Monro Q1 sales rise 2.7%, beat estimates

Overview

• Monro fiscal Q1 sales rise 2.7% to $301 mln, beating analyst expectations

• Adjusted EPS of $0.22 beats estimates, despite store closures impacting costs

• Company closed 145 underperforming stores, focusing on operational improvements

Outlook

• Monro is not providing fiscal 2026 financial guidance at this time

• Company reports preliminary fiscal July comps up 2%

• Monro to focus on improving performance in 1,115 continuing locations

• Company aims to enhance merchandising productivity and customer experience

Result Drivers

• COMPARABLE STORE SALES - Sales increased 5.7% driven by growth in high-margin service categories, including front-end shocks, brakes, and batteries

• STORE CLOSURES - Closure of 145 underperforming stores impacted sales but reduced inventory levels by $10 mln

• HIGHER COSTS - Gross margin decreased due to higher labor and material costs, partially offset by lower occupancy costs

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the auto vehicles, parts & service retailers peer group is "buy."

• Wall Street's median 12-month price target for Monro Inc is $18.00, about 9.3% above its July 29 closing price of $16.32

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 18 three months ago

Press Release: ID:nBw2QQ7yna