ITASCA, Ill. (Aug. 3, 2006) — Midas Inc.'s profitability improved in the second quarter though comparable store sales fell 3.8 percent after 12 consecutive positive quarters because of high gas prices and consumer uncertainty, the automotive service chain said.
Midas's sales fell 10.3 percent to $45.1 million in the quarter as net income improved to $2.6 million from a loss of $2.5 million the prior year. Operating income also improved to $6.3 million from a loss of $2 million last year.
“Our results this quarter show the financial strength of our franchise business model,” said Alan Feldman, chairman and CEO of Midas. “Despite the current weak retail sales environment, we were able to overcome this headwind and achieve our profit targets through careful management of our expenses.”
Tire sales grew more than 14 percent, Midas added, as maintenance revenue also grew. Sales in brakes and exhaust were weak.
Mr. Feldman said he expects some retail demand to return in the second half of the year as consumers cannot wait much longer for service.
For the first half of the year, sales fell 12.1 percent to $87.7 million. Net income rose to $6.4 million from $100,000 last year.
Itasca-based Midas operates more than 1,800 franchised, licensed and company-owned shops in the U.S. and Canada.