The following is a summary of the Monro, Inc. (MNRO) Q2 2025 Earnings Call Transcript:

Financial Performance:

• Monro reported Q2 revenue of $301.4 million, experiencing a 6.4% year-over-year decline primarily driven by a 5.8% decrease in comparable store sales.

• Gross margin decreased by 40 basis points due to higher material costs and fixed occupancy costs, partially offset by lower technician labor costs.

• Operating income declined to $13.2 million, which is 4.4% of sales, compared to $22.4 million or 6.9% of sales in the previous year.

• Net income was $5.6 million with diluted earnings per share at $0.18, compared to $0.40 in the same period last year.

Business Progress:

• Monro has seen improvement in tire dollar and unit sales with year-over-year growth in the month of September.

• The company implemented the ConfiDrive Digital Courtesy Inspection Process and an Oil Change Offer, contributing to sales improvements in the service category and alignments.

• They continue to leverage manufacturer-funded promotions, contributing to sequential sales improvement from the first quarter across various service categories.

Opportunities:

• Sales momentum in October was supported by improvements across service categories and tire units, indicating potential for sustained sales performance.

• The focus on underperforming stores and customer service enhancements positions Monro for improved financial performance.

Risks:

• Margin pressures due to a consumer shift to lower-tier, value-oriented tire purchases, which affect material margins.

• Adverse impacts from Hurricanes Helene and Milton which affected preliminary comp store sales, though the underlying trends excluding these impacts showed resilience.

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