ROCHESTER, N.Y. (July 18, 2006) — Monro Muffler Brake Inc. saw 4-percent higher sales in the first quarter—in part from the chain's purchase of ProCare Automotive stores—but “challenging” economic factors dampened results, the firm said.
Monro reported net sales of $98.4 million, up from $94.6 million. New store sales increase $7.4 million, including $5.5 million from the 75 ProCare stores acquired in April. On the other hand, comparable store sales fell 2.9 percent compared to a 1.7-percent gain in the prior-year period.
However, tire and maintenance service categories posted strong results with gains of about 9 percent and 3 percent, respectively, on a comparable store basis, the company said.
Gross profit rose a slight 0.8 percent, but net income fell 2.4 percent to $7.56 million from $7.75 million last year. Selling, general and administrative expenses took more of a chunk out of gross profit, rising to 30.1 percent of sales, on the negative comparable sales, an increase in advertising and the addition of the less profitable ProCare stores.
“As anticipated, the first quarter proved to be challenging as macro economic factors continued to cause consumers to defer automotive maintenance and repair purchases,” said Robert Gross, president and CEO. “That said, our reputation as a trusted service provider helped us drive gains in our core tire and maintenance service businesses, increasing our market share in these important categories. Further, by successfully retaining our customer base, we are well positioned to benefit when consumers can no longer defer such expenditures.”
Mr. Gross added that consumers probably will return to normal spending later this year. As a point of optimism, he pointed to July's comparable sales being down just 1 percent.
Rochester-based Monro operates 702 stores—under the Monro Muffler Brake and Service, ProCare, Mr. Tire and Tread Quarters Discount Tires names—in 18 Eastern and Midwestern states.