Monro 1Q: record sales due to new stores
Monro Muffler Brake Inc. reported net income of $16.9 million on net sales of $217.5 million for its first quarter ended June 28, 2014. That compares to income of $13.6 million on sales of $206.2 million for the same period last year.
The company also announced it will buy 35 The Tire Choice and Total Car Care stores in Florida.
The company set net sales and income records for the first quarter.
With the 25% increase in net income and 5.5% increase in sales, the company’s income-to-sales ratio was 7.8%. Operating income for the quarter was up 27.3% to $29.4 million versus $23.1 million in the first quarter of fiscal 2014.
The company says the $11.3 million increase in sales was due to an increase in sales from new stores of $11.2 million, including sales from recently acquired stores of $9.9 million.
The comparable store sales increase of approximately 1% breaks down as follows:
* maintenance services were slightly positive
* tire sales down 3%
* alignments up 8%;
* front end/shocks up 6%;
* brakes up 9%; and
* exhaust up 1%.
Monro announced it signed an agreement with Hennelly Tire & Auto Inc. to acquire 35 The Tire Choice and Total Car Care stores in Florida. The stores are located in major west coast and east coast Florida markets. The transaction is expected to close in mid-August 2014.
In June 2014, Monro completed the acquisitions announced on May 22, 2014, which added Michigan as a new state.
Acquisitions completed and announced to date in fiscal 2015 add 54 locations, with total annualized sales of approximately $64 million, representing approximately 8% sales growth in fiscal 2015 with an approximate sales mix of 55% service and 45% tires.
“Despite the continued choppiness in the macroeconomic environment, we are pleased that consumers continue to turn to Monro for purchases that can no longer be delayed, as well as to perform basic maintenance on their vehicles,” says CEO and President John Van Heel.
“This is evidenced by an increase in same store traffic of 2% year-over-year during the quarter, led by comparable store oil change and tire units, which increased approximately 2% and 1% year-over-year, respectively.
"Additionally, we are pleased that our service categories are benefiting from last year's harsh winter. All service categories experienced positive comparable store sales for the quarter, including brakes and alignments, which collectively increased approximately 9%.
”We were disappointed by our lower tire sales, as growth in tire units was offset by continued trade down by consumers, which muted our consolidated comparable store sales. However, we took advantage of the opportunity to continue growing through attractive acquisitions.
"Overall, we remain confident in our ability to further increase our market share and continue to deliver strong earnings growth, in both strong and weak markets, by leveraging our business model and pursuing our disciplined acquisition strategy."
For more information on The Tire Choice agreement, see Monro enters Florida with the purchase of 35 Tire Choice outlets.