Monro reports financial results for the 4th quarter and 2022 fiscal year

In the fourth quarter of fiscal year 2022, the company opened one store. Monro said it completed the quarter with 1,304 branded stores and 80 franchises.

Sales for the fourth quarter of fiscal year ended March 26, 2022 (“2022 fiscal”) increased 7.4% to $ 328.0 million, compared to $ 305.5 million for the fourth quarter of fiscal year. ended March 27, 2021 (“21 financial”). ), says Monroe. Total fourth-quarter sales growth of $ 22.5 million was due to a comparable 1.4% increase in store sales over the period and a $ 19.0 million increase in new store sales, largely due to recent acquisitions. This is compared to an increase in comparable in-store sales of 9.4% over the previous year.

Compared to the previous year, sales in comparable stores increased by about 2% and were approximately equal in terms of service and maintenance. Compared to the same period last year, sales in comparable stores fell by about 1% for tires and balancing. Please refer to the “Comparative In-Store Sales” section below to discuss how the Company determines comparable in-store sales.

Gross margin fell 320 basis points to 31.9% in the fourth quarter of fiscal year 2022 from 35.1% in the previous period. The decline was primarily due to additional investment in the number of technicians and salaries to support current and future sales growth. The company estimates these additional investments affected gross margins by 250 basis points in the fourth quarter. Lower-than-expected comparable in-store sales growth also led to higher fixed distribution and placement costs as a percentage of sales. Material costs as a percentage of sales were the same as in the previous year, as the inflationary impact of higher material costs was offset by higher selling prices and a shift towards higher company service categories.

Total operating expenses for the fourth quarter were $ 93.2 million, or 28.4% of sales, compared to $ 86.4 million, or 28.3% of sales in the prior period. The increase against the dollar compared to the same period last year was mainly due to the cost of 41 brand new stores, as well as the cost of due diligence and integration related to acquisitions completed and valued in the 2022 fiscal year.

Operating profit for the fourth quarter of fiscal year 2022 was $ 11.5 million, or 3.5% of sales, compared to $ 20.7 million, or 6.8% of sales in the prior period. Interest expenses were $ 5.7 million for the fourth quarter of fiscal year 2022 compared to $ 6.7 million for the fourth quarter of fiscal year 2021, mainly due to lower weighted average debt.

Income tax relief in the fourth quarter of fiscal year 2022 was $ 2.4 million, including $ 3.1 million in tax benefits due to differences in statutory tax rates from loss-making years to which net operating losses were carried forward. This is compared to $ 2.3 million in tax expenditures in the previous year.

Net income for the fourth quarter of fiscal year 2022 was $ 8.6 million compared to $ 11.8 million for the same period last year. Diluted earnings per share for the fourth quarter of fiscal 2022 were $ 0.25 compared to $ 0.35 in the fourth quarter of fiscal 2021. Adjusted diluted earnings per share, a measure excluding GAAP, for the fourth quarter of fiscal 2022 were $ .20, excluding approximately $ 0.04 per share of costs associated with depreciation of the store, as well as costs for proper verification and integration of acquisitions, and 0 .09 dollars per share of income tax benefits associated with the transfer of net operating loss. This is compared to adjusted diluted earnings per share of $ 0.38 in the fourth quarter of fiscal 2021, excluding $ 0.03 per share related to Monro.Forward initiatives, management transition costs and closure of the distribution center.

“I would like to thank all our teammates and customers for their contributions to the growth and prosperity of Monroe, as well as our shareholders for their continued support. After a comparable 20% increase in in-store sales in the first nine months of fiscal year 2022, the fourth quarter was severely affected by the COVID-19 surge. In fiscal year 2022, we made significant investments in technicians to increase sales and profits. Although this put pressure on the gross margin, it allowed us to capture the growing industry demand for our products and services. We are implementing a strategy to improve our inefficient stores, and we have evidence that our efforts are already working. As we move toward the 2023 fiscal year, sales trends are encouraging. While comparable sales in April were 3% lower than a record April last year, in May the trend was 3% higher on a larger sales base, ”said Mike Broderick, president and CEO.

Broderick continued, “Today [May 19, 2022] we have announced our intention to return our non-core assets for the wholesale and distribution of tires to American tire distributors for approximately $ 105 million. As part of the deal, we enter into a supply contract that will give us better tire availability, faster delivery and better prices. In addition to the financial benefits, this sale will allow us to focus more and increase resources on our retail operations. The proceeds, along with the proceeds from the operations, will allow us to return capital to shareholders through healthy dividends and share repurchase programs, as well as make money on acquisitions. ”

Results for the whole year

Sales in fiscal year 2022 rose 20.8% to $ 1.359 billion from $ 1.126 billion in fiscal year 2021. Comparative sales in stores increased by 15.2% compared to a decrease of 11.1% in the previous year. Compared to the previous year, sales in comparable stores increased by approximately 29% for brakes, 26% for leveling, 16% for front / shock absorbers, 16% for maintenance and 11% for tires.

Gross margin in fiscal year 2022 was 35.4% compared to 35.1% in the previous year, primarily due to higher comparable sales in stores, which led to lower fixed costs for distribution and placement, as well as lower material costs as a percentage of sales. This was partially offset by additional investment in technicians and wages to support current and future sales growth amid improved consumer demand.

Total operating expenses in fiscal 2022 were $ 380.5 million, or 28.0% of sales compared to $ 323.0 million, or 28.7% of previous year’s sales. The dollar’s ​​rise over the same period last year was a result of increased store management wages and store operating costs needed to support the line’s current and future growth, 41 net new store costs, and increased litigation costs.

Operating profit was $ 101.3 million, or 7.5% of sales, compared to $ 72.2 million, or 6.4% of previous year’s sales. Interest expenses were $ 24.6 million in fiscal year 2022 compared to $ 28.2 million the previous year, mainly due to lower weighted average debt.

Net income in fiscal 2022 was $ 61.6 million, or $ 1.81 per diluted share, compared to $ 34.3 million, or $ 1.01 per diluted share in fiscal 2021.

For more information, visit www.monro.com.