GICS Sector : Consumer Cyclical
Monro, Inc.provides automotive undercar repair, and tire sales and services in the United States.It offers replacement tires and tire related services; routine maintenance services on passenger cars, light trucks, and vans; products and services for brakes; mufflers and exhaust systems; and steering, drive train, suspension, and wheel alignment.
Monro, Inc.'s fiscal third-quarter results show sales of $293.4 million, a 4% decrease primarily driven by the closure of 145 underperforming stores. Comparable store sales increased by 1.2%, gross margin expanded by 60 basis points to 34.9%, and operating income was $18.6 million, or 6.3% of sales. Adjusted operating income was $10.3 million, or 3.5% of sales. Net income came in at $11.1 million, with diluted earnings per share of $0.35, and adjusted diluted earnings per share of $0.16, beating analyst estimates of $0.12.
Publication Date: Feb -09
The company generated $48 million of cash from operations during the first nine months of fiscal 2026 and maintained a strong financial position, with net bank debt of $40 million, availability under its credit facility of approximately $425 million, and cash and equivalents of approximately $5 million.
For the full year of fiscal 2026, Monro expects to deliver year-over-year comparable store sales growth, with gross margin consistent with fiscal 2025. The company continues to expect to generate sufficient cash flow to maintain a strong financial position and fund its capital allocation priorities, including its dividend. Capital expenditures are expected to be between $25 million and $35 million.
The company reported continued growth in comp store sales and gross margin dollars, driven by digital marketing efforts, CRM, and call center support. The collective impact of these efforts is expected to drive incremental comp store sales. On gross margin, the company saw a 60 basis points improvement year-over-year, reaching 34.9%, driven by lower material costs and occupancy costs.
With a P/E Ratio of -50.35, P/B Ratio of 1.04, and P/S Ratio of 0.54, the market appears to be pricing in some level of distress. However, the Dividend Yield is a healthy 5.33%, and the Free Cash Flow Yield is 7.87%, suggesting that the stock may be attractive to income investors. The EV/EBITDA ratio is 17.15, indicating that the company's enterprise value is relatively high compared to its EBITDA.
Long-term, the company expects comp store sales growth, solid gross margin, and operating leverage benefits as marketing and store improvement efforts continue to take hold. Analysts estimate next year's revenue growth at 1.6%, indicating a positive outlook for the company's top-line growth.
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Monro, Inc. Declares Quarterly Cash Dividend
Feb -13
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Monro, Inc. Announces Third Quarter Fiscal 2026 Financial Results
Jan -28
Monro, Inc.'s tire segment growth of 4.83% is driven by increasing demand for vehicle maintenance and repair services, expansion of company-owned stores, and strategic acquisitions. Additionally, growing average ticket size, improved product offerings, and effective marketing strategies contribute to the segment's growth.
Monro, Inc.'s 4.83% maintenance growth is driven by increasing vehicle age, rising average repair cost, and growing demand for routine maintenance services. Additionally, the company's expanded service offerings, strategic acquisitions, and effective cost management contribute to its growth momentum.
Monro's brake segment growth of 4.83% is driven by increasing vehicle miles traveled, rising average vehicle age, and growing demand for brake repairs. Additionally, Monro's expanded service offerings, strategic acquisitions, and effective marketing strategies contribute to the growth. Furthermore, the company's focus on providing high-quality products and services, along with its strong brand reputation, also support the segment's growth.
Monro, Inc.'s 4.77% growth is driven by increasing demand for automotive repair services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on providing high-quality services, investing in technology, and building strong relationships with customers and suppliers contribute to its growth momentum.
Monro, Inc.'s 4.65% growth is driven by increasing demand for vehicle maintenance and repair services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on providing a wide range of services, including tires, brakes, and oil changes, has contributed to its growth. Furthermore, Monro's strong brand recognition and customer loyalty have also played a significant role in driving sales.
Monro, Inc.'s 4.77% growth is driven by increasing demand for automotive repair services, expansion of company-owned stores, and strategic acquisitions. Additionally, the company's focus on providing a wide range of services, including routine maintenance and complex repairs, has contributed to its growth. Furthermore, Monro's efforts to enhance the customer experience through digital initiatives and loyalty programs have also supported its growth momentum.
Monro, Inc. offers a wide range of tires from top brands, including Goodyear, Michelin, and BFGoodrich, catering to various vehicle types and driving conditions.
Monro, Inc. provides a variety of batteries from trusted brands, including Interstate Batteries and AC Delco, designed for different vehicle types and applications.
Monro, Inc. offers brake pads, rotors, and other brake components from reputable brands, ensuring safe and reliable braking performance.
Monro, Inc. provides alignment and suspension services, including wheel alignments, strut replacements, and shock absorber installations.
Monro, Inc. offers oil changes, fluid checks, and top-offs, using high-quality oils and fluids from trusted brands.
Monro, Inc. provides vehicle inspections and diagnostic services, identifying potential issues and recommending necessary repairs.
The threat of substitutes for Monro, Inc. is medium because while there are some alternatives to tire and automotive services, they are not highly attractive to customers.
The bargaining power of customers for Monro, Inc. is low because individual customers have limited negotiating power.
The bargaining power of suppliers for Monro, Inc. is medium because while suppliers have some negotiating power, Monro's large scale of operations gives it some bargaining power.
The threat of new entrants for Monro, Inc. is low because of the high barriers to entry in the tire and automotive services industry.
The intensity of rivalry for Monro, Inc. is high because of the competitive nature of the tire and automotive services industry.
| Value | |
|---|---|
| Debt Weight | 21.48% |
| Debt Cost | 5.18% |
| Equity Weight | 78.52% |
| Equity Cost | 9.64% |
| WACC | 8.68% |
| Leverage | 27.36% |
Value: 4.8
Growth: 3.7
Quality: 5.0
Yield: 8.0
Momentum: 8.0
Volatility: 8.0
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Value: 6.7
Growth: 3.3
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Yield: 6.0
Momentum: 7.5
Volatility: 7.0
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Yield: 0.0
Momentum: 9.0
Volatility: 3.3
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Value: 6.0
Growth: 3.3
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Yield: 5.0
Momentum: 9.5
Volatility: 4.7
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Value: 7.0
Growth: 2.4
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Value: 6.5
Growth: 5.9
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Momentum: 8.5
Volatility: 1.3
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