Monro President and CEO Brett Ponton cited mild weather in late November and December as having had a negative impact on the company's performance, and said these conditions have continued into January, prompting the revised forecast.
"While we are not satisfied with our financial results, we remain confident in our path forward, though as we have said before, we know it will not be linear," he said, noting that the slowdown followed solid performances in October and early November.
For the quarter and nine months ended Dec. 28, Monro reported single-digit gains in operating income on 6.2% and 6.3% increases in sales, respectively.
Operating income in the third quarter rose 2.9% to $31.6 million on sales of $329.3 million, for an earnings ratio of 9.6%. The sales increase was driven by sales from new stores of $22.7 million, including sales from recent acquisitions of $20.7 million, Monro said.
Comparable store sales fell 0.9% in the period, Monro said, with revenue from tires and front end/shocks falling about 1% and 3% for brakes/alignments. Revenue from maintenance services was on par with the previous year.
The earnings ratio slipped due to higher fixed distribution and occupancy costs as a percentage of sales, partially offset by lower material costs as a percentage of sales.
Net income for the quarter fell 7.8% to $18.9 million.
During the quarter Monro added 27 company-operated stores, ending the period with 1,289 company-operated stores and 99 franchised locations.
For the nine-month period, operating income rose 3.1% to $101.3 million on sales of $970.5 million. Comparable store sales were down 0.1% versus 2.4% growth in the fiscal 2019 period. Net income for the nine months fell 1.7% to $61.8 million.
Commenting on the results, Mr. Ponton said Monro "focused on the elements within our business that we can control" and made great progress during the quarter on its strategic transformation.