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Monro Muffler Brake Inc. on Tuesday reported record third-quarter sales and net income, beating Street estimates for earnings per share.
Net income increased more than 36 percent to $15.3 million from $11.3 million a year ago. Diluted earnings per share increased to 47 cents a share, compared with 35 cents a share.
Analysts had expected diluted earnings per share of 44 cents on revenues of $217.41 million.
Sales for the third quarter ended Dec. 28 increased nearly 14 percent to a record $216.7 million, compared with $190.4 million a year ago. The company attributed the rise to an increase in sales from new stores and an improvement in comparable-store sales.
Comparable store sales—or sales at stores open at least one year—improved 0.3 percent in the third quarter, primarily in brakes and tires.
“We were able to report record sales and net income in the third quarter as we benefited from more normalized winter weather and our strong operating model,” President and CEO John Van Heel said, adding customers continue to perform basic maintenance at Monro stores. “With that said, we believe the economic environment continues to weigh on purchasing behavior and we continue to see our customers delay purchases and trade down from higher cost automotive maintenance and repair purchase.”
The company remains confident in its ability to continue increasing its market share through its business model and disciplined acquisition strategy, Van Heel said.
For the first nine months of the fiscal year, sales increased more than 17 percent to $628.2 million from $536.1 million. Comparable store sales fell 0.2 percent. Net income increased nearly 24 percent to $42.6 million, compared with $34.4 million in the first nine months a year ago. Diluted earnings per share increased to $1.31 from $1.07.
For the fourth quarter, Monro is forecasting flat to 1 percent growth in comparable store sales. The company expects diluted earnings per share of 32 cents to 35 cents, compared with 25 cents in the fourth quarter last year.
For the full year Monro anticipates flat comparable store sales and diluted earnings per share of $1.63 to $1.66, compared with $1.32 in 2013. The company expects sales for the year to be $830 million to $835 million.
Monro’s most recent acquisition of 10 stores in Delaware, Kentucky and Maryland will represent nearly 5 percent of total annual sales, the company noted.
“Our long-term outlook for the industry and company remains positive, although we expect trends will continue to be choppy as the economic environment weighs on consumer purchasing behavior,” Van Heel said. “We are hopeful that the winter weather will accelerate sales into the spring season as customers turn to us for repairs and purchases that can no longer be delayed.”
Shares of Monro stock (Nasdaq: MNRO) were down slightly at $55.16 midday from Monday’s close of $55.29.
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