MNRO - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning ladies and gentlemen and welcome to Monro Inc.'s earnings Conference Call for the Fourth Quarter and Full Year Fiscal 2020. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder ladies and gentlemen 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 Ms. President, and Vice at Senior Mulholland, General Secretary Counsel, Monro. Maureen ahead. go Please

Maureen Mulholland

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

presentation executive the corporate.monro.com/investor/investor-resources. is available started, as the in or to Investors will get the note our except on could release with like our includes scope Monro's and result referencing call company website information in customers, most by duration on as draw from The of of include attention slide comments a at be that to forward-looking we may call we two to pandemic I'd I remind statement and this events officers, presentation, of morning's employees. SEC and results presentation filings Before participants a its affect update our The today. law. factors outlined forward-looking required that section the morning, Harbor whether If earnings Monro's please Safe significant any that otherwise part or significant those the to about that COVID-XX your the our and could on revise the future uncertainty some statements the of Actual our future obligation relating impact statements and this intention on of suggested performance. are as new by future results materially any disclaims or differ

supplemental presentation statements the the Executive release. include that will to President call be I'd GAAP be Ponton. intended included like Chief comparable management's today's and information our discussion in substitute call, earnings are turn measures to such With Brett to financial and Reconciliations comparable today's over our on not which Brett? to Officer, of to as measures. part GAAP certain and Additionally, a of non-GAAP supplement measures for of

Brett Ponton

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

lines the including all the functioning workers essential during healthcare to keep like who take COVID-XX Before a to and are and front would on we begin, safe those moment working other pandemic. thank to I community our

also Our impacted with been have this thoughts health who economic are unprecedented all crisis. and those by

remain all sincere stores who work our difficult teammates like these continue during my to Monro. hard quality appreciation to for would our customers open essential extend our to service times, to As the as with they expect businesses provide I

to As through while committed this highlighted uncertainty. slide of and are three volatility on navigating we three, period priorities

teammates, our First and foremost, our the priority. remain top and safety customers, communities of well-being and

on lastly, initiatives to from focused to business to to continue Second, execute Monro.Forward on we needs. we maintaining our and continuity strategic crisis. And emerge are our continue this stronger support customers' operations adjust

Turning cleaning four, prioritize all we to health in in our all to have and we enhanced and procedures aspects implemented as work social of including distancing slide stringent safety stores. our protocols safety business,

the closely federal follow COVID-XX We to local, situation and continue officials. are guidance from monitoring state, and

operating reduced staff schedule, a support working are stores remotely where Our on is possible. while our

guests. in quickly we As adjust key drop operations our services contactless now evidence best customers and offer current our ability our serve environment, to of to to the our

actions for are COVID-XX. protective expiration asset by and stores in protect have them have equipment we crisis teammates of biggest the our this to vacation a personal teammates impacted our providing number Importantly, during and of extending including support been who days intended taken and our

our structure business our protect on able and thoughtfully to cost maximize continuity COVID-XX. demand further we steps and response to to our down financial five, Moving the on quickly operations flex financial strength lower to flexibility adapt strengthen our took slide to and We're and in to are focused environment.

to at match labor hours and capacity store reduced appropriate operating have we strategy, this of demand. part lower As are

also to our bolster scaled spend digital and presence. marketing our have down We redirected strategically

in without we place significant to future Importantly, our can continue current customer contingency needs. meet supply chain plans to leverage and ensure put diversified we disruption and have

resumption environment. today, strength provide liquidity As on that with started our demand, are ready and financial our balance see would like capital to ample improving the sheet business provide operations. structure but we will I support reiterate capitalize and a an us Brian later in flexibility update to we to to sales have on our liquidity significant

We are prudent also strategic decisions. about our allocation capital and

we to While investments we initiative all activity other M&A we have our time. we Monro.Forward for have during the the flow challenges the this until this we execution presented to visibility. and of by basis us future. uncertain and strategy, we allow positive near-term as on environment, Overall, us deferred reimage mitigate despite measures rebrand sets well the cash remain during operate gain committed crisis, taken non-essential expect well our demand lower up to the as headwinds have current better store which Similarly, paused in the a

better strategy well to expect Finally, organization COVID-XX operating following the we time as this changes using make our our we are pandemic. Monro.Forward drive that we is progressing performance, and across emerge will further

Turning of consistent reimage rebrand to our in-store operating standardized call implementing some these in and focuses store our detail. and creating developments appearance on strategic with I'll greater Playbook. Beginning six. which we initiative; largest recent slide review program, store our procedures, Monro a which more

our XX stores with the of in by encouraged stores the acquired We our this During line our transformation. very substantially recently completed of we of have quarter plans. completed performance remain that the transformation California

As on previously, and brand This increases our over significant we sense. banners, our it optimizes where tire retail shifting tire focusing our consolidating to lift. portfolio, revenues, a our we awareness shift makes brands noted are driving service sales brand

of are COVID-XX. rebranded of reported increase in store this excluding comparable sales in still weeks the a stores by the when report pleased quarter, the March, last fourth to two While our that we innings were impacted we process, are which early

during fourth weather As conditions markets. expected, our the reimage mild stores our were challenged quarter, in the northern given

we during the to advancing position our strategy. crisis, While pausing committed strengthen we to this initiative are cash Monro.Forward our remain

firm planned the of areas closures Monro a our provide analytics a our has partnered were response This accordance to existing in clear, not real previously and locations. estate for portfolio market stronger our COVID-XX. analytic stores assess company customer segmentation allowed To are of drive specific our geographic data, with store demographic in to and As vicinity underperforming mentioned, performance in us and have to closure. long-term to to identify with these model we be

operating important million step closure of on an in drive approximately by we efficient more an As will first and stores to the part the a of one-time portfolio quarter this portfolio XX we This in an stores organization expect fourth our closed end adjustment optimizing by income close the the $X.X XX adjustment, to six stores improve of and basis. annualized believe these is quarter. additional

to technology. our on investments Moving critical in

a We competitive are our the position. allow us organization changes to the that confident we're from environment across in emerge current implementing stronger will

network Our has progressing we on system, it schedule have upgrade, rolled to first is by a and out digital including been rolled more to across new initiative the base This quarter. our of infrastructure expect than end store out stores. phone XXX the

customer new added digital continues our With allow drive to a and to sophisticated customer that this we will stores provides flexibility driving demand traffic a to execution this centralized to recover. more call are our phone responsiveness. creating approach system, to as will significantly Importantly, us improves infrastructure and center be critical

of we driving trends our us new our to be the rapid number of management category. launched tool track margin expansion markets. demand during and category tire our allows stages system price assortment, in instrumental which a the pilot dynamically and quarter, adjustments will This tire in Additionally, make our in pricing largest to long-term

align use the since quarter, store to a moving us staffing make ramp will seamlessly model technology-based up we for of tools, strategy completing the very broader pandemic. structure COVID-XX a able of model headwinds Overall, organization our to ready making our the we schedules tool. staffing are once are with strategic we staffing staffing the normalizes, to last beginning organization Lastly, The has change critical that rightsize demand be cloud-based our This progress in we to labor the ensuring these to supporting pleased the the also will model environment our trends. critical were technology-based optimize forward. be we endured necessary which to transitioned several weeks to with effectively, management over and allowed despite important our decisions

today Finally, our additional expanded option and to X,XXX for installation tire both have now announced the XXX over pleased of with that we an stores Western collaboration we've services with at Amazon across to available Eastern this are United locations. our States,

feedback online rollout across collaboration continue and initiative with solid and customer organization. this We to receive expansion other finalizing this to important furthering year. to have of our tire forward states more We is by and this engagement XX are smooth and broader success than the all agreements builds response the in strategy. on customer-centric X,XXX omnichannel of to at very look metrics locations track option are this step upon of the strong pleased satisfaction efforts program our the This of available and retail in our an in July

we team's As I experience a our to customers. am dedication very flexibility proud COVID-XX our the five-star agility of crisis, navigate to providing and

will us has we pandemic to we present business for expect structural response subsides. opportunities to our the and Our changes the COVID-XX in the new multi-year strengthened impact our transformation when even mitigate to ability stronger emerge additional are COVID-XX to making

down April, Now, quarter store color business our we X.X% the I'd with early update, like fourth we in some the line comparable more quarter. In during performance. to sales provide on provided reported

to spread was February as weeks we in in of our mild the improvement experienced when however last of mid-March resulted sharply for were the northern stay-at-home the weather which quarter. of in significant our put changed drove and spring Our performance weather an a the comps, onset in two COVID-XX challenged curb We in conditions March by traffic orders this encouraged January place winter markets. in which were early drop in

sales respectively. XX% We XX% and first April to restrictions be impacted approximately in significantly date in COVID-XX the the store May comparable month-to-date quarter down with by continue our to and

by states week. the by as rate comparable during believe decrease decrease the a line we've past By April However lift we stay-at-home expect brakes run encouraged category performance saw trends X% early begun have X% and orders top May maintenance as in and to XX% fourth subside throughout government in week represented in XX% we the shocks store our we decrease quarter, are improvement and a gradual restrictions quarter. a in We approximately of each point sales the continue low in evidenced if traffic in our of decline in alignment. experienced many recovery recently decrease XX% seen tires, front-end signs an the we in to

northern conditions. As outperformed were which our by markets our impacted markets southern mild expected weather

and performance the I'll that, provide turn which With actions COVID-XX have the taken of the our most detail position. we pandemic. over on our severely additional concentration impacted financial Brian financial has been region in stores call a the who'll Additionally Northeast by the to we've strengthen to high

Brian D'Ambrosia

Thank and good everyone. you Brett morning

Slide like fell to Turning X.X% quarter. the detailed I'd overview X.X% performance driven primarily to X, a million, more year-over-year Sales of by to in $XXX.X sales. same-store decline this our provide

XX Brett began a million in that January and winter during quarter distribution from we in period. the costs of fourth new decrease and primarily decrease period. from As to as increased selling fourth store store partially closed restrictions weather comparable acquisitions, had XX.X% prior from March, million lower start was including comparable February, performance XX.X% slow improvement was saw previous stores Sales early as lost stores The with offset from and year month. decreased of our mentioned by sales increase of quarter a points $XX.X on XXXX spring million. a fiscal $XX.X middle of substantially days sales, XXX to had occupancy This we the in sales. our due an basis in by COVID-XX the weather in margin the fiscal year in conditions with largely quarter markets to impacted line fixed in sales we the leverage onset the in percentage mild in approximately costs of northern these the of while recent Gross XXXX with with an $X.X

recognized the of to Operating prior in for closure previous rebates slower as costs vendor XX.X% in expenses new year-over-year year of million XX.X% sales prior compared million in by $X.X or year incremental period. million to operating increased period impairment million our we quarter $XXX.X primarily planned portfolio was expense of optimization decrease store inventory the impacted costs for turns XX as The of driven period. year mentioned, compared million were $X.X Additionally, net related The which the previously to store Brett to costs, the a a well or lower quarter COVID-XX sales increased additional increase compared costs stores. as Monro to to and to percentage related impairment $XX.X our due during by Forward sales. comparable in related store $XX.X with increase reflects the as the also expenses sales initiatives,

fourth Our $X.X quarter same operating the million for was income for compared million quarter the last $XX.X to year.

last rate operating fourth to year. XXXX debt Greenfield the is expansion, the purchase well and flexibility period. debt The as increase under a as an weighted associated to Net revolving million, was compared leases. pandemic. primarily outstanding our with COVID-XX million million increased quarter acquisitions approximately As financial period new of basis X.X% provide decreased as related rates, prior quarter compared in the credit year $XXX our average sales, with in facility income and to to weighted increase as well recorded same points as in percentage $X.X fourth debt lower million of to prior to period. prime our fiscal due an to by the in acquisitions XXXX average approximately The for the interest lease year borrowing the for in fund outstanding The fiscal of during connection finance increase $X.X compared XXX by the quarter interest expense $X.X the rates interest fourth to and increased LIBOR lower as year-over-year for X.X%

additional Income $X.XX $X.XX quarter million to tax the million tax income For the prior per quarter settlements net period. earnings the the the for for diligence compared planned in of share year This we a $X.XX, $X.XX fourth of expansion. in $X.X pretax related fiscal was measure costs closures, of fourth to Monro share $X.XX million income per the quarter loss of of in related $X.X income the fourth to per XXXX. related $X.X per Forward initiatives, million of per adjusted per share which costs acquisition fiscal compared recognized million compared cost of non-GAAP to of to fourth $X.XX to quarter, of excluded quarter to year fiscal integration million for store $X.XX $X.XX of and in XXXX, $X.XX store the $XX.X XXXX per fiscal related expense which fourth $XX.X initiatives to cost. was fiscal diluted was compared of benefit of loss quarter share was Monro impairment impairment to headquarters related cost Diluted quarter $X.XX XXXX. of share of XXXX, share $X.XX diluted litigation earnings our fourth to compares earnings $X.X per fourth a period. quarter excludes pretax Net in due share related share and loss the and fourth Forward share diluted prior the per of to costs, per Adjusted share for

fourth quarter. during greenfield three locations the we opened Lastly,

reminder, well locations average store million the annual add As of on $X as acquisition four greenfield expected in operations. a construction Greenfield approximately as to stores one to are sales. include each new

in share to and litigation initiatives, of and settlements $X.XX per billion. For record fiscal benefit X.X%. share share diluted and share, to full sales measure per new Forward costs comparable Forward to per the an due sales share decline acquisition expansion. earnings the of increase $X.XX. headquarter which was diluted integration offset per XXXX, additional $X.XX related net total share were excludes stores XXXX, related to to $X.XX X.X% This to initiatives excludes XXXX one-time acquisitions, $X.XX Monro year million million per a of $X.XX $X.XX was Adjusted diluted $X.XX including per related impairment recent compares share Fiscal costs, store related which earnings $X, adjusted store The earnings per driven $XX.X increased of from share a of company's per by sales non-GAAP diligence fiscal other items. of from a sales by in per costs growth $XX.X costs cost Monro $X.X of a share and from

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

During comparing per fourth three we closed performance stores fourth with the nine. complete XXXX quarter the quarter, added share year Slide A and bridge company-operated fiscal period last on earnings our presented same X. is

primarily during our drop Our winter last COVID-XX-related well performance as January in in significantly mild due the the was to quarter and in comparable store weeks decrease sales, traffic northern weather February. March, of in by the two markets the impacted in X.X% as

translates X% by $X.XX vacation operations per per $X.XX every in for share loss COVID-XX our the pandemic As decrease COVID-XX The noted, to we've our stores. previously sales share impacted due earnings decline per teammates who roughly turns, in also recently acquired quarter. quarter, store extended were at comparable a to approximately by primarily slower inventory in impacted benefits demand and in has

excluded per to impairment I just plant were $X.XX quarter, costs to as as share Moving our additional impacted earnings in by the the per closures adjusted well $X.XX adjustments store from share costs discussed. related share of non-GAAP of per we

our refresh an Forward financial disciplined rebrand store most this take XX. flexibility want Beginning Monro Slide uncertain we with $XX.X to to of initiatives, our time. a million which initiative. related in maximizing approximately our how was million XXXX, during to Turning and moment capital provide update to fiscal are expenditures capital on allocation I $XX notably were strategy, our our

approximately paid $XX dividends Additionally, during including of to on finally, XXXX. fiscal strategy. greenfield we as fiscal part spent one four million the completed acquisitions our store we during year million $XXX acquisitions And approximately expansion in

our capital are and all expenditures current activity reimage have in rebrand store continue mentioned As until with and environment the including deferring pausing M&A earlier, visibility. capital prudent non-critical allocation our to we greater we Brett be and initiative

strengthen by to intended remain XXXX. quarterly expenses In position, $X.XX to Considering cost impact a on record have June on our bolstering are per delivering cash the share positive of focus we mitigate including number of X, committed pandemic. cash taken business working close a These the the the flow addition, to dividend declaration we value with XX, as evidenced of pandemic, flexing June to our of on expected be a measures, our shareholders and the and at paid XXXX shareholder structure the position. to near-term uncertainty allow our of during proactive a basis COVID-XX us SG&A reducing headwinds of actions to capital operate on cash COVID-XX

we flexibility. drew financial Finally, credit down further remaining to million the from facility $XXX revolving our enhance our

Moving XX. to on Slide

Our current to and environment. we the positioned confidence sheet give balance strong solid that navigate liquidity us well are

balance During fiscal operating $XXX and of May equivalents of on XX, approximately XXXX, sheet. we the we of ratio million flow. in $XXX we net $XXX had cash in At times. And quarter as X.XX million debt-to-EBITDA million net the have a cash debt and XXXX, bank generated approximately the fourth end cash of

the and we due not guidance providing at this fiscal time. are to impact surrounding Finally, uncertainty COVID-XX, XXXX of the duration

However, to we've provided some appendix with modeling. financial presentation assumptions in today's of your section the assist

to of we our XXXX, and store we revised activity in fiscal now expenditures As undertake. $XX approximately million the expect capital discussed, on spending $XX amount depending have of refresh previously plans million capital

remain stable tire lower and and year-over-year. to oil and will to supply continue our chain costs slightly relatively We expect leverage global to diverse

store $X.X costs of during by $X.X anticipate fiscal approximately closure a closure benefit stores As expect approximately our of of our optimization, million XXXX. result the XX will we million quarter. in to We incur first income the operating planned these portfolio

actions a I'll our result XXXX. approximately of that, Brett. compared expect XXXX to fixed to it we fiscal our $XX fiscal With to structure, in by reduction as in million back $XX to turn million a flex Lastly, our costs cost

Brett Ponton

Thanks, Brian.

few Before was the across discuss accomplished outlook as a moving crisis as XXXX Q&A, instrumental COVID-XX fundamental long-term company opportunities We changes accomplishments subsides. number I in capitalize to that broader XXXX. once an for and XXXX, wanted moments organization transformation. our our initiatives us growth fiscal to a we year position of our the to take to fiscal in key made will made on well

year on Our our significant largest the refresh rebrand we during accomplishment initiative. made the was progress and store

the number from are completed we branded than branded service we innings XX date, still this a XXX to initiative, stores. in early transformation of key of stores very in tire While more of markets stores to including stores much the rebranding

strong pausing sales this believe long-term focus opportunity driving brand the to to continue are same-store drive our portfolio and sustainable on for growth. we firmly initiative we during business being a we While COVID-XX, continuity time streamline to have

technology staffing we will model, support strategy, which Additionally, will new we of our tool year well year impressive driving pricing critical investments digital made as the including tire operations. pillar diversifying programs phone made new in and system, network of footprint. management expansion. We and launched we our pilot store strides and in margin our as remain long-term during during believe that be infrastructure cloud-based growth geographic a expanding Acquisitions instrumental the upgrade category future a our and the in our

acquisitions attractive long-term of represent Our United dynamic high into ride-sharing. us service as benefit and Idaho vehicles positioning market and the California, shift States, the from to consumer the entry accounts, in as Western to concentration national in well this potential better and Nevada

Louisiana, further the markets. in southern in which acquired stores solidified our position also We

are strategic very during fiscal made We pleased XXXX. we with acquisitions the

collaboration broader omni-channel we've tire these As with I presence noted amazon.com of our create providing company. as expanded an for over efforts our installation now of to earlier, services stores our our X,XXX with part

Finally, improving for our we the on remain laser-focused experience customers.

we base. has results made. Overall, with I paid fiscal challenged in X.X our have off ever, of up proud the very XXXX, am store to a driving progress than More organization committed were the and across consistent our while to efforts end year. five-star for operational customers experience stars rating their of financial our the delivering excellence star at remain Our our all-time

we a know company said number this As we be linear. times, our process not have we and transforming of are will fundamentally

position our and this growth business changes towards committed fiscal in made to are impressive However, we've for making to the goal XXXX. necessary strides long-term we

broader low. for our to and on slide Moving XX Visibility fiscal XXXX. is assumptions currently

as quarter that a prices, While orders they more, low believe consumers by may transportation the COVID-XX, we less likely to or given circumstances. normalizes. significantly supported by fact in recovery and impacted performance our be drive well to to Overall, as environment stay-at-home will demand be expect first abate as fly we begin take anticipate gas we the the public

will making a recessionary and business operating consumers less existing of work on and the trends out pipeline to to thank advantage new believe uncertain our repair Coming own, this more and an forward. consolidator, entire Monro quite and for across M&A this capitalize of would as improved dedication during cars extraordinary will we strong well-positioned industry be to resilient. in I changes crisis, Additionally, opportunities. conclusion, In favorable a going buy of like organization likely our we fragmented taking also these industry they our environment, be the performance cars likely Monro is making currently drive to their attractive time.

will quickly While COVID-XX With year we within emerge on business ability that acted our the the many but unprecedented initiatives for now important our operator well turn and shareholders. the I to that, to has improvements call accomplished long-term pandemic to not over continue deliver navigate elements have made challenging us value subsides. sustainable during across this for to only stronger strategic impact positions the the questions. We an our the a caused business, environment, our on we have as company and control

Operator

be Thank session. you. Thank conducting you. [Operator question-and-answer Instructions] a We’ll now

your line Brian the proceed Nagel from comes question Oppenheimer. of first question. Our with with Please

Brian Nagel

Good morning.

Brett Ponton

Brian. morning Good

Brian D'Ambrosia

Good morning Brian.

Brian Nagel

for you questions. Thank my taking

to trend just So, deeper I Monro is that really into seeing the recent sales here. wanted dive

So, heard recent gave the Brett was down you I think figure which us XX% if correctly. I weekly think I the most last was that number

really have questions -- look stimulus that out you call as companies been your in in to and may than Thanks. seeing have of are we your particularly driver had the trend then ground, share payments are and if I you an ear companies acquisition that uptick efforts other the view some against lot sales Also space seeing say depending stimulus good this the backdrop? a markets. -- current How Are those always run other as Monro we've keeping geography a anything opening in a that? broader on particularly of doing. what with to rate thirdly, sales. job an market there done at you've seeing would sooner you is So, so different And

Brett Ponton

the Brian Thanks for questions.

you with a more me start cadence Let within comp color on performance the quarter. our the of little giving

As you about we mentioned, exited XX%. down March running

closely being of that with think look up it's pretty tracking thing XX%. exit pretty at and driven, I various Now, would we landing fair consumers' We're in we mailboxes in closely with period the And particular the trend gradual what as off from we're that you We're our point the that we've May. at May commented I we in our I think south maybe point that about recovery that largely April first of time. outsized the in low during second the seen some is think or overall then first with. little sources. down half of of driven we're characterized, saw metrics, XX%. in stimulus time, as recovery Brian that down We seeing picking attribute that by the low point a we're down of I to and checks say over that clear that miles was point. down are pleased guess a dealing The mobility just half And improvement mobility the in lines just metrics in we're crisis pandemic terms the half April

checks the of an think a May. of did you, seeing tire little have in the in And and would of increase markets our been stimulus during stores. our the southern I I business directives we to see where April that Geographically attribute mid-Atlantic that time where of they faster concentration some certainly markets to period the first and and probably outsized the Northeastern a we're as during part well. have think business Midwestern severe our half in we markets second of saw a in as recovery we not bit shelter-at-home high-ticket speaking surprising we not recovery significant as the and were

channel we to like visibility I say relates hearing it the to we're and that to feel think As it's we in fair we're checks our what that conversations up in marketplace. pretty have, well relative holding

near-term be it'd certainly claim share this of to a managing taken the think that position our through gaining that post-pandemic. think our share be we've is our a far job I in share done really during we're customers. feel I a well I this of team actions up certainly for this environment. good us I solidified But I to probably think environment. us gainer the taking think really set has importantly in care like And quarter But reach more

Brian Nagel

Well, for Brett. going I so questions there. had to somebody a I three leave else Thank thank chance. want you. it the together, Thanks give to I'm you, detail.

Brett Ponton

Thanks Brian.

Operator

next Our Lamers question Jonathan Capital Please proceed with Markets. the with your of line is BMO question. from

Jonathan Lamers

Brett thank for the million Good guidance morning. $XX you the fixed million to Brian the annualized. $XX and on cost reductions,

additional your sales we can guidance guidance the And I $XX take your leverage the you some thinking you way such get how hours through and annualized Could on us OpEx, QX guess just operating QX said walk more on portions another on portion an that? as store of OpEx trim impact EPS us of Or that take and on about give will some OpEx. think million decline we the then or what quarter, QX? with -- into As can store variable? current are

Brian D'Ambrosia

months. other we is There plowing some this the the in heating ramp operating snow that our operate things to have like for costs question. winter up in is in seasonality Thanks Jonathan we Brian. things the Northeast, expenses tend as in and Yes.

probably off better reducing the that of a run year but basis our rate prorating looking kind year-over-year that it savings cadence doing So, operating at against or of G&A quarter-over-quarter. expenses savings I and you're versus a on on basis straight-line fairly think the prior

Jonathan Lamers

Okay.

EPS layer your impact we year-over-year. the the for then Is in so the operating on would I do that to it? guidance, $X.XX sales, fixed decline believe every and x costs the on leverage And would you way use would you cut

Brian D'Ambrosia

correct. That's

wanted at of we reacted the we to our the which we go get variable did we that to was that Materials take way labor make is the controllable we ticket. those obviously, in we margins. are make to savings. sure and technician care the cost that biggest to looking thing those that themselves technician those was protecting cost first is the assigned variable went labor our we But think to when the at store were about at stores. really And our COVID have stores, labor have variable model in our I as the adjustments

XXXX and that that variable did we feel preserve those FY good we margins. entering historical So we

variable is it that. will then G&A fixed margin against then So fixed cost in to and And against those the flow-through the say savings consistent. safe costs be layer

Jonathan Lamers

Thanks. Okay.

Brett Ponton

every initiatives is profile. have variable for attack around, maybe and scheduling main bit the fixed cost our what think Brian variable can now I a strategically And think lot margin could think challenged in color protect strategic that team you through Brett. was little I'll a we look look your here have And But of really And during clearly not down but two business – runs was learn you become just how traditionally tool. when get XX% in of our more labor the business Jonathan, question. ways proud is in next our this. this minds. And to fixed only said, said, talked reducing as a your job then maybe more I'll let And we that cost I company. of about the you the about little Jonathan to Maybe really to position as this I session a paradigm add to in Brian XX%. business we back terms our key I navigated one we

well. key As the we hourly stores or Brian variable component as was us, said, our to quarter as of well took our largest those a that's the cost as normally and fixed structure take cost what actions managing down in some of variable part labor in made

is the improves. very allows demand to model with crisis here that as business intent flexible emerge a us our to So adapt agile

Jonathan Lamers

of just resumption you've to you're the cash Brett, made reimaging world. the that? acquisitions signposts And And on for up last picking again, for begin initiative? the point looking also putting Thanks for about Could to possibly you and what work the your a to lot. on elaborate post-COVID changes rebranding, prepare

Brett Ponton

through business, to being Yes. identified stores. knew major costs for be some and labor. all we FY we models be management us manage right us full in our We the right And the make with that we in do controllable will. a opportunity significant to expectation talk also technology structural that heading needed if What sets that in a knew would to was year in And going allowed about a stores, ago able to in XXXX, with significant our our very one the was started us which it labor our change that to change to better the a is about during amount undisruptive skill our the of staffing our absolutely was initiative drive major half company. we certain you that that install for the we And first take manage year pandemic as that way pandemic our do have stores – probably and into a our change crisis. which in labor

as to do be that whether not. as period be be, is expect, to So linear be initiatives we've as team set our along, And that's issues we there's balance ahead to going as cloud-based to commented reaction or near visibility going said, sale think I to just And safety we're as here, stays really to But think through least terms clearly on resurgence be uncertainty as really I a like in remain contemplate, what's comp priorities Signpost not gradual of going to of we'll and positive uncertain number it's our out a that I pivoted the some We – and is sheet states pleased looking priorities protecting that going way that me or lot we protect term. come roll technology of at that the had has there scheduling But on and excuse the will we tools, F I implement navigated paved team interim reengaging rather one tool on our one; a look some been that number now to and we period. two, isn't on head – still QX. easy about, as for able about at into that to we're focus then health cash that focus to these or through basis at all despite all would of time think all dealing said our and to we've to provided of quickly established. managed of we really company number the back we're reopen pretty improvements the see tremendous clearly performance. we that And this going cash what amount the to during this our challenges priority Brian liquidity fact to the the and we we've proud think this in start forth. the our and about with.

Jonathan Lamers

comments. those for Thanks Helpful. Okay.

Brett Ponton

you. Thank

Brian D'Ambrosia

Thank you.

Operator

Jordan question next the Please from The Bret proceed with line your is question. Jefferies. from of

Bret Jordan

guys. Hey, good morning,

Brett Ponton

morning. Good

Brian D'Ambrosia

Bret. morning, Good

Bret Jordan

store the that us stores these or from the the could legacy you the that store you I the are you of stores you closure down old what's might road, expansion about closed? some think the network, get of the you sort profile if give sort have closures, look being the are they of evaluate total stores been to And Monro Are as Rochester markets? footprint? think number of sort When of

Brett Ponton

performance we when me think back the communities in. of of you one you the just investments it use in that up, a job and an to converting and and we with brands think our as make we The has it, also I I And Bret of a a as our let that underperforming is the determinations really really potential function at asked operational and the Well segmentation it. made to a well ones really the to that fit factoring deal on through analytics team broader demographics really approach would service early I us, of result and of more helped which tire company you're on give retailer strategy done expected the challenges process of of portfolio underperforming branded think is that one of going those data our with don't. understand see stores partnered that we transformation. which use, And and stores nice color the any or function look markets the stores lift and that

deal it that that that's talked Monro on acquisitions pre-COVID get underperformers. is drug resides, some through a along to Where stores and all we So how are company that surprising stores we the considered about XX not pandemic. virtually that you do, every like you had Bret in probably landed acquisition get you maybe that that grown

probably where concentration think you those a to assets that's our years I give we've Midwest acquired an concentration it's I had way just there XX. with stores maybe If some made in of so, And of with. higher number of outsized geographic its any a to that of underperforming many locations to the had to we've it seems closure to acquired collection begin list of stores be

to our and about expect it's where and think a that I stores in is revenue preserve rationalizing other footprint more customer good we of demand there lot So there density.

contributors have forward-looking of good of at our the remaining being of for our no place We forward. that rest tire analyze this we in on that, the potential store to feel company migrate we from to that going with terms going branded feel as In have intentions We have store. an overlay improvements about of we stores like a between of to we portfolio. viable operational beyond point currently branded portfolio the service a the

Bret Jordan

give with referral Okay. some store maybe existing an Amazon lift us Great. lift to in a you get then XXX or I you've an volume you expect what Amazon a the maybe base on got experience idea stores? as partnership, And mean comp on stores. adding Could that those linked there by EBIT the from

Brett Ponton

if think benchmark metric. pleased enjoyed along the We're a we've share But not the Well to about all expect mean have buy and online tires we with out I retailers. that company. Amazon we about probably that tendency of a going that is the X% we now X% Monro's -- specifically above sell I'd look that with Bret other online. actually from we I very the with one at call tires relationship the we to relationship that with to line installs is, And combine relationship in-store, know, expanded we as track with industry industry of have tendency in you beyond that to what performance and the you consumers metric to said have you do don't we we're

So of consumers that online. tires there's rate low fairly buy actually penetration

the forward is, here related of our material initiatives Forward. not of expectation company to Monro improvement there's a change businesses in is out performance we've Most through as our self-help Our part this. that in expected laid the

Bret Jordan

Okay. then fourth question Could Great. quarter? you a housekeeping give for for the Brian. comps And the us monthly

Brian D'Ambrosia

and X.X% was Sure. Yes. down January was X%. March Feb was down down XX%.

Bret Jordan

Okay, Thank great. guys. you

Brian D'Ambrosia

Bret. Thanks

Operator

Nelson Please Rick with of line question. the from your proceed is question Stephens. Next with

Rick Nelson

Hello.

markets you impacted follow those weather Could January in how minus were that and two summer not in to up minus January the X% in Just that X.X% on performed the February. was February? southern speak trends, the the play

Brian D'Ambrosia

Yes. outperformed in by performance but the north the certainly south mild region, give the We because of specific that don't weather north.

Rick Nelson

warm in positive declines Northeast in that Okay. the you Got those fact weather? occurred the and Were markets in with you. the

Brian D'Ambrosia

obviously performance it basis outperformed. relative it's was The on relatively a --

in -- I the flat was think slightly south. or about positive slightly it

Rick Nelson

the Monro Got you you. stores Forward rooms spending And consumer I'm side and curious your that you and and more initiatives? to behavior your get online how do and How waiting doing time see remodeling might COVID? see impact that to people we in less you strategies other changing as how see

Brett Ponton

Sure Rick.

even change what is the I you you COVID buy been we during category haven't what would we've closely sentiment the of of in doing in that of during one only other that unlike to see seen online, a tires. the retailers amount in that for a And traditional crisis online the pretty can installations tell watching pandemic, course. things and been this expect would shift you meaningful business our that in significant consumer trajectory of post-crisis indicate As we've seller

vehicles to need Given also the the nature need tires, in protect and install that on align vehicle of to to investment tire. those you properly

So brick-and-mortar defensible is in relative very we think position category. to pure our good e-commerce presence strong still play

in we've of bit to expect stores. We as and little consumer social as our things have sentiment lengths you gone store sanitation those would our and all around prepared cleanliness we great remarks, change a to efforts. in And in distancing just seen commented do of

continue drop expect off capability, In to well think customers exit curbside really we addition emphasis that, et for that here. expect interaction. we I And on that beyond that to placing pandemic to service, cetera our mitigate the

So but so other and certainly near-term consumer significant space, -- behavior significant far. in in the shift categories change not you'll maybe see indicate a in like our data would not

Rick Nelson

lockdown that's market the were same-store but there What there's the think to been that week, last open up? terms you I trends? starts seeing you're in demand you Do any when you're down have Okay. given know opened XX seeing differences that in created up? here of markets pent-up and sales

Brett Ponton

part question. of with start second your me Let the

states areas I areas in shelter-in-place they where as As in in in think and our we strength and definite provisions local saw southern or Midwestern and Mid-Atlantic and markets the the commented, our Northeast. shelter-in-home as we are a certainly weren't strong

the in that and say would what markets those we think other pace faster I So seen a than outperformed recovered we've at markets.

I'm me remind question, your again Rick of demand, part what first Pent-up first sorry. part the was? The

Rick Nelson

for Yeah, tires. service pent-up and demand

Brett Ponton

home. of little nature. more think bit business think shop value in outsized May our to see a higher is that tire needed. little services a I arriving second stimulus in with that a are more part Consumers that in tendency ticket, that than category, which higher our have we performance some of the We did in I April of half saw checks into So, other

But early I we certainly there's April a think the on to of that the lift I May. little bit of that, fair second it's driven. enjoyed upon into miles of So, tires, a based say think of it's half outside in pent-up probably think some part demand I

and those need more repairs And vehicles. the those driving vehicles, we more are maintenance I think consumers on out drive of vehicles. they required the homes their

I closely, our metrics that well by the metrics driven pretty track is think tracking saw as I miles industry as before commented companies. the provided we performance technology pretty So mobility to comparably as

Rick Nelson

Thank, make Thanks, Brett. Brian. That sense.

Brian D'Ambrosia

luck. Good

Brett Ponton

Thank you, Ricky.

Operator

of Benjamin Our Stephanie next with SunTrust. from question. your is the proceed with Please question line

Stephanie Benjamin

good Hi, morning.

Brian D'Ambrosia

morning, Good Stephanie.

Brett Ponton

Good morning, Stephanie.

Stephanie Benjamin

discuss on an get expect to we immediate, out of just some tools, level, quarter of standpoint first overall about is staffing first to little you the at we same-store to is Can the really about of, the specific sales and to benefits by same-store to quarter in do the or pricing to miles complete level those to sales flattish really these positive driven bit rolled as would need, be really were you benefits and improve cost-reduction second -- there Thank the tools we as or and what from a return that can you. from the going well management growth wanted kind get of call the as initiatives? bake maybe growth about obviously, to see beyond that the see even -- nothing see be of from just to roll to expected to it improvement margin presumably start trying starts a these beginning think or I'm of some I quarter. it a out? just talk scheduling and rollouts, category high

Brett Ponton

Thanks, Stephanie.

dealing the and with market states being now consumers XX requires brands managing. big different in given the in good in our our in sophistication a me roughly pricing category first dynamic category company. XX and Tires the XX And it's SKUs management over tool. online business have technology. XX,XXX Let to we're that well of start with and complexity a shop tire tendency the and to markets lot that category and is Managing a data largest XX,XXX

a we So make in identified needed investments that. that to some year ago we plus

So that installed we've done the tool.

we by of vehicle on by SKU, that in a make markets we true We strike understand balance pricing elasticity allows is many thoughtful focus to in and us maximum every tries category. price brand a in data-driven retailer way. our And the optimize that cases and by that using to tire where driving type protecting and between on volume, candidly but handful doing have it now to but points the category are very certain that to margins optimizing also your it

this the out created victory of signs on performance the with pricing I model early, this are early result margins think still to we're groups sophisticatedly. initial versus particular category markets initiative, model we've rolled declare more with And on early a that measure we're the we've although control those to our encouraged innings aren't. tire again of too by But the As gross in priced early our it's business expanding that that in this that markets, to our as initiative. seeing in

they built into significant a we've do some ensuring traditional an need. or significant labor like service, our to our business, can As is we guidance business, around opportunity is about, have your as when stores in in our made labor we getting our And in for but scheduling, perform as that we've it margin upon our revenue in a say to talked know, much structural very right, call our of changes relates that that stores store labor the only appointment, to you service dependent Brian to that want consumers the forward model also not yes versus adequate company, retail. driver

too early say. to still again, So,

margin managed form benefit demand But much this I overall to to, the the that the methodology utilizing on opinion going would as also I we've on flexing post those that expect through think related And methodology still that two is, any a extremely use our what way our to labor to scale I too as through as cloud-based tool. initiatives. by uncertainty, think, I would protect point to guidepost pandemic, well we to Stephanie, long-term that down, see improves pandemic say, same we profile intend crisis. to would we're

Stephanie Benjamin

rollout tools the with And us or Helpful. terms some can of from or have update going color in But tools? online out capabilities just expanded terms own just updated we gears then to in forward you. Obviously, website, initiatives. helpful an booking online give partnership. it. of website? switching Amazon of your Or the on of what Thank Monro very that your you rolling Got

Brett Ponton

out of in Okay. a Well, that company. Thanks, have expect, in our road we've our Sure. company we Stephanie. pretty extensive as age, map a would technology laid you

we in say, tool to would our to are I those our implement can we with it technology that better is And tell items stronger are Those, about, store execute a consumer-facing. Some store our much company, upgrading was that's which any talked allows map one investors modernizations to and in in routers which that underlying the making more help stores. flexibility enabling of But store. really managers an the is stores, with there's to was customers prerequisite technology better the tool installing we've shared allow our consumers an externally extensive Cat road of more great infrastructure infrastructure in-store. us experience voice now in I the foundational. which VoIP And that create X how handle us a much new to for initiatives, enable to low other to voltage you, cabling

going that end set towards point to a of around vision to capability, have equipment, make that our ability pure is -- once by investments we forward now unlocks in investments achieving other of we those move create experience. experience on at a our in-store sale the our point. that e-commerce sights upgrading omnichannel And some then better store with then cetera, now our QX. in We So to be et completed upgrading

bit enable a the business the So underlying the have a and out to we in out some of that. still There's lot in foundational year, But pushed needed of I place. we COVID just one think to foundational work and initiative been do. execute little investments given done implement more to has e-commerce

Stephanie Benjamin

Thank Got much. so you it.

Brett Ponton

Thanks, Stephanie.

Operator

Stember Next from with line question with Scott King. question. CL proceed the Please your is of

Scott Stember

morning my and for Good questions. thanks taking Hi.

Brett Ponton

morning, Scott. Good

Brian D'Ambrosia

Scott. morning, Good

Scott Stember

I improving, we've economies, some of industry? how should we it are that just Is when differences a difference down. players us just an of the lot the company preventive the still where Brett, right guys being local seen about are the you the is rate been have sales, geography, or remind while Maybe and now, business are, talking for we industry and guess, overall run across exit a in of does? actually look your your percentage is explaining it maintenance that flattish

Brett Ponton

of that DIY, you're as parts auto come maybe Certainly, the as information. business. players the support mean, assuming I guess have They I do-it-for-me. have think, you well I think, I out with two some if do-it-yourself of referring auto to parts their will, Well, that distributors, parts

versus I more do home DIFM, I makes as work their vehicles home. have think the consumer relative time companies, strength all that some shelter on in in think, have expressed in they DIY which would sense, to

is the there fits we our Northeast in in et little where a in it read our to certainly, the seen quite auto well. improvement tire I just that relates that channel bit we're high And XX% commented, difference all well. pretty can I relative think, channel in there's we a concentration given other regions. have in what in the stores on what meaningful business. probably sense as orders, footprint and checks our doing, parts our the than the commented strong weakness really checks. as business shelter-in-home Mid-Atlantic geographically, our of of There's store auto been and category As think, DIFM, feel different But the parts, the tracking suppliers, we think that in I cetera, The markets from that also we're line we've with represents

markets markets markets speaking, I But certainly remarks, comping Midwestern we to positive. seeing were stringent, cases, where terms markets still in southern some in are we will our the markets, we're that's are seeing. those in pace less our strong -- provisions states. very are I we're shelter-in-place those slow the seeing just volatile shelter-in-home that as faster But our But In recovery I in are will prepared in good that place faster of say, As southern Midwestern recover. and very markets. those think commented say recovery very expect recovery. generally seeing would inconsistent a We're where and all orders were we performance in you seeing

Scott Stember

last just And it. question. Got

amount in forward cost place customers just you the your frame structure? that or of at out in efforts cleaning some environment in store You your extra put about in the allowed talked just distancing, stores social how that normalized time much one a the whether increase could it's a Can from are of perspective. maybe just going

Brian D'Ambrosia

incremental. is It Yes.

able with floor commented to maintain that don't haven't think is we lot incremental, who We to taping it's some waiting in that. we of The are on for we've as the as distance between in plexiglass pretty to place, chairs our time. with business. well some of A products put to savings removing waiting service those room the other fund during material cleaning tremendously supply are been but guests accomplished much do sneeze it the just at guards it, the counter, some

disinfecting teammates. vehicles masks to protective to performance not sanitizer that personal that our is providing customer or wipes we're and to our equipment are material the hand wipe are the down So

Brett Ponton

to the significantly that has challenging to stronger Maybe taken been; again of investments and has we're wanted a and stores at the standards allowed execute to color very Monro big of into of effectively certainly level say, have we've to pandemic Playbook And branding in some part we Scott, in that around age across store brand a I This think playbook situation lot our us stores, cleanliness. if standards part has the portfolio of a those our to our period. and raise or over this can want of our accelerate, turning our to change regardless increased housekeeping our in that our spirit installing our get Monro I stores we as across Forward out credit set cultural I the think strategy, appearance positive. add really And standards store stronger company against the the or made Well cleanliness that. team. standards, standards, Brian. I to

of to well serve. teams the I great sensitive a in done their also as teammates job, our store but are have the well customers and we embraced Our communities as have think protecting that really store, us

So really that enabled change us to accelerate on a front. of lot

Scott Stember

Got you. have. Thank That’s I it. all

Brett Ponton

Thanks Scott.

Operator

floor At turn we've back remarks. session question-and-answer reached for this end our to of time the the management closing I'll and

Brett Ponton

for you and you your joining healthy Thank wish us a interest for Monro. of We thank your week. and Well safe today rest and continued of you. support

Operator

today's you This will your for you. Thank Thank conclude conference. participation.

this your You lines now time. may at disconnect

Monro (MNRO) 28 May 202020 Q4 Earnings call transcript