MNRO - Earnings call transcript Q1 2019

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Operator

Good morning, ladies and gentlemen, and welcome to Monro, Inc.'s Earnings Conference Call for their First Quarter of Fiscal 2019. At the time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. And as a reminder, ladies and gentlemen, this conference call is being recorded and may not reproduced in whole or in part without permission from the company. I would now like to introduce Ms. President, and Vice at Senior Mulholland, General Secretary Counsel, Monro. Maureen ahead. go Please

Maureen E. Mulholland

you. you morning's thank everyone, joining Thank and this for Hello, us on call.

of of website that to statement is started, as on your the we get attention note section available the I'd be the of on like Information part draw our will presentation we harbor morning, www.monro.com. call slide the a Before referencing presentation. safe Investor X this at please a that to

the and may management safe this does the statements other such call, or unanticipated are any such to by admission forward-looking forward-looking made undertakes press morning's the fully the statements limited on The revisions this any statements and hereof to or relating not and on store reminder businesses. attention consumer not and reflect are the In litigation, occurrence or to of company's the in a located, cost circumstances with in call made with the Private risks include and that including Act to rates, these within constitute renovations expenditures, acquired events. to these events circumstances service generally any of call company the release. to necessarily demand associated the which like in risks obligation fluctuations an risks may described of harbor leverage auto reiterate are in after company and risks markets competition today's risks or events release in I Reform in sensitivity retail dependence the SEC. as As release primary to statements of of would uncertainties to that interest affecting and the which related with filings inclusion material. more statement XXXX, relating your are integration These to described The stores Securities person need uncertainties or date accordance to for repair, and but debt no for be Litigation the other provisions confidence publicly to uncertainties capital and reflect Monro the related

of statements today's such to on will call, be the management presentation. comparable measures. as discussion today's of include GAAP non-GAAP the supplemental Reconciliations financial certain included information part of Additionally, measures

you like With over the I'd to these Executive out President Chief way, to and Brett, formalities call the may of our Officer, Brett turn begin. Ponton.

Brett Ponton

and everyone. today. joining you, good morning, for Thanks us Thank Maureen

strategy, teammates positive drive made as to our Before our diving organization every Monro.Forward and our we've would and ongoing for work company. change and effort effective executing they progress do the into I thank like we continue across outstanding day first the towards quarter our performance across the their to

new in in first quarter. fiscal great the off business performance to We top-line strong start our as a momentum sustained are led to year in the

As we achieved sales on tire business. our improving X, traffic ticket, strength driven brake and in slide by of a illustrated average X.X%, higher and comparable store

tires, our comp Lower as which by improvement the encouraged saw April quarter, in arrival, report that positive increase and category. May. of to first pleased but in in to X% We're sales experienced online in We further ticket than are return online sales the from The offset When comparable in continue we packages in end and changes fiscal continued experienced brake an by over These strategy to month-to-date. brake we store we quarter resulting line, through maintenance sales led ended with up our the sales launch and our our comparable when sales pricing and positive and a online XX% strong of of we higher to was in a stacked comp metrics May changes quarter more unit the end/shocks, two-year June, the accelerated optimized store XXXX. our momentum by performance our improvement in we pricing Day top made than at off in continued We our looking started past improving are a negative while conversion encouraged tire sales and at from category, sales trends which very few tire comparable year-over-year. transaction to our our comparable and sales July during volume. discussed as trend calendar instillation. operating increase adjusted the spring expect is shift. we last In months, strategy. the very we further first alignments declined by performance, category, stores strengthening service categories, the repair of of year, late In service at our result of increased tire evidence to a increase also comp Memorial largest brakes demand for unbundled Investor with an offset supported store notable appointments. respectively, also sales were by in and saw X.X%, comparable approximately the store we Good-Better-Best by our the brake Day in we particular, our X% June drove into front more sales X.X% due were

the our in which packages opportunities our as more brake During a pricing capitalize continue saw to about in in strength southern the will demand also markets, a outperformed I which further on moment. Geographically, identified to optimize talk we this of strong northern markets. quarter, we our we the category,

million from added new acquisitions. including stores Lastly, $XX.X revenue, million in $X.X recent

of annualized tires. sales to the XXXX. in of be existing Missouri month, we marketplace expected a to on have acquisition pleased the XX% of and continue Tire we to in this that X, favorable completed and Sawyer accretive slide eight locations breakeven filling Company to earlier report EPS sales $X in mix are market the and with acquisition These opportunities acquisitions of capitalize million XX% are fiscal service to Turning

XXXX acquire that sales agreement in These markets. XX% of annualized Additionally, with a have breakeven existing sales mix in fiscal service to seven be we announce are a expected are and pleased $X we tires. million stores and to to of stores definitive signed XX% EPS to

expect pipeline completed and close to thus and opportunities second XXXX robust $XX annualized stores. fiscal sales, remains M&A with NDAs X represent quarter. our the far in from during transaction Acquisitions with this in to We signed XX million ranging XX announced over

significant highlighted we growth to post-acquisition annual represent Investor XX% with XX% As and opportunities, at close. earnings operate in sales by which three an potential highly additional industry we growth in potential our a in year Day, fragmented a M&A XX%

able the leading to integration we ROI more be believe Additionally, effective we going through to strategy, drive execution our of higher forward. Monro.Forward will

across Moving our are Eastern services Amazon.com to collaboration slide provide thrilled we on to X, installation their to customers tire to United States. the announce with

We announced designated select from and this morning, option. press and the we ship-to-store will by during Amazon.com in who complete the tire As these appointment selected be tires services online any the tires customer. and our the at available a release to location purchase receive customers an installation

customers Service As tire upon Monro customers Baltimore these strategy, multiple in collaboration retail are over with our success installer all the launch, area our major preferred this will Auto be to agreements. Amazon milestone a of Greater XX marks the part available initial course year and the In Mr. Monro.Forward Amazon of of Tire of the locations omnichannel next services our at states. available and in at our across Centers builds development to line our the presence

a still business, our of of While a strategy. our retailers representing small are with online fraction omnichannel agreements our component key

are traffic driver a said notable add-on and have are to these conversion store, in new inspect are recommend customers as these can increased agreements customers before, their services we Once driving tickets. we higher As these of XX% and vehicle Monro.

and to to build long-term to we're CRM our add Importantly, one-to begin also database able them one-relationships.

forward preferred develop star to experience our installation to customers providing our We operational to delivering services consistent to online looking XXXX entered X excellence to enhance on to and and Amazon customer-centric tire fiscal are engagement presence a our customers. We installer continue and driving leverage our efforts. tire focused intend agreements

would pillars update During our outlined so like key on Investor strategy made progress an Day, provide the to far. and the of we've Monro.Forward I our we

stores. customer that strategic with to moving investments contributed and believe launched on surveys highlighted paying improve program conversion are results we base pleased our which January. initiatives in since our we online to importantly we show reputation X, entire progressing to XX,XXX we reviews management am planned reputation As our our from of resulting traffic customer and has program we higher our improved with technology We to experience, across the online to feedback solicit quickly to traction very pleased more higher in February. and store report Starting and customer increased are slide initiatives. management launched implement the program search pilot receive than our I traffic the off Early late that driving are as efforts online as in

We the has from are across stores our across online all review feedback operational led our improvement insights which to star also improvement sites. leveraging this significant overall data actively rating to and customer in drive

stars X.X and since up program. all-time to the received stars before We star of started review beginning our X.X end XXXX rating compared the significantly which of rating, stars online the X.X year, we company across June have an average online now average of of as to location that's our has improved this

believe store the across reimage report initiative we refresh store delivering will our X, and consistency slide the help experience our five-star to We our and is to to progressing align Turning are markets appearance our schedule. driving stores also of a modernize on customers. pleased that

of quarter and York store XXXX. are in the clear Rochester, third each schedule defined pilot standards, the of of appropriate beginning in our needed refresh have identify launch stores, brand New currently our fiscal reimage the scope We for on of XX to

our CRM Now, us initiatives customers our to let to specific messages in insights needs. recommendations we customer expect and with analytics-based strategy on enhance marketing and vehicle engagement. data enable an on our their update quarter, to leverage line second provide which and data based our deliver tailored In will our launch to customer-centric service me the plans, to platform data-driven

customer is higher objective relationships long-term Our retention. drive to develop one-to-one and customer

omnichannel earlier, priority we mentioned out starts website customer online and is presence our modernization our another mobile platform of It our to in roll our second of which our the XXXX. plan regarding presence quarter key the engagement fiscal initiatives. with building As through

improvements value using our capable to our on mobile upgrading new We're convey new our user upgrades We a making and also are these website. to our better content architecture and to experience. proposition add website customer

signs during optimize store making the in launched success Next, first progress our across to early packages initiatives product we with offering; service good are the very and we of of that base are we our by excited our Good-Better-Best quarter. our particular

margin. package To quarter, increased very the for at first during While brakes pricing this this, high see our demand our gross raised leveraging going we'll combat prices late to opportunities and launch package on pleased to the further demand we continue identify analytics pressured are quarter category pricing forward. brake to in including the to we quarter in package slightly our sub-optimal the optimize brake capitalize

process providing clearly Importantly, by trade-up our opportunities. in education our defined Good-Better-Best for attachment customers, options packages the managers allowing and in-store for increased simplify customer our store selling for

During tailwinds the margin positive we initiative of to quarter, and continue teams see we market how on these remainder our ramp XXXX. efforts through as trained from up assortments the our this to expect fiscal to

quickly our productivity we initiatives. some and Lastly, of have engagement team moved on

optimize first support improved As sales our to step we trends and sustained to stores our to technicians store traffic understaffed momentum. staffing, added a

cultural our teammate's resulted changes organization support professional turnover development first to commitment we in quarter. the the are lower the also making and strong in across Our

to fiscal initiative some are get staffing turnover XXXX. staffing us margin performance, to these line pressure as positive our stores and we ramps should will model during optimization which flat on overstaffed quarter also gross impact coming combined achieve store in our temporary which to up the we and factors store back resulted the top we reduced pleased quarters, While greater a staffing through overall right-size expect plan normalize will efficiency. our allow with In us the of

store, of technical As appropriate to our part services level that in we each rebalance optimization needed. ensuring with for have staffing the staffed skills technicians store our also level stores are plan efforts, of skill the the

data-driven to cloud-based, first addition In staffing scheduling provide additional With drive that, implement on staffing in turn of system our the optimizing quarterly efficiency. performance. head over XXXX we and call who'll financial the further to I'll a to count, our Brian detail expect to quarter fiscal store

Brian J. D'Ambrosia

good and Brett you, Thank morning everyone.

$X.X Turning million stores driven from by sales top-line increase the to to including delivered doors new million quarter. comparable was $X.X from decrease increased approximately million. X.X% year-over-year offset solid of sales and first from X. closed We $XX.X of Sales by $XXX.X of slide X.X% This in performance store a recent million sales acquisitions. in a

line prior XX year days, quarter period. with in had first selling The the

XX company-operated As of locations XXXX, XXX locations of had XXXX. company-operated franchise the stores compared company X,XXX June franchise and June as stores and XX, as XX, with X,XXX

Gross During of the $XXX.X quarter, closed we period. gross X. margin million acquisition. XX the compared of year profit Free or XX.X% the of or sales to million The the decline in first Tire XX.X% was mix stores for and first $XXX.X prior reflects added quarter the sales impact Service expected sales company-operated

sales acquired primarily and tires As gross commercial operate due the to of business, with respect Service as the we've we at noted, part Free of installation. margin, wholesale Tire mix previously the to a without higher the higher tires; of acquisition wholesale lower mix and locations a sales

sales also to a when costs year by decreased the for margin XX the the sales points compared prior of due a was expenses percentage gross increased with first relatively XX.X% sales and as related costs or million brake period. in percentage or to a package On million our headwind as $X.X launched sales were approximately initially we high of impacted margin were from of to net year. of in stores. basis, million as primarily a related well million gross $XX.X a quarter prior the the $XX.X Operating packages initiatives, from flat related labor for quarter one-time as Monro.Forward occupancy dollar expenses quarter new for the sales $X.X as negatively costs earlier, discussed XX our including percentage increase material Brett $X.X million of Good-Better-Best store year in The represents comparable costs brake period. Distribution pricing as and staffing initiative. year-over-year XX.X% increased costs from prior basis sub-optimal temporary optimization and store to As

for expense the XX.X%. On lease approximately million last income of to as XX% a of individually decreased quarter as operating increased year-over-year due a Net and quarter, the with with reduced XX compared debt year a weighted variety XXXX $XX.X interest point rate as as Net income rate a other Tax our as Act, declined quarter which The rate excluding associated of rates, the result year debt income was expansion, the to of first and quarter by to quarter connection compared XXXX decreased Monro.Forward for million $XX.X XX% prior XXXX effective The including from compared was non-recurring amount from weighted in fiscal increase coupled fiscal recorded obligations, increased related with the operating U.S. of for period by outstanding $X.XX prime rate in quarter was comparable margin income Jobs prior toward higher capital share to first in of year-over-year cash to per of by none million sales to basis one-time period. share year. points lease XX XX effective last the expense from prior period same year-over-year as as compares to period. the the interest The a store offset to for as X% operations. capital first points fiscal period. for $XX.X the basis, LIBOR paid year year. record debt rate Cuts costs increase higher interest The average federal quarter This the interest to using the million average spreads corporate per million greenfield from for Our year significant. period. for debt for and the earnings is bank and decrease increased flow higher partially and to and diluted last basis to first in $X.XX weighted investments, compared in quarter XX%, XX.X% basis and the XX.X% tax prior-year year-over-year, approximately for was XX.X% the which as by increased $XX first interest the average due same to quarter in largely our well tax acquisitions percentage the our $X.X we the the costs a operating same XX.X% Monro.Forward factors, which approximately well tax compared increased $X.XX of first the

onetime with per year-over-year. these quarter items, last fiscal share same per on $X.XX, complete is slide Excluding year diluted was first earnings share X. earnings bridge comparing period performance XX% the our up XXXX presented A

effects XXXX our with which increase, impact can per of our share combined and recent you a fiscal drove the a the comparable of As from and factors. sales, X.X% performance few store collective offset increase the reform by in tax positive see, was acquisitions, partially $X.XX XXXX

first EPS we sub-optimal the per packages. the brake to share in of the During package $X.XX saw quarter, brake a decrease primarily launch related pricing our previously surrounding discussed

We sales EPS onetime increased our a Monro.Forward, was mentioned impact technician first majority staffing of to this labor $X.XX front-loaded our tax investments our the This $X.XX related anticipate one internal also in our decrease the from Monro.Forward store of completed reinvesting with during percentage nature. $X.XX and of of to to we in These as strategy. expectations, the $X.XX line Of cost savings was were saw continue investments a in previously relating time impact quarter. to with support onetime our largely initiative.

midpoint this $X.XX remain XXXX our and we of achieve EPS well-positioned fiscal As is believe range reminder, target. we the guidance a to

XX. to Turning slide

capital committed strategy a we Monro.Forward our on disciplined also maintaining strategy. are as to execute We allocation

million next and investments $XX in to we spending five our support primarily store plan our we the reimage technology. over run expenditures, at normal highlighted capital rate years, in incremental As Investor above on an Day,

XXXX quarter fiscal expenditures significant the capital in do capital and any not first relating to investments were our Monro.Forward yet million reflect $XX.X of initiatives. Our

to take pillar growth our we remain of plan key to advantage strategy. which of Secondly, continue M&A a opportunities attractive

the first greenfield we including on our X strategy. to completed part quarter, acquisitions expansion During spent store X $XX.X as approximately of acquisitions million

dividend also through our committed million to and We first the quarter. are returning about during program to shareholders capital paid dividends $X.X in

our fiscal leverage solid under $XX remain the ended during to operating quarter. flexibility sheet with maintaining room ample financial generated cash with growth ample we a revolver quarter of We first flow have on strong support increased the strategy. the during focused million approximately ratios covenants. approximately our our and first Lastly, of We by million $XX Debt activities quarter first under from XXXX. balance

on fiscal quarter. that an Now week billion, X% note XXXX turning guidance XXXX to recently our current the while Fiscal sales. fiscal of increase year, the sales extra assume is continues store range billion in This fiscal This to we in on an a cost Please as sales XX. guidance compared announced XX-week now a on be increase and remains for leadership sales slide in global drive fiscal our face X.X% $X.XXX the stable to to compares X.X% and of Based billion. oil tariff acquisitions, XXXX. overall $X.XXX XXXX business to tire and our a of outlook In our a $X.XXX and range comparable compared costs year completed of the XXXX a XXXX position economic industry. to XX-week of and assume X% key anticipate fiscal to fourth sales, differentiator and from to continues to in of previous basis. $X.XXX continues sales to billion week diversified XX was guidance vertically to trends benefited sales to chain integrated supply uncertainties, and fiscal XXXX

margin acquisitions generate assumptions, store be Based we earnings fiscal to share our be these to increase acquisitions. an guidance on diluted X%. of average on million be representing At in expected EBITDA earnings guidance $X.XX, rate to earnings XXXX. to continues earnings approximately $X.XX breakeven from XX% to continue are and continue accretion expect midpoint approximately tax and interest in $XX the range, range growth above per to of Given to weighted $X.XX million is XXXX diluted diluted XXXX based continue approximately comparable to the shares outstanding. $XX sales share approximately depreciation these of expense million. we be of per XX%. a to to XX% $X.XX of million, we $XX.X expect an on This XX.X%, to growth to reflect fiscal Fiscal to amortization includes This to effective be and operating assumptions, fiscal in XXXX $XXX approximately expect

openings. to As before Q&A. always, turn guidance does acquisitions provide or store assume we closing to some Brett remarks future any to back it now our I'll over greenfield not move

Brett Ponton

pleased far by see July. Thanks, momentum first Brian. comparable in To to seen we've conclude, the quarter XXXX. sales this We delivered in fiscal solid so and we are encouraged store continue the through are

the and strategic turn a to the represents shareholders. first look the for execution for to to all we stores the completed continuing omnichannel will our the substantially in to investments critical Taking in the to store to made collaboration operator outlook confident for in Amazon.com development onetime we that, and necessary In into now the of understaffed have staffing now of With traffic on our our our that Monro.Forward, value call while our During with delivering presence. make I remain our related drive over solid continued particular, of XXXX questions. right-size forward initiatives. quarter, investments progress higher majority fiscal consideration, milestone the

Operator

Oppenheimer. today Thank come from our will question with you. And Nagel Brian first

Brian Nagel

Hi. morning. Good

Brett Ponton

Brian. morning, Good

Brian J. D'Ambrosia

Brian. Hi,

Brian Nagel

taking Appreciate you my questions.

maybe few, questions a So, here. quick

regard here First off, to a there's nice with ramp-up been sales, clearly lately.

much of spent potentially sector results improving your Can backdrop for You you the lot versus some that in time you've sales, parse you a as comments. out, repositioning you've how strategic that initial talking discussed undertaken? about at parse an you look reflects can prepared the of out your improving of that –

Brett Ponton

Brian. Sure,

But doubt experienced to certainly pretty our by, a the say in-store all, might I way as the conditions spring it traffic service our difficult to out. created, business. team favorable strong this expect, execution rating And backdrop winter I harsher, around parse the a in more relates would it's think, as you trends. it pretty that normalized certainly the commented say heading I no our which I But we to contributed our credit of services this give again, I lot think this, – into star especially to will As in really first that relates I credit we quarter as online team the also of about. has evidenced to they our favorably brake with improvement executed had like,

difficult came So, our to of course, more backdrop, parse from favorable but with how execution we're much of which, along increase the strong comp team. by a encouraged by

Brian Nagel

in in north and month-to-date, July it's months modest X% reason X% question of My but to here, if look it. Got you a trend, then said monthly explain – I comp least so think May at that, of granular second comps tracking the and, again, were downshift been and recognizing the you've at little you into any apologize, too but June July? that

Brian J. D'Ambrosia

this Yeah, is Brian, Brian.

you by look certainly late QX, if we April that affected think spring. about I the being at talked

so think dynamic. if flowed look a that the the the the once I think of X.X%, quarter into the more and pent-up being I probably that for demand neutralized up little you trend at that's And probably June reflective into even actual weather May balance there of for was some

Brian Nagel

come some It's sales time. typical how is We've we question, of obviously, I my you've but And early about regard for sense. Okay, quite that the profitability been makes to talked Monro and for know perfect to about, think Amazon. on sales you? working final then versus Amazon via should this with

Brett Ponton

adding we our portfolio we're as to as installer know, relationships for Well, commented with relationships you other on previous about calls – a currently extremely preferred them enjoy Brian, tire and with that relationship retailers look, we've excited Amazon others. online

As an also ticket we've new and installations, company that it $XXX economics, that brand, and the shared average neighborhood our the of these in of $XXX. historically average we've relates on those customers to experienced to of of our to ticket north roughly compares are XX%

Amazon on believe will to to currently no other dissimilar reason relationship have economics the we're be online the experiencing We partners. what with that

Brian Nagel

the you. thank congrats on far. Great, And so progress

Brett Ponton

Brian. Thanks,

Brian J. D'Ambrosia

you. Thank

Operator

Next, with hear we Matt Goldman Sachs. Fassler from

Matthew J. Fassler

good a the a of you tires of know on couple on consumers of then Thanks questions order guys, couple the demographic and customer typically questions demographics transaction of a on and Amazon, overlap what seen Amazon, based I at lot, Monro? who heard, have customer core sort On online, of who you've business. to morning. the tire on that does based or the you've their what relative what on what of full is the Amazon profile

Brett Ponton

indicate buying that Amazon, see, online disproportionate there, across course. early we're probably tire relationship the vehicles, interest I online. demographics an retail you if reason in partner tires, I'll cut look is retailing think almost X%. And into take establishing interest that this – are at But into in previously, that with shared level we roughly consumers one, of no think with other there levels, it. innings, consumers, we across I a Brian. with consumer would think of that certainly, we believe as every trend Matt, stage, to online tire over-indexing expect into just doubt consider to wouldn't in just as tires course, general partners rate cars, that continue that have have online And or platform we industry would no today. enthusiasts, suit people inclusive in follow But online tires that we've we our consumers at buy is I reports of that that we penetration it for that

Matthew J. Fassler

installers, an you either the limitations with have could terms there the Amazon have of other could in regions particularly on you with where online are partnerships And you in they or other sellers operate? or

Brett Ponton

non-exclusive ways. both This No. relationship, a is

Matthew J. Fassler

relate questions at once, for just follow-up so My might Brian. you. Got I'll get core out them to the they both be business,

of spoke course pricing also about like each dynamics, looking abate spoke you some should on it which of over you sounds the Just soon. pretty the about brakes and year, some labor

final So, one had that. is that bit helpful about and fade and on any comments the the relates is should if talk that be margin inventory we than up saw to pressures you could numbers, which very just you on of more the a well. for my And have what what anticipated, pressure timeframe as then the elements you would

Brian J. D'Ambrosia

Yes. Sure.

the margins, my I a about script basis. basis talked in XX to a related comparable So decrease store point on

brake You for as being as primary labor. that reasons, talked two the the well about the packages reasons

QX we brake as actions of in already the drove each comments, talked We pricing. at look individually, transaction of our Brett We taken XX% about quarter. comp at So, to for the his volume. had saw, brake up if we those brake one end a related X%

a bit and back expect that QX. gave we in line we back made little quarter flowing and clearly, adjustments late that to start to the on So, immediately in get through in there, price

around second pieces two there's The thing labor, that. to

is obviously, in The understaffed in The quarter attacked first already first through we to and that putting of place overstaffed stores, be started we piece solution. through and able traffic really next improving speak reduction that the paper-based going will us be the scheduling piece as that trends. support to in optimize to to, our will is a we've about we're to allow technology from stores that system move a to to muscling What related QX. that our a that move this technology us we our getting scheduling through is more on scalable our talking manual do and to through basis proving we're as staffing allow scalable that really

Matthew J. Fassler

Great. And on inventory?

Brian J. D'Ambrosia

to quarter. the increase the related in Service Free primarily is On inventory,

we about, talked decent Free If business. a pretty have, Service, you they wholesale look as at

that some So, acquisition. assigned to there's inventory tire

Matthew J. Fassler

inventory feel sustainability, quality you have what the and durability, that of good about you? And

Brian J. D'Ambrosia

Absolutely.

Matthew J. Fassler

guys. much, Great. Thank you so

Brett Ponton

Thanks, Matt.

Operator

from Next, we'll Nelson Stephens. hear Rick with

Rick Nelson

Thanks. Good to... like morning. I'd

Brett Ponton

Hi, Rick.

Brian J. D'Ambrosia

Good morning.

Rick Nelson

environment. acquisition the about ...ask

for to agreement, environment paying maybe You completed multiples you've speak if you're store stores; got another the could competitive that eight the deals? seven and you

Brett Ponton

comments, Rick, prepared robust pipeline our look, going in very for we forward. mentioned M&A a transactions I see As

at mentioned specifically Day, we're the one multiples not of comment to things in the forward I on As is going we're Investor going the seeing marketplace. that

However, historically. I in that are are can paying that with line that in seen very historical multiples for we've we that much trends size share deals for

deal multiples that in appreciation at size. noticeable no So for that level

Rick Nelson

that driver? Sales to Okay. to that – the pointed quarter or you promotional a activity did Good progressed, know. strengthening well up pick did as was as that

Brett Ponton

a activity it by quarter were strong contributing our as attribute the traffic to promotional there. progressed quarter. or to team stronger that But the trends business attribute improving in-store we factors wouldn't well promotional consistent certainly and really I that relatively I is as our saw two activity. execution throughout in

Rick Nelson

segment certainly ask maintenance of I other or And, was a lagged the services, you could that Okay. weather effect quarter that factor? the other if categories, some some the finally, in

Brian J. D'Ambrosia

I think in softness of bit that. just was little a that that

the I that delayed extent that maintenance we the think the softer other I back that think those certainly a as of not categories, brake saw did. bit that little progressed, quarter some to the come category and April

Rick Nelson

Got you. luck. a good lot and Thanks

Brett Ponton

Thanks, Rick.

Operator

Jordan with now Jefferies. We'll Bret hear from

Mark Jordan

Jordan is you This Mark on for Thank good and Bret. morning.

Brett Ponton

Good morning, Mark.

Brian J. D'Ambrosia

Good morning.

Mark Jordan

morning. Good

the You Just does X.X% to or maintained share do know, the maybe, we share? How thinking quarter the during that gained compare comp market? that about here. think Monro,

Brett Ponton

we look at sector, in companies like to in the feel I slightly market we're reported. Well, if Auto we line Parts as other publicly conditions above traded think Mark,

we is and tire data at also we line, look On the shipment in if side of above business, industry performance on our slightly feel tire industry side. like the performance not tire our

Mark Jordan

sounds X% the here. particular new it broad-based QX to then for brakes of continuing strength in rate on? the categories any kind like Okay, roughly run in great. maybe more Are more we is strength or And it seeing

Brett Ponton

of I coming our namely, continuity, think, Good service of Yeah. brakes. business out QX

our as related mix Good Our team tire price tires. business store execution by in to on remains stable.

to trend continue QX into that expect and QX season the tire selling QX. We through at

Mark Jordan

you break when and to that one expect think and to stores of forward? normalizing should the here technology were impact more And have of about Is we the margin maybe on what the the going during gross that can able last labor the great. out are an reducing we primarily through overstaffed the costs impact? Okay, question quarter, how

Brian J. D'Ambrosia

Yeah.

think you margin and stores that if think operating to that. comp brakes about I staffing, about XX-basis-point and contributors you think pretty margin, gross equal they're for pressure

already of each So, I We're that's about we've one. the the both. pricing. Like brake on attacking the scale taken said, actions

even for And technical platform to to that. a appropriately competencies at going getting I by our like the of Brett really On it's But particularly that's an and about bit optimize, the got immediately. muscling really right-sized skilled time, be we which talked of already to pricing, current same have the operationalized think said, a greater little more we the at and the this a as enabled labor exercise attacking and we've stores opportunity effect technology. an getting are we impact

Mark Jordan

taking you Okay, Thank for great. my questions.

Brett Ponton

Thanks, Mark.

Operator

from with now We'll Benjamin SunTrust. Stephanie hear

Stephanie Benjamin

the Thank afternoon. question. for you Good Hi.

launching of kind Just kind there of trading looking dynamic could a – since this and clarification, early and more that pricing? just was you dynamic service timeline since kind as of more products at that pricing the the you have the just Good-Better-Best and where just what's Thanks. that also you the found kind then just of the you sub-optimal across on up down on or the And really just if other color brake has provide raised consumers experienced more during offerings? of case were strategy response of kind what been quarter, follow and

Brett Ponton

Stephanie. Thanks,

us, had step flow saw felt is this brakes up on the as like say, improvement the the pricing elected we some first was and once talked the execution that had in our that as well can that as attribute our remain I that as hold to We real. on felt we terminal, the the the was as we quarter. an level again unit relates to well about, quarter, market And analysis unit opening in launched on volume to as solid we in as were we point like up conducted some closely And think, packages competition extremely in relative we price quarter three make the As pricing commented, the points. that we package and to move – volume store to brakes, market prices pretty appropriate we adjustments allowed to first throughout options. on that up we I the to experience to and that price still we we take strong as other quarter confident there exited the the consistent above, And watch through opportunity to volume. team's saw

relates breaks level on other FY XXXX, to with a the in services of, comfortable help balance margin with those to And level similar the launched gross the And line QX. as well. would close team a coupled saw compression our we our full of we we to packages expect. process As in just of refined the where expect say, getting it on on I the year oil we is QX in approach execution improve, packages, that back the throughout to in store basis and gap at more pricing get us

Stephanie Benjamin

much. so Thanks Great.

Brett Ponton

Thank you, Stephanie.

Operator

will Thank question-and-answer turn conclude session. remarks. or today's I for to any will now that And Ponton closing Brett over conference you. the additional

Brett Ponton

I'd support like your all continued you thank and to of for us for Monro. today joining

We solid the the with be ahead. progress not so far, pleased day. are have a we and about the updates Have forward as more further providing to made we opportunities could great excited We year look progresses.

Operator

today's conclude call. your you participation. does That conference Thank for

now disconnect. You may

Monro (MNRO) 26 Jul 182019 Q1 Earnings call transcript