Monro Inc.'s sales decreased 1.9% to $335.2 million during the company's third quarter due to the sell-off of its "wholesale tire and distribution assets," according to Monro officials. However, Monro's comparable store sales increased by 5.6%, driven "by an approximate 12% comparable store sales increase of approximately 300 of the company's small or underperforming stores.
"Sales from new stores increased $6.1 million - primarily from recent acquisitions."
Specifically, tire sales grew by 8% and sales generated by auto maintenance services jumped 7% on a year-over-year basis.
Monro's operating income for the third quarter totaled $23.8 million versus $27.4 million during the same prior-year period.
"Given broad-based inflationary pressures on the consumer, we saw customers continue to trade down to lower-priced tire options and defer vehicle maintenance in some of our key service categories," says Monro President and CEO Mike Broderick. (Monro's comparable store sales derived from brake, alignment and front end service sales fell by 5%.)
"Repositioning our tire assortment ahead of the winter selling season to give our customers the right tire at the right price allowed us to drive additional customer traffic to our stores, which resulted in tire unit growth and outperformance in tire units versus the industry in the third quarter.
"In line with our strategy to develop a long-term relationship with our customers, we chose not to fully pass-through parts inflation to an already stretched consumer. While a higher sales mix of tires versus service, customer trade downs to opening price point tires, our investments in price and continued labor cost pressure impacted our gross margin, prudent cost control in the third quarter allowed us to leverage operating expenses on mid-single digit growth in comparable store sales.
"Encouragingly, our sales momentum has continued into fiscal January, with our preliminary comparable store sales up approximately 8%”, he says.
“As we continue to drive our business toward consistently delivering on our mid-single digit comparable store sales growth expectations, the customer-focused initiatives we’ve recently implemented will allow us to fulfill our commitment to maintain a more balanced approach between tire and higher-margin service categories.
"We believe this will enable us to leverage our cost structure to deliver enhanced profitability, as we drive customer traffic to our stores, capture market share and position Monro as an even stronger competitor in every market we serve."
Monro ended the quarter with 1,296 company-owned stores and 79 franchised locations.
