On May 23, 2024, Monro Inc (MNRO, Financial) released its 8-K filing detailing the financial results for its fourth quarter and fiscal year ended March 30, 2024. Monro Inc is a leading provider of automotive undercar repair and tire services in the United States, offering maintenance, repair, tire, and fleet management services through its network of company-owned service stations.
Quarterly Performance Overview
Monro Inc (MNRO, Financial) reported a slight decrease in sales for the fourth quarter of fiscal 2024, with total sales amounting to $310.1 million, a 0.2% decline from $310.8 million in the same period of fiscal 2023. Despite the additional week of sales in fiscal 2024, comparable store sales decreased by 7.2% when adjusted for days. The company attributed this decline to a strained low-to-middle income consumer base trading down to lower-margin tires.
Financial Highlights
Monro Inc (MNRO, Financial) achieved a gross margin increase of 210 basis points compared to the prior year period, primarily due to lower technician labor costs and reduced material costs as a percentage of sales. However, total operating expenses rose to $99.7 million, or 32.2% of sales, up from $97.6 million, or 31.4% of sales, in the prior year period. This increase was mainly due to higher non-recurring costs.
| Quarter Ended Fiscal March | 2024 | 2023 | % Change |
|---|---|---|---|
| Sales | $310,077 | $310,836 | (0.2)% |
| Gross Profit | $110,057 | $103,800 | 6.0% |
| Operating Income | $10,338 | $6,177 | 67.4% |
| Net Income | $3,700 | $409 | 804.6% |
| Diluted EPS | $0.12 | $0.01 | 1100.0% |
Annual Performance Overview
For the full fiscal year 2024, Monro Inc (MNRO, Financial) reported sales of $1.28 billion, a 3.7% decrease from $1.33 billion in fiscal 2023. The company’s net income for the year was $37.6 million, down 3.8% from $39.0 million in the previous year. Diluted earnings per share for fiscal 2024 were $1.18, slightly below the analyst estimate of $1.40.
Operational and Strategic Insights
Monro Inc (MNRO, Financial) closed 8 stores during the fourth quarter, ending the period with 1,288 company-operated stores and 51 franchised locations. The company generated operating cash flow of $125 million during fiscal 2024 and had total liquidity of $475 million as of March 30, 2024.
“We expanded gross margins, both in the fourth quarter and for the full fiscal year. We continued to mitigate a challenged topline with actions to reduce non-productive labor costs, including overtime hours in our stores. While an industry-wide deferral and trade-down cycle has lasted longer than most in our industry would have expected, we are navigating weakness in the tire market well with our actions and our recently implemented initiatives. We have made foundational progress that will enable Monro to reap benefits when tire volumes recover,” said Mike Broderick, President and Chief Executive Officer.
Financial Position and Shareholder Returns
Monro Inc (MNRO, Financial) paid a cash dividend of $0.28 per share for the fourth quarter of fiscal 2024 and announced a similar dividend for the first quarter of fiscal 2025. The company did not repurchase any shares during the fourth quarter but repurchased 1.5 million shares at an average price of $28.50 during fiscal 2024.
Conclusion
Monro Inc (MNRO, Financial) faced challenges in fiscal 2024, including a decrease in comparable store sales and a strained consumer base. However, the company managed to improve its gross margin and maintain a strong financial position. With strategic initiatives in place, Monro Inc (MNRO) aims to navigate the current market conditions and position itself for long-term success.
Explore the complete 8-K earnings release (here) from Monro Inc for further details.
