Loading...
•
Mar 28, 2020
Monro Q4 2020 Earnings Report
Monro's financial performance was impacted by weather and COVID-19, leading to decreased sales and earnings.
Key Takeaways
Monro, Inc. reported a decrease in sales for the fourth quarter of fiscal year 2020, driven by a decline in comparable store sales due to the COVID-19 pandemic and mild winter weather. The company experienced a net loss for the quarter, compared to net income in the same period of the prior year. Monro is not providing fiscal year 2021 guidance due to the uncertainty of the duration and magnitude of the COVID-19 pandemic impact.
Fourth quarter sales decreased by 0.4% to $286.1 million, driven by a 9.5% decline in comparable store sales.
Net loss for the fourth quarter was $3.8 million, compared to a net income of $16.8 million in the prior year.
The company drew down $350 million on its revolving credit facility to maximize financial flexibility.
Monro announced the planned closure of 42 stores as part of its portfolio optimization strategy.
Monro
Monro
Forward Guidance
Due to the uncertainty of the duration and magnitude of the COVID-19 pandemic impact, Monro is not providing fiscal 2021 guidance at this time. The Company currently anticipates the greatest impact from COVID-19 in fiscal 2021 will occur in the first quarter.
Positive Outlook
- The Company's stores have been deemed essential services and continue to operate on reduced hours, even in states where “stay-at-home” orders remain in place.
- Monro has implemented stringent safety protocols, robust sanitation and cleaning measures, contactless services, working remotely where possible and extended paid time-off for teammates who have been impacted by COVID-19.
- Monro has implemented and continues to adjust comprehensive business contingency plans to ensure that its stores are operating efficiently.
- With a solid balance sheet and ample liquidity, Monro firmly believes it is well-positioned to navigate the current environment.
- Monro has expanded its collaboration with Amazon.com to provide tire installation services at over 200 additional Monro retail tire and automotive service locations in seven additional states across the Western and Eastern regions of the United States, increasing the amount of service locations to over 1,000 stores. By July 2020, Monro expects to have rolled out its Amazon tire installation services to all of its more than 1,200 locations in 32 states.
Challenges Ahead
- Government authorities’ actions to curb the COVID-19 pandemic have resulted in a substantial decrease in traffic since mid-March, which adversely impacted Monro’s financial results in the fourth quarter of fiscal 2020 and has continued to significantly affect the Company’s performance in the first quarter of the fiscal year ending March 27, 2021
- Monro is closely monitoring updates from local, federal and state officials.
- The Company has implemented stringent safety protocols, robust sanitation and cleaning measures, contactless services, working remotely where possible and extended paid time-off for teammates who have been impacted by COVID-19.
- In response to COVID-19, the Company has implemented and continues to adjust comprehensive business contingency plans to ensure that its stores are operating efficiently.
- Given the prevailing uncertain market conditions, the Company has taken precautionary steps to further mitigate near-term headwinds and strengthen its financial position, including: deferring non-critical capital expenditures, including its store rebrand and reimage initiative; reducing store hours and store labor to match demand; reducing selling, general and administrative expenses; temporarily pausing acquisition activity; and bolstering its working capital position.