Monro (MNRO) investor relations material

Executive summary

• Q3 sales decreased 4% to $293.4 million, mainly due to the closure of 145 underperforming stores, partially offset by a 1.2% increase in comparable store sales.

• Net income for the quarter rose to $11.1 million from $4.6 million year-over-year, with diluted EPS at $0.35 and adjusted diluted EPS at $0.16.

• Gross margin expanded by 60 basis points year-over-year to 34.9%, driven by lower material and occupancy costs, partially offset by higher labor costs.

• Completed a major operational improvement plan, including store closures, real estate dispositions, and leadership transition.

• Inventory reduced by over $28 million (16%) since March, supporting positive cash flow.

Financial highlights

• Operating income was $18.6 million (6.3% of sales), up from $10.0 million (3.3% of sales) in the prior year; adjusted operating income was $10.3 million (3.5% of sales).

• Adjusted diluted EPS was $0.16, down from $0.19 year-over-year.

• Cash provided by operating activities for the nine months was $48 million.

• Cash and equivalents at quarter-end were $4.9 million, with $424.9 million available under the credit facility.

• Long-term debt reduced to $45 million from $61.3 million since March 2025.

Outlook and guidance

• Management expects full-year comparable store sales growth, driven by improvement plans and tariff-related price adjustments.

• Store optimization plan anticipated to reduce total sales by ~$45 million in fiscal 2026.

• Full-year gross margin expected to be consistent with prior year; Q4 gross margin anticipated to exceed prior year.

• Capital expenditures planned at $25–$35 million, with sufficient cash flow to fund all capital allocation priorities.

• Management expects higher consumer tax refunds and increased marketing spend to support topline trends.