ROCHESTER, N.Y. — Monro Inc.'s operating income for the quarter ended June 30 slipped 3 percent on 6.2-percent higher sales, which the company attributed to new business from acquired stores.
Monro also disclosed today it has agreed to become a designated tire installer for Amazon.com Inc. and that it has acquired Sawyer Tire Co., a Car-X Tire & Auto affiliate with eight locations in southwest Missouri.
Monro's operating income fell to $33.1 million on sales of $295.8 million, cutting the operating margin nearly a full point to 11.2 percent. Net income was up 17 percent to $20.6 million.
Monro attributed the lower operating income to higher operating expenses during the quarter, including costs related to the company's Monro.Forward initiatives and expenses related to opening 45 net new stores.
Monro President and CEO Brett Ponton attributed the firm's "solid" start to fiscal 2019 to business initiatives tied to the company's "Monro.Forward" strategy, which encompasses measures to update how the company communicates with customers by simplifying and updating materials such as service estimates, invoices and inspection forms.
"We believe the rollout of our strategy is progressing well," Mr. Ponton said, "as we make the necessary investments in key initiatives that will enable us to develop a scalable platform to drive sustainable, long-term growth.
"During the first quarter, we addressed our store staffing to support improved traffic trends, reached a critical milestone in the development of our omnichannel presence with our collaboration with Amazon.com, and continued to capitalize on favorable accretive acquisition opportunities," he added.
Monro said Sawyer Tire is expected to generate about $8 million in annualized sales, split 50/50 auto service/tires. It's expected to be breakeven to diluted earnings per share in fiscal 2019.