Monro's Q3 Earnings & Revenues Miss Estimates, Sales Decline 3.7% Y/Y

Monro, Inc. MNRO posted third-quarter of fiscal 2025 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines. The company saw a sequential improvement in comparable store sales in the fiscal third quarter.

Monro’s Quarterly Performance: Key Metrics & Insights

Monro posted adjusted earnings of 19 cents per share, which missed the Zacks Consensus Estimate of 28 cents. Also, the bottom line slumped 51% from 39 cents reported in the prior-year quarter. The Christmas holiday shift, which reduced the number of selling days, negatively impacted adjusted earnings per share by 5 cents.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Monro Muffler Brake, Inc. Price, Consensus and EPS Surprise

Monro Muffler Brake, Inc. price-consensus-eps-surprise-chart | Monro Muffler Brake, Inc. Quote

Net sales of $305.8 million declined 3.7% year over year, due to a 1.9% drop in comparable store sales (unadjusted for days). The figure missed the Zacks Consensus Estimate of $310 million.

Comparable store sales declined 0.8% (adjusted for days), marking a 500-basis point (bps) improvement from the 5.8% decrease in the second quarter of fiscal 2025. The company observed a 30% increase in comparable store sales for batteries, 13% for alignments and 6% for front end/shocks. Conversely, there was a 1% decrease in comparable store sales for tires, 2% for maintenance services and 6% for brakes.

The gross profit of $104.8 million decreased from $112.7 million in the year-ago period. The gross margin contracted 120 bps to 34.3%, due to higher material costs from changes in the tire mix and increased self-funded promotions aimed at attracting value-oriented customers. This was partially offset by lower technician-labor costs as a percentage of sales.

Total operating expenses of $94.8 million increased from $91.3 million in the prior year quarter. As a percentage of net sales, the figure increased 230 bps year over year to 31%. The dollar increase was primarily caused by higher store direct and departmental costs to support the company’s stores.

Monro reported an operating income of $10 million compared with $21.4 million in the year-ago quarter. The operating margin contracted 340 bps to 3.3%.

Monro closed nine stores, bringing the total to 1,263 company-operated locations and 48 franchised stores by the end of the quarter.

Monro’s Financial Health Snapshot

For the first nine months of fiscal 2025, net cash provided by operating activities was $103 million and capital expenditures were $20.7 million. The company expects to generate at least $120 million in operating cash flow, inclusive of continued working capital reduction in fiscal 2025. Capital expenditures for fiscal 2025 are anticipated to range from $25 million to $30 million.

As of Dec. 28, 2024, Monro had a total liquidity of $521 million.

This Zacks Rank #4 (Sell) stock has lost 25.6% in the past three months against the industry growth of 5%.

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