Monro (MNRO) Q2 2026 earnings summary

Executive summary

• Closed 145 underperforming stores, incurring $14.8M in net closing costs and generating $7.6M net gain from asset sales and lease terminations in Q2; three consecutive quarters of positive comparable store sales growth achieved.

• Q2 FY26 sales decreased 4.1% year-over-year to $288.9M, mainly due to store closures, partially offset by a 1.1% increase in comparable store sales.

• Adjusted diluted EPS rose to $0.21, up from $0.17 in the prior year, with net income at $5.7M.

• Continued execution of operational improvement plan, including marketing, merchandising, customer segmentation, and store experience enhancements.

• Expanded centralized call center, introduced new district manager toolkit, and strengthened marketing and merchandising teams with new leadership and hires.

Financial highlights

• Q2 FY26 sales were $288.9M, down 4.1% from prior year; gross margin expanded 40 bps to 35.7% year-over-year, driven by lower occupancy and material costs.

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

• Net income was $5.7M, with adjusted net income at $6.6M; adjusted diluted EPS increased to $0.21.

• Inventory reduced by $11M sequentially, reflecting improved management.

• Cash from operating activities was $30M for the first half of fiscal 2026.

Outlook and guidance

• Expect positive comparable store sales for fiscal 2026, despite recent softness in consumer demand; no formal financial guidance provided.

• Project full-year gross margin to be consistent with fiscal 2025, with higher margins in the second half.

• Store optimization plan expected to reduce total sales by $45M in fiscal 2026.

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

• Capital expenditures expected to be $25–$35M for the year.