ROCHESTER, N.Y. (Jan. 12, 2016) — Unseasonably warm weather in the northeastern and north central regions of the country hampered third-quarter sales for Monro Muffler Brake Inc.
The auto service chain said sales in the quarter ended Dec. 26 were weaker than expected due to a lower demand for tires during an unusually warm fall and winter.
However, the company experienced positive comparable store sales in regions not impacted by the warm weather conditions, including positive mid-single digit comparable store sales in its southern markets.
Tire category comparable store sales fell about 4.5 percent for the quarter, due to a 7.5-percent decline in tire units, offset by a 3-percent increase in average selling price vs. the prior year period.
The company's store traffic for the quarter was flat, as were comparable sales in non-tire categories, taken as a whole, Monro said.
Comparable store sales in key service categories remained positive, including an increase of about 2 percent in brakes and 6 percent in alignments.
Rochester-based Monro said it will release its fiscal 2016 third-quarter earnings on Jan. 26.
The company said it anticipates sales for the third quarter of fiscal 2016 to be about $239 million, with comparable store sales declining by about 2.5 percent. Its previously expected third-quarter sales to be in the range of between $247 million and $254 million, with comparable store sales growth of 2 to 4 percent.
For the fourth quarter, Monro is forecasting sales of $232 million to $240 million, based on a comparable store sales increase of 2 to 4 percent.
“While comparable store sales increased 4 percent in October, we experienced a decline of 9 percent in November followed by an increase of 0.4 percent in December,” said President and CEO John Van Heel, “As winter weather has normalized, we are encouraged by the improvement in comparable store sales in the first two weeks of fiscal January, which have increased by approximately 9 percent on positive tire sales and traffic trends.
“We remain confident in our ability to drive strong top and bottom line growth organically and through our disciplined acquisition strategy. We continue to be very optimistic regarding the significant number of acquisition opportunities we see in the marketplace.”
Mr. Van Heel added that, “to capitalize on acquisitions and other business opportunities, we are also in the process of increasing our credit facility from $250 million to approximately $500 million, further strengthening our ability to drive long term growth.”
Monro operates a chain of stores providing automotive undercar repair and tire services in the U.S. operating under the brand names of Monro Muffler Brake and Service, Mr. Tire, Tread Quarters Discount Tires, Autotire, Tire Warehouse, Tire Barn, Ken Towery's Tire and Auto Care, The Tire Choice and Car-X.
The company currently has 1,031 company stores in 25 states and is the franchisor of 135 Car-X stores in 10 states.