Monro Points to Way Forward

Monro Inc. outlined "four key areas of focus identified as opportunities for improvement" in a recent investor presentation.

Monro generated sales of just under $1.2 billion in 2025 and operates around 1,100 stores across 32 states, according to the March 9 slide deck. Four key areas of focus include:

Driving profitable customer acquisition and activation. During its fiscal third quarter, Monro "continued to advance acquisition marketing efforts through the expansion of a multi-channel digital media plan to target high-value acquisitions," according to Monro officials. The company "expanded marketing to more than 340 additional store locations," while implementing "a measured framework that provides visibility into marketing's impact on key performance indicators." In addition, Monro continued to activate its CRM database to bring existing customers back to stores and added a call center to support 114 additional locations. (More than 830 Monro stores now benefit from the company's customer call center.)

Increasing merchandising productivity and mitigating tariff risks. Monro officials report that the company "continued to build out (its) foundational vendor and assortment strategy. In our tire category, we focused heavily on ensuring availability and to present a well-developed product assortment to guests during the fall and winter selling season. As the weather changed, we leveraged our strong supplier and distributor relationships to expand availability, where needed." Monro is now refining its tire line-up "for the next selling season, with an emphasis on achieving our objective to narrow our tire assortment," while continuing to "carefully manage the impact of tariffs on costs and pricing."

Improving our customer experience and selling effectiveness. Monro made a concentrated effort during its fiscal third quarter to expand use of its ConfiDrive vehicle inspection tool at each of its stores. The goal "is to provide transparency and ensure that we hand back the keys to a safer vehicle when we return it to the customer." Monro also created and implemented analytical tools and optimized the capability of its labor force that enables "field leaders to better develop store-based teammates," plus "invested in a team of field compliance support specialsts," according to company officials.

Closed store real estate dispositions. "Following the closure of 145 underperforming stores in the early part of (Monro's) fiscal year, we initiated a process to exit the real estate business at these locations, which included 40 stores that we own. During the third quarter, (Monro) exited 32 leases and sold 20 owned locations, which resulted in proceeds of $17.3 million. This brings us to a total of 57 leases exited and 25 locations sold, resulting in cumulative proceeds of $22.8 million fiscal year-to-date. This process is expected to generate positive cash flow and be largely completed during the next few quarters. Importantly, this allows us to focus on improving our continuing locations."

Monro's sales during the third quarter of its fiscal year fell by 4% on a year-over-year basis to $293.4 million.

The decline “was primarily driven by a reduction in sales from the closure of 145 underperforming stores in the first quarter of fiscal 2026, partially offset by a 1.2% increase in comparable store sales from continuing store locations,” say Monro officials.

Comparable tire sales increased by 5% and front end/shock sales grew by 7% during Monro’s third quarter. "Comparable store sales decreased 1% for brakes, 2% for maintenance services, 13% for alignments and 16% for batteries compared to the prior-year period.”

2026 expectations

During its fiscal 2026, Monro intends to "deliver year-over-year comparable store sales growth, primarily driven by the company's improvement plan, as well as tariff-related price adjustments to customers," according to Monro officials.

Gross margin is expected to remain consistent with fiscal 2025 levels, "given baseline cost inflation, as well as tariff-related cost increases ... with benefits from closing stores and operational improvements." Monro expects to "reinvest the selling, general and administrative expense savings from closed stores into additional marketing to support topline growth at continuing stores."

In addition, Monro expects to generate sufficient cash flow to allow it "to maintain a strong financial position and to fund all capital allocation priorities, including the company's dividend" and is projecting a capex spand of $25 million to $35 million.