from the previous year. The quarterly sales total is a company record, said Brian D’Ambrosia, executive vice president and chief financial officer.
D’Ambrosia said the improvement in same-store sales has continued into July, and so far those sales are trending above pre-pandemic levels.
Monro recorded net income of $15.7 million in the quarter, up dramatically from the almost $3 million for the same period a year ago.
The company ended the period with 1,291 stores, up from the 1,247 it had in June 2020.
Monro didn’t announce any new acquisitions for 2021, but the company did finalize its purchase of Mountain View Tire & Service. Broderick said the stores are a “heavy service business” with a “great reputation.” The company continues to integrate Mountain View Tire, as well as the acquired Allen Tire stores, into its network.
Broderick again emphasized the company’s interest in building stores from the ground up in markets where it can’t buy locations, identifying Colorado, Texas and Arizona as market potentials. Plus there’s an opportunity to build out its presence in California, he said.
Tire distribution plans
Building and adding stores in markets requires tire distribution. And the company’s previous CEO had talked repeatedly about waiting to invest in distribution until Monro had enough stores in a region to warrant it. At the time, the company was focusing on its presence in Florida and the southeastern U.S.
Asked about investing in that infrastructure now, Broderick said, “We are looking at building or partnering.
“There’s a lot of partners looking to do business with Monro,” he said, noting he’s “confident” the company can find distribution partners for “a long-term relationship.”
