ROCHESTER, N.Y. (Jan. 28, 2014) — Monro Muffler Brake Inc. reported double-digit gains in operating and net income and sales for the quarter and nine months ended Dec. 28.
The company attributed the development to reduced product costs and payroll control and improved leverage of distribution and occupancy costs.
The earnings improvement through three quarters prompted management to raise Monro's fiscal 2014 earnings per share projection roughly 3 percent from earlier forecasts to a range of $1.63 to $1.66; that would be more than 25 percent ahead of the fiscal 2013 figure, the Rochester-based company said.
Sales for the full year should hit $830 million to $835 million.
Monro President and CEO John Van Heel attributed the quarterly gains to "more normalized winter weather" and Monro's strong operating model, while also noting that the "economic environment continues to weigh on purchasing behavior and we continue to see our customers delay purchases and trade down from higher cost automotive maintenance and repair purchases."
Nonetheless, Monro remains "confident in our ability to further increase our market share and deliver strong overall sales and earnings growth, in both strong and weak markets, by leveraging our business model and pursuing our disciplined acquisition strategy," Mr. Van Heel said.
For the quarter, operating income jumped 43 percent to $26.9 million as cost control measures overcame a sales mix shift to the tire category related primarily to recent acquisitions. The company added 13 locations and closed two during the period, ending the quarter with 951 stores in 22 states and the District of Columbia.
Net income increased 36.2 percent to a record $15.3 million on 13.8-percent higher sales of $216.7 million.
Monro attributed the sales increase primarily to added revenue from new stores and a comparable store sales increase of 0.3 percent. Comparable store sales increased approximately 2 percent for brakes and 1 percent for tires, while comparable store sales fell about 1 percent for maintenance, front end/shocks and exhaust, and 4 percent for alignments.
For the nine-month period, operating and net income increased 27 and 23.5 pecent to $73.9 million and $42.6 million, respectively, while sales increased 17.2 percent to $628.2 million.
For the full year, Monro expects trends "will continue to be choppy as the economic environment weighs on consumer purchasing behavior," Mr. Van Heel said.
"As we continue actively managing our business through an environment in which consumers are allocating spending to essential needs, we are hopeful that the winter weather will accelerate sales into the spring season as customers turn to us for repairs and purchases that can no longer be delayed."
The Monro exec went on to say the company continues "to be encouraged by the opportunities we see for additional acquisitions in the near future…. (W)e plan to continue to leverage our strong business model and we are confident that our long-term strategic plan will enable us to continue expanding market share and deliver shareholder value regardless of the economic or operating environment."