Monro Muffler Brake Inc. announced record financial results for the first quarter ended June 25, 2005.
Sales increased 8.3% to a record $94.6 million from $87.3 million last year. Comparable store sales increased 1.7% and new stores contributed $7 million.
The sales gain was led by an approximate 7% increase in the comparable store maintenance service category, including oil changes, and 6% growth in comparable store tire sales, the company said.
The company opened two new stores during the quarter and closed three stores, ending the quarter with 625 stores.
Gross margin increased to 43% from 42.4%, reflecting improved purchasing power and the company's ability to sustain recently implemented price increases.
Selling, general and administrative expenses, as a percentage of sales, declined to 28.4% compared to 28.9% last year primarily due to fixed cost leverage, the company noted.
Taken together, the above factors contributed to a 17.5% increase in operating income. Net income increased 13.2% to a record $7.7 million compared to $6.8 million last year.
Robert Gross, president and CEO, said, "We completed a very solid quarter during which we again produced record top and bottom line results, despite a decrease in comparable store sales in May. Importantly, we were able to significantly improve our operating margin even with an increase of the lower margin maintenance service and tire categories in our overall sales mix.
"Our record results and margin improvements were driven by excellent execution from our entire team, which has successfully integrated our recent tire store acquisitions, continued to execute our strategy to drive store traffic and maintained our industry leading customer service.
"While May proved to be a challenging month for us and most retailers, our business rebounded in June and the positive sales trend has accelerated into July.
"As such, we remain comfortable with our previously stated expectations for annual sales to be between $375 million and $385 million....
"We remain committed to growing our business through attractively priced acquisitions that expand our store base, fill in our existing markets, and increase our profitability. We continue to see good opportunities in the marketplace to complete such acquisitions, and we are better positioned to complete these transactions under the highly favorable terms of the new revolving credit facility that we announced today."
