Q3 2026 Monro Inc Earnings Call Transcript
Key Points
- Monro Inc (MNRO) reported a 1.2% increase in comparable store sales from continuing store locations, marking the fourth consecutive quarter of positive comps.
- The company successfully exited 32 leases and sold 20 owned locations, generating proceeds of $17.3 million in the third quarter.
- Gross margin improved by 60 basis points year over year to 34.9%, driven by lower material and occupancy costs.
- Monro Inc (MNRO) reduced inventory levels by over $7 million in the third quarter, achieving a total reduction of more than $28 million or 16% since March.
- The company expanded its digital marketing efforts, which positively impacted store performance, and plans to continue investing in marketing to drive sales growth.
- Sales decreased by 4% to $293.4 million in the third quarter, primarily due to the closure of 145 underperforming stores.
- Technician labor costs increased as a percentage of sales due to wage inflation, partially offsetting gross margin improvements.
- Total operating expenses included $6.2 million of increased marketing costs and $4.7 million of consultant-related costs for operational improvements.
- Adjusted operating income decreased to $10.3 million or 3.5% of sales, compared to $11.7 million or 3.8% of sales in the prior year period.
- Traffic was down mid-single-digits in the quarter, although this was offset by an increase in average ticket size.
Good morning, ladies and gentlemen, and welcome to Monro Inc's earnings conference call for the third quarter of fiscal 2026.
(Operator Instructions)
And as a reminder, this conference call is being recorded and may not be reproduced in whole or in part without permission from the company. I would now like to introduce Felix Veksler, Vice President of Investor Relations at Monro. Please go ahead.
Thank you. Hello, everyone, and thank you for joining us on this morning's call. Before we get started, please note that as part of this call, we will be referencing a presentation that is available on the investors section of our website at corporate.monro.com/investors.
If I could draw your attention to the safe harbor statement on slide 2, I'd like to remind participants that our presentation includes some forward-looking statements about Monro's future performance.
Actual results may differ materially from those suggested by our coms today. The most significant
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