Monro (MNRO) investor relations material

Executive summary

• Achieved three consecutive quarters of positive comparable store sales growth, with Q2 FY26 comps up 1.1% year-over-year despite a 4.1% decline in total sales due to the closure of 145 underperforming stores.

• Adjusted diluted EPS rose to $0.21, a 23.5% increase from $0.17 in the prior year quarter; net income for Q2 was $5.7 million.

• Completed closure of 145 underperforming stores and advanced real estate exits, generating $5.5 million in proceeds and $7.6 million in net gains from asset sales and lease terminations.

• Enhanced digital marketing, customer segmentation, and operational improvement initiatives contributed to outperformance in targeted stores.

• Entered next phase of Operational Improvement Plan with AlixPartners, focusing on store operations, marketing, merchandising, and customer experience.

Financial highlights

• Q2 FY26 sales were $288.9 million, down 4.1% year-over-year, mainly due to store closures; comparable store sales rose 1.1%.

• Gross margin expanded 40 basis points year-over-year to 35.7%, driven by lower occupancy and material costs.

• Adjusted operating income was $14 million (4.8% of sales), up from $12.6 million (4.2%) last year.

• Net income was $5.7 million, with adjusted diluted EPS of $0.21, up from $0.17 last year.

• Inventory reduced by $11 million sequentially from the previous quarter.

Outlook and guidance

• Expects positive comparable store sales growth for fiscal 2026, despite recent softness in demand.

• Full-year gross margin expected to be consistent with fiscal 2025, with operational improvements offsetting cost inflation.

• Store optimization plan to reduce total sales by approximately $45 million in fiscal 2026.

• Anticipates year-over-year improvement in adjusted diluted EPS and sufficient cash flow to fund all capital priorities, including dividends.

• Capital expenditures projected at $25–$35 million for the year.