Mr. Van Heel noted that Monro was encouraged by gains in service business as reflected in positive comparable year-to-date sales in key service categories, including oil changes, brakes, front end/shocks and alignments.
“While we are disappointed these trends have been offset by deflationary pressure and continued customer deferrals in the tire category,” Mr. Van Heel said, “we are encouraged by our competitive position.”
Rochester-based Monro noted that comparable store sales increased approximately 10 percent for alignments and 2 percent for brakes but fell roughly 1 percent for exhaust, 2 percent for front end/shocks and 3 percent for tires and maintenance services.
Based on the nine-month results, Monro anticipates fiscal 2015 comparable store sales to be in flat to slightly down, but overall sales to be in the range of $900 million to $905 million. This will reflect the impact of the closing of 29 Monro satellite locations at BJ's Wholesale Club stores.
Dilute earnings per share should be up 11 to 14 percent to $1.86 to $1.95. Earnings will reflect costs related to incremental warehousing and logistics costs related to the increase in the company's tire inventory in advance of the U.S. duties on imported tires, higher healthcare costs, higher due diligence costs in the fourth quarter and slight dilution from the fiscal 2015 acquisitions.
Mr. Van Heel added that Monro's long-term outlook for the industry and company remains positive, “although we expect trends will continue to be choppy in the near term.”
Nevertheless, he said Monro is well positioned to manage our business in this environment and will continue to pursue “attractive acquisition opportunities” created by the challenging operating environment.