Monro Inc. reported a 3.7% decrease in sales for its fiscal 2025 third quarter and the company’s comparable store sales fell by 0.8% in the period.
The company recorded sales of $305.7 million for the quarter, down from $317.6 million for the same period in fiscal 2023.
Monro’s net income dropped 62.3% from the prior year — from $12.1 million to $4.5 million.
While tire sales were down 1% in comparable store sales, Monro made positive gains in other service categories. Batteries were up 30%, alignments were up 13% and front end/shocks were up 6% compared to the prior-year period. Brake sales were down 6%.
Gross margin dropped 120 basis points due to two factors: higher material costs “due to mix within tires,” as well as “an increased level of self-funded promotions to attract value-oriented consumers” into Monro stores.
Mike Broderick, president and CEO of Monro, said, “We drove a sequential improvement in our year-over-year comparable store sales percentage change from the second quarter and returned our business to year-over-year comparable store sales growth in the month of December, when adjusted for a shift in the timing of the Christmas holiday.
“Importantly, the year-over-year comparable store sales percentage change in both our tire dollar and unit sales improved sequentially from the second quarter and our tire category comped positive in the month of December, when adjusted for the holiday shift, with year-over-year growth in units in the quarter.”
Broderick credited the company’s new ConfiDrive “digital courtesy inspection process,” along with an oil change promotion, for prompting the improvement in the service categories at comparable stores.
But he also noted he was disappointed in the lower brake sales for the period. He said ConfiDrive is improving overall ticket sales, even when store traffic has been down.
“We need more customers, but what the team is driving is strong attachment,” Broderick told investors.
“We drove year-over-year growth in both units and sales dollars for batteries, alignments and front/end shocks,” he said.
Monro’s preliminary data shows comparable store sales are down 1% in January, Broderick said.
“This is driven by weakness in tire category sales that were impacted by extreme weather, which resulted in temporary store closures and lower store traffic, partially offset by strength in our service categories, including brakes.
“We believe the extreme weather in January will benefit us in the coming months”, Broderick said. “With our commitment to sales and unit growth and improving our customer counts, we expect to leverage our initiatives to achieve our fourth quarter objectives.”
He told investors the company had momentum coming out of December in both tires and the service categories.
Monro’s fiscal year, and thus its fourth quarter, closes in late March.
A Look at 9 Months
So far for the fiscal year, Monro’s sales total $900.3 million, a drop of 6.9% from the $966.7 million for the nine-month period a year ago. Comparable store sales have decreased 5.6%.
Net income for the fiscal year totals $16.1 million, compared to $33.9 million the year prior.
As of the end of the third fiscal quarter, Monro had 1,263 stores, as well as 48 franchised locations. The company closed nine stores during the quarter.
