Monro Muffler Brake (NASDAQ:MNRO) Posts Earnings Results, Misses Expectations By $0.06 EPS

Key Points

• Monro missed quarterly earnings expectations: The company reported an adjusted loss of $0.01 per share, $0.06 below estimates, while revenue of $283.6 million declined 1.8% year over year and slightly missed forecasts.
• The outlook weakened: Management expects fiscal 2027 comparable-store sales to be flat to slightly down, with margins flat to slightly lower and higher interest expenses following its refinancing.
• Some initiatives are showing progress, including improved performance at coached stores, 8% comparable-sales growth in batteries, and better traffic trends. Monro also completed a $375 million credit facility and continues to review strategic alternatives.

Monro Muffler Brake (NASDAQ:MNRO - Get Free Report) posted its quarterly earnings results on Thursday. The auto parts company reported ($0.01) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.05 by ($0.06), FiscalAI reports. Monro Muffler Brake had a return on equity of 0.80% and a net margin of 0.71%. The company had revenue of $283.64 million during the quarter, compared to analysts' expectations of $284.06 million. During the same period last year, the company earned $0.21 earnings per share. Monro Muffler Brake's revenue for the quarter was down 1.8% compared to the same quarter last year.

Here are the key takeaways from Monro Muffler Brake's conference call:

• Second-quarter performance weakened: comparable-store sales fell 1.8% to $283.6 million, operating income declined to $2.6 million, and the company reported a $0.05 diluted loss per share versus $0.18 of earnings last year.
• Management now expects fiscal 2027 comparable-store sales to be flat to slightly down, with gross margin flat to slightly lower and higher interest expense of $28 million to $32 million following the refinancing.
• Operational initiatives showed early traction. Among 146 stores receiving District Manager Toolkit coaching, sales grew by mid-single digits and bottom-line results improved more than 20% year over year; the toolkit is now deployed across a majority of locations.
• Marketing and merchandising efforts are supporting customer engagement, including 8% comparable-sales growth in batteries for the second consecutive quarter, year-over-year growth in maintenance services, improved September traffic, and preliminary October comparable sales that were flat.
• Monro completed a new four-year, $375 million senior secured credit facility and substantially paid down its supply-chain financing obligations, while its strategic alternatives review remains ongoing with no stated deadline or assurance of a transaction.

Monro Muffler Brake Stock Performance

MNRO traded down $1.52 during trading on Thursday, hitting $12.78. The stock had a trading volume of 1,343,964 shares, compared to its average volume of 955,322. The firm has a market cap of $399.40 million, a PE ratio of 57.96, a P/E/G ratio of 11.02 and a beta of 1.08. The company has a current ratio of 0.49, a quick ratio of 0.16 and a debt-to-equity ratio of 0.50. Monro Muffler Brake has a 12 month low of $11.06 and a 12 month high of $23.91. The company has a 50 day simple moving average of $13.29 and a 200-day simple moving average of $16.19.

Monro Muffler Brake Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Tuesday, September 8th. Investors of record on Tuesday, August 25th were issued a $0.28 dividend. This represents a $1.12 annualized dividend and a yield of 8.8%. The ex-dividend date was Tuesday, August 25th. Monro Muffler Brake's dividend payout ratio (DPR) is 509.09%.

Analysts Set New Price Targets

MNRO has been the topic of several recent research reports. Wells Fargo & Company cut their target price on Monro Muffler Brake from $16.00 to $15.00 and set an "equal weight" rating on the stock in a report on Friday, October 23rd. Stephens decreased their price target on Monro Muffler Brake from $20.00 to $17.00 and set an "overweight" rating for the company in a research note on Thursday, July 30th. Wall Street Zen lowered Monro Muffler Brake from a "sell" rating to a "strong sell" rating in a report on Saturday, August 1st. Zacks Research raised Monro Muffler Brake from a "strong sell" rating to a "hold" rating in a research note on Monday, October 5th. Finally, Weiss Ratings lowered Monro Muffler Brake from a "hold (c-)" rating to a "sell (d+)" rating in a report on Tuesday, September 29th. Two analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, Monro Muffler Brake presently has a consensus rating of "Hold" and an average target price of $24.00.

About Monro Muffler Brake

Monro Muffler Brake, Inc, doing business as Monro, is an automotive service and tire retailer headquartered in Rochester, New York. The company operates service centers across the United States under brands that include Monro Auto Service and Tire, Mr. Tire, Tire Choice, Car-X, and other regional names.

Monro provides replacement tires and a broad range of maintenance and repair services for passenger vehicles and light trucks. Its offerings include brake and exhaust work, wheel alignment, steering and suspension repairs, shocks and struts, oil changes, batteries, air-conditioning service, and other preventive maintenance.

Founded in 1957 as a single muffler shop in Rochester, the company expanded through organic growth and acquisitions into a nationwide automotive service network.

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