“Looking ahead, we remain very optimistic about the opportunity to complete additional acquisitions in fiscal 2017, and further leverage our flexible business model, which has allowed us to successfully navigate through any consumer or operating environment.”
Monro announced it expects to close during the second quarter on a number of “definitive agreements” to acquire stores located within its markets that are expected to add approximately $40 million in annualized sales. It did not identify any of the agreements at this time, but said it expects the acquisitions to be breakeven to slightly dilutive in fiscal 2017.
On a combined basis, the company's acquisitions completed and announced to date in fiscal 2017 will add approximately $90 million in annualized sales.
During the first quarter, revenue from newly acquired and newly opened stores was $18.5 million, Monro said, including $16.8 million attributable primarily to the 29 McGee Auto Service & Tire stores acquired in April.
Monro also opened seven greenfield stores during the period and closed one, ending the quarter with 1,064 company-operated stores and 133 franchised Car-X stores.
Otherwise the company booked a 6.9-percent decline in comparable store sales, including declines of 3-percent drop in tire sales, 6 percent for maintenance services, 7 percent for alignments, 13 percent for brakes, 15 percnet for front end/shocks and 16 percent for exhaust.
Regarding the McGee acquisition, Monro said this strengthens Monro`s presence in the greater Tampa Bay and Fort Myers areas, Daytona and Tallahassee. The acquisition is expected to add approximately $50 million in annualized sales, representing a sales mix of 40-percent service and 60-percent tires, and is expected to be earnings neutral in fiscal 2017.
Combined with earlier acquisitions in Florida — Hennelly Tire in 2014, and Gold Coast Tire and Martino Tire in 2015 — Monro now operates 86 stores in the Sunshine State, representing approximately $118 million in annualized sales.
The state represents a “significant opportunity for continued store growth and further diversification of the company`s footprint into southern markets,” Monro said.
Based on current visibility, business and economic trends, and recently completed and announced acquisitions, Monro said it anticipates fiscal 2017 sales to be in the range of $1 billion to $1.03 billion versus the previous guidance range of $980 million to $1.01 billion and diluted earnings per share to be in the range of $2.05 to $2.20, as compared to $2.00 in fiscal 2016.
For the second quarter, the company anticipates sales to be in the range of $245 million to $255 million and comparable store sales to decrease 2 to 5 percent.