Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Monro (NASDAQ:MNRO) Reports Sales Below Analyst Estimates In Q1 Earnings, Stock Drops 12.2%

Published 2024-05-23, 07:37 a/m
Monro (NASDAQ:MNRO) Reports Sales Below Analyst Estimates In Q1 Earnings, Stock Drops 12.2%
MNRO
-

Stock Story -

Auto services provider Monro (NASDAQ:MNRO) missed analysts' expectations in Q1 CY2024, with revenue flat year on year at $310.1 million. It made a non-GAAP profit of $0.21 per share, improving from its profit of $0.08 per share in the same quarter last year.

Is now the time to buy Monro? Find out by reading the original article on StockStory, it's free.

Monro (MNRO) Q1 CY2024 Highlights:

  • Revenue: $310.1 million vs analyst estimates of $320.2 million (3.2% miss)
  • EPS (non-GAAP): $0.21 vs analyst expectations of $0.30 (30.9% miss)
  • Gross Margin (GAAP): 35.5%, up from 33.4% in the same quarter last year
  • Same-Store Sales were up 0.1% year on year
  • Store Locations: 1,339 at quarter end, increasing by 40 over the last 12 months
  • Market Capitalization: $776.3 million
“We expanded gross margins, both in the fourth quarter and for the full fiscal year. We continued to mitigate a challenged topline with actions to reduce non-productive labor costs, including overtime hours in our stores. While an industry-wide deferral and trade-down cycle has lasted longer than most in our industry would have expected, we are navigating weakness in the tire market well with our actions and our recently implemented initiatives. We have made foundational progress that will enable Monro to reap benefits when tire volumes recover”, said Mike Broderick, President and Chief Executive Officer.

Started as a single location in Rochester, New York, Monro (NASDAQ:MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.

Auto Parts RetailerCars are complex machines that need maintenance and occasional repairs, and auto parts retailers cater to the professional mechanic as well as the do-it-yourself (DIY) fixer. Work on cars may entail replacing fluids, parts, or accessories, and these stores have the parts and accessories or these jobs. While e-commerce competition presents a risk, these stores have a leg up due to the combination of broad and deep selection as well as expertise provided by sales associates. Another change on the horizon could be the increasing penetration of electric vehicles.

Sales GrowthMonro is a small retailer, which sometimes brings disadvantages compared to larger competitors that benefit from economies of scale.

As you can see below, the company's annualized revenue growth rate of 1.2% over the last five years was weak as its store footprint remained relatively unchanged, implying that growth was driven by more sales at existing, established stores.

This quarter, Monro missed Wall Street's estimates and reported a rather uninspiring 0.2% year-on-year revenue decline, generating $310.1 million in revenue. Looking ahead, Wall Street expects sales to grow 1.5% over the next 12 months, an acceleration from this quarter.

Same-Store SalesA company's same-store sales growth shows the year-on-year change in sales for its brick-and-mortar stores that have been open for at least a year, give or take, and e-commerce platform. This is a key performance indicator for retailers because it measures organic growth and demand.

Monro's demand within its existing stores has barely increased over the last eight quarters. On average, the company's same-store sales growth has been flat.

In the latest quarter, Monro's year on year same-store sales were flat. By the company's standards, this growth was a meaningful deceleration from the 4.5% year-on-year increase it posted 12 months ago. We'll be watching Monro closely to see if it can reaccelerate growth.

Key Takeaways from Monro's Q1 Results We struggled to find many strong positives in these results. Its revenue and EPS missed analysts' expectations as its same-store sales fell short of estimates - management blamed a weak tire market for the underperformance. Overall, this was a mediocre quarter for Monro. The company is down 12.2% on the results and currently trades at $22.8 per share.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.