Monro sets sales records for 4Q and fiscal 2010
Monro Muffler Brake Inc. posted net income of nearly $5.9 million on net sales of $147 million for its fourth quarter ended March 27, 2010. That compares to income of $3 million on sales of $117.1 million for the same period a year ago.
The 4Q '10 sales were a record for the company, driven by recent acquisitions and "strong instore sales execution across all product and service categories," according to the company.
Comparable store sales increased 8%, estimated as follows:
* 15% for tires,
* 11% for alignments,
* 6% for exhaust,
* 5% for brakes, and
* 4% for "maintenance services."
Gross margin increased to 39% from 38.4% in 4Q '09 "due to price increases that were implemented in response to increased material costs, improved labor productivity, and leveraging of fixed occupancy costs." The expansion in gross margin was partially offset by the shift in sales mix toward the lower-margin tire category.
The company added three locations and closed six locations during the quarter, ending fiscal 2010 with 777 stores.
For its 2010 fiscal year ended March 27, 2010, Monro recorded net income of $33.2 million on net sales of $564.6 million. Both were records, with income up 37.8% and sales up 18.6%.
Comparable store sales increased 7.2% for fiscal 2010, the ninth consecutive year of comparable store sales increases. Gross margin increased to 40.9%.
"Throughout the year, we drove traffic and sales in all of our key categories and acquired and integrated 74 stores," says Robert Gross, chairman and CEO. "Additionally, during the quarter we converted 54 Monro service stores in New England to our Black Gold format, which is expected to provide additional momentum in those markets heading into fiscal 2011, and represents a further benefit of the Tire Warehouse acquisition.
"Further, Tire Warehouse, along with our two other acquisitions during the year -- AutoTire and Midwest Tire -- saw comparable store sales growth of approximately 11% for the fourth quarter, exceeding our expectations and contributing to our top and bottom-line performance."
Based on current visibility and business and economic trends, the company anticipates fiscal 2011 sales in the $625 million to $640 million range, and predicts comparable store sales growth of 4% to 6%.
“We continue to experience positive trends in our business as we enter fiscal 2011," says Gross. "To date in the first quarter, we achieved comparable store sales growth of approximately 5%.
"We remain encouraged by the momentum that we are experiencing in our business, particularly as macro trends in the automotive sector continue to evolve in our favor. We are excited about the opportunities for further market share expansion in fiscal 2011 as we continue to integrate our recent acquisitions into our business and look opportunistically for additional acquisitions in our existing markets."
Monro’s board of directors approved a $.02 increase in the company’s cash dividend for the first quarter of fiscal year 2011, which raises the dividend to $.09 per share. The cash dividend is payable on the company’s outstanding shares of common stock -- including the shares of common stock to which the holders of the company’s Class C Convertible Preferred Stock are entitled.
The increased dividend will be payable on June 18, 2010, to shareholders of record as of June 8, 2010.