MNRO - Earnings call transcript Q2 2021

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Operator

Good morning, ladies and gentlemen, and welcome to Monro Inc. Earnings Conference Call for the Second Quarter Fiscal 2021. [Operator Instructions]. I would now like to introduce Ms. Maureen Mulholland, Senior Vice President, Monro Counsel and Secretary at Monro. ahead. go Please

Maureen Mulholland

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

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

certain remotely to measures to the which information Mellor, non-GAAP Interim supplemental Executive release. measures. Additionally, on Monro's over today's be be With comparable call morning joining of during for GAAP presentation Rob our Board part measures, and of comparable and this statements call. Chairman the that, GAAP today's for Reconciliations financial discussion I'd is Officer, to Rob? this earnings management like intended turn us a as included and substitutes who to Chief to in call, are include supplement will not such

Robert Mellor

us joining to call good Executive Chief second us. you and team. and the overview Rajkowski, leadership everyone, Operating Chief Vice Today, the I'll senior will Monro And Officer, and performance, before our executing financial morning, discuss an for initiatives. over of and our outlook Executive our thank President the Brian and President, provide our pass quarter you, Thank Officer, Vice Rob progress open Maureen, we've we'll through Financial then D'Ambrosia, forward we for broader call will walk made up questions. strategic performance

privilege new CEO, board As of our the to we role have the continue forward, permanent into while CEO. path a identify to interim I the had step works

to leading building and the a team Corporation, with development us. opportunities of the I Holding services front to years XX career, strategy, Earlier construction Materials materials of about remain on know, throughout Monro.Forward professional provider & you XXXX. the leadership senior homebuilders I in the appointed from and and as the Board being Building in and of in Chairman Board CEO may Monro's Directors rejoined of Chair Board XXXX contractors. I served board of of our positive my served closely XXXX execution As XXXX very in I the worked and before for

a built We journey tremendous platform sustainable growth. long-term scalable progress solid have foundation create to our in a made transformational for and

of highest priority. the direct the Chair, been strategic of As the Board continued into insight I the execution has have priorities The Monro.Forward board.

plan am transition. While a committed ensure permanent in deeply Board I my ensuring continue after the is my smooth role tenure CEO I CEO to a as also to as continuity. appoints to Chair only temporary,

we have team underway. of and have seasoned strategic we committed remain who senior a to highly advance the talented leaders to together Importantly, working initiative

sequential comparable the first to improvement saw quarter. quarter, second same-store Looking sales back a the compared we meaningful performance our in on

indicators, including traveled to continues to industry in top leading and industry tire our unit moment. sales, that the track I'll on line We vehicle a which see performance comment miles line are with encouraged retail in

current than that flow. maximum the store match hours quarter ongoing in providers. the our to second our We sales X first, year, this in opening our through comparable the last areas: the XX% environment. the for delivered with operation by store uncertainties demand hours on persist year hours service per continued business we cash levels our committed and challenges with execution hour period. In quarter, managing being reduced aftermarket the to prior environment, compared operating With have stores remained line in operation, and operate other managing of approximately our we profit we and key staffing Given of lower to improved to rightsized same actively business

of at has the operating to operation evolving we hours and performance. profit where demand, we continue quarter, trends. against strategically cash instrumental our and improved, Actively our been demand assess hours store locations hours match flow and added demand adjust to in managing During

actively business levels at by our our stores. have rightsized staffing We managing also

the stores enter of levels we the new reduced early in We the the XXX higher second days demand Since back right During winter months. our added volume staffing staffing the of has teammates, primarily technicians. we pandemic, of quarter, base strategically have approximately have beginning added and improved. stores as the as significantly level across the we believe staffing our we have

variable margin in key service area and tires execution drive to categories: strategic improvement ability has our of second X labor. been The

gross management prior of per During the the quarter, tire rollout with over profit ongoing second year category XX% the tire period by we our tool. versus expanded our

improved productivity seeing margin on labor tool. tires Monro.Forward our demonstrates and that by the significant and our service have our we we are investments. We efforts XX%, technology in labor achieved optimization category, variable scheduling returns over also cloud-based improvements labor store with staffing The our

cost $X area third has of quarter overhead general These and management of in in store marketing from efficiency improvement staffing, reductions key the targeted cost reductions. the cost The execution million our resulted been approximately business. of reductions totaled our and the our second optimization

resulted quarter profitability profit higher even more performance. fixed have we dollar second key for these strong to progress of flow in demand cash believe improve, profit us our every continues variable improvement as the sales. and ability to levels drive in Our rightsize We of areas and drive in earning our will business, margins made reduce costs

our financial strong. remains position Importantly,

robust fiscal half to the future fiscal our Our well to that XXXX compared the half cash first provides XXXX. in fuel flexibility flow, in second deliver of the and year to believe with we operating cash positioned financial of strong up period, flow prior we are XX% us the operating growth,

down remains to pay of and also initiatives our more Our and our dollar continued of generate execution invest per attractive debt every the continuing goal dividend. in Monro.Forward opportunities while to paying to profit order sales acquisition

that stronger progress confident made us to also are position. current we the We in a allow initiatives on will the environment competitive from continued have our Monro.Forward emerge

We our rebrand we see are reimage continues intact. encouraged initiative are to to this M&A our and would store to about resumed have pleased with stores XX traction. and quarter, that I second remains commitment And reiterate initiative that transformed to lastly, gain the to during like

by definitive in This evidenced acquire agreement today's a to million announcement approximately sales. stores annualized California. As to of XX add $XX expected acquisition in is Southern

attractive the and critical acquisition we said past, strategy, we've driver on continue growth our in capitalize to opportunities. will a of is M&A As

quality we well and Our we industry targets. to on is further believe continue fragmented. positioned for consolidation, And are extremely pipeline execute our to ripe of robust

the in of current in Slide Moving decrease I performance provide over an would in by the comparable sales we're store to second encouraged quarter and a significant our are improvement seeing. the in overview XX% like to sales decline trends markets that Overall, the in second XX% X. quarter. led on gradual improvement traffic to we our an first the quarter,

also quarter a to stores with We number the the in significantly compared quarter. comps first saw of higher positive second

an in October same-store September. with down August, This we July store saw approximately sales XX%. Following improvement comparable in has relatively in consistent sales and trends tempered

as As traveled you to majority Slide driven. are miles which oil reliant all all on miles our categories, vast see those clear comprise correlation our very the brakes, changes, vehicle of on sales X, can is

in and are traveled. U.S. unit retail with during performance we outperformed travel, That and that into both vehicle unit the late sales miles retail this consistent line period. was unit September encouraged sales tire tire industry top sales said, lower U.S. October lower our tire industry sales Our

tires all have Geographically, our quarter quarter second management the all our in rollout service midwestern gain tire where and of categories, concentration and improved other traction. this we as category our of outperforming again outperformed sequentially to categories markets with Our southern comps continues and product markets stores. a system pricing northern higher

And excellence on ongoing thank over to with our customers, returning will additional the more driving teammates of moment to outstanding a Rob Rajkowski, Before environment. despite efforts safety, and provide Rob. to to for the would initiatives, color take their challenges in our operational Monro.Forward like incredible I commitment the turn our that, over call I'll the servicing to it who

Robert Rajkowski

Thank you. Good morning, everyone.

almost been I've years in Monro franchisees Operating franchise operational Chief for models. and here After over As corporate, of business automotive Officer a and spending in at XX introduction, number industry a roles an or across marketing the year.

so We on growth pleased at aspects control. remain the I'm Monroe, with the significant path have and within have We we business established clear our far. a for of progress made focused our

improve to is three, the focused customers, enhance leveraging number with optimize one, number engagement marketing strategies; pillars: the X-key level our our of reminder, number on customer a strategy data-driven with experience; As teammate our in-store Monro.Forward our two, our resumed have and number Starting store and four, program. offerings, product pleased accelerate surface our strategic reimage and and and we're largest online; in-store initiative, productivity rebrand engagement.

This quarter, During tire stores rebranding The higher number the service date, the rebranding a our increase stores of sacrificing objective stores markets, to we of and To of the XX banner tire awareness transformation including to substantially for a stores. we key approximately our approximately included completed have brands. XX drive transformation branded tire-oriented service consolidating completed XXX XX and tires to banners. without to select rebranding tire-oriented initiative of revenues. in remainder sales is related the second the of store

our traffic to on of Importantly, portfolio reimage XXX stores track to our stores. this brand reinforce store quarter the above These again non-rebranded in XXX we stores with comparable and encouraging results benefits trends as transform strategy outperformed fiscal retail in rebranded significantly our consolidation XXXX. confidence our are

date. has execution. on to Moving X tires, the into our digital consumer The mentioned results translated pleased our and actions, at like performance initiatives, This to of stores, due our better ranking to the we to of approximately increase able marketing pandemic, online before, in results. are higher and significant efforts ROI optimization customer-centric online SEO shift channels the capitalize towards the product customer with to for has key engagement of as a are led accelerated search our sophisticated approach XX% consistent to our in more on we the top we onset strategic we of categories, which

offerings. Turning to service optimization our the of product and

for destination the point. a by We rollout tires at driving complete one of number tool the store the system pricing of be row. to tires every XXXX. new new in for of is track in the to and end goal tire Our our second quarter across remain relative strained is base fiscal third on quarter price management category sophisticated the This our

better well as drive optimize able the We assortment, adjustments allows at are our make track real-time demand in drive and which market price level our to tire expansion to as us price to category. margin dynamically largest to trends volume

our to of support Lastly, staffing trends. an is been demand improving forward critical in manage to staffing the and our model efficiently effectively and important technology-based implementation store has step stores

match right we Our mix of the that ensure in have number each demand right goal the store. to as is as technicians of skills to well

gross are again quarter. As we a positively store impacted labor margin result, increased efficiency, which this driving

we our increased train and teammates. to As platform staffing new our stores, to Monro we leveraging our University back onboard have are

strategy subsides. Overall, we've us the quarter. and beginning on enhance our and as fully of expect emerge we since in the will taken even believe our new improve the rollout and when teammates important efficiency the our scheduling steps We are marketplace the Monro.Forward software our our labor complete store boarded, store third we continue staffing pandemic of competitiveness pandemics across the help in to stronger cloud-based to base and the

and the like teammates our performance. way efforts they I'd to for Brian, call along driving Before recognize who transformation over acquisition their personally call outstanding that, With the passing the our journey. additional and to recent Brian, on detail been instrumental customer will service our turn to over I'll provide financial in have as

Brian D'Ambrosia

Thank you, and everyone. Rob, morning, good

mix service. This this to like to in stores Slide definitive growing million on detail Southern to attractive agreement These I'd expected $XX California. acquire in to X. XX% solidifies sales our region. provide and our tires add XX sales Turning a further of XX% approximately more annualized locations in acquisition representing are presence

Additionally, diluted is fiscal to per third share XXXX acquisition to XXXX. this and expected slightly earnings close of quarter in fiscal be the in dilutive

NDAs opportunities in are ranging acquisition have to of XX our well including which execute pillar robust to from signed XX M&A, positioned over our we X accretive We We is to a a on pipeline strategy. our believe opportunities, stores. with growth continue

like X. Moving I'd of our performance. overview Slide to provide on more to second a quarter detailed

Given ongoing driving remained that uncertainties on margin and categories environment, targeted variable key operations, the focused improvement the challenges we solar in our have persist in cost reductions. operating rightsizing and executing our

top as the by offset million, saw by strengthening from Our sales to second results closed hours in to In from clearly line and demand decrease an levels, million. demand by approximately stores we the to year-over-year stores Sequentially, million by XX.X% performance year quarter a fell we at from partially increased were focus. period. prior driven decline compared This strategic including in lower continue new same-store reflect reduced $X.X quarter, million, second XX% Sales traffic of $X.X the recent this our operating primarily acquisitions. in trends. store quarter approximately response down encouraged first was XX% $X.X operate we sales. $XXX.X Sales to from

The the year. margin variable to gross optimization points sales store benefits compared of tires These by second line XXXX of These year tire a prior tool. fiscal from days, in prior XX basis staffing our with Within lower the labor margin, XX.X% quarter second had tire in technician of of the period. the category. margin the and decreased from gross mix a year improvements benefited from as margin rollout percentage resulted selling category Gross costs period. quarter management sales ongoing in were margins and higher in offset the higher to of the XX.X% XXX previous

to through cost sales in store sales a expenses to costs, for percentage sales these costs expenses period. sales $X.X realignment cost As decrease a fixed from saw largely of stores and the fixed reductions, benefits are or management of for are reminder, channels were caused of marketing or as store our with a year-over-year decreased increase our margin the rightsizing period. operating which occupancy XX.X% digital from also of to year the in of previous comparable and sales We million net our outpaced the expenses prior gross primarily compared and staffing. year XX targeted included the reduce The $XX.X ROI year in of This concessions XX.X% distribution landlords, lower quarter higher however, to as our fixed $XX.X towards the nature. decrease We also million our these fixed able from our compared period. reductions. cost to cost largely prior drove reflects reduction compared lower Operating of efforts rent including

to of reductions However, and increase fixed sales as comparable cost percentage these expenses compared period. a outpaced sales drove operating previous our the in slight lower store a year

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

sales, is prior of The period. in fixed the as year percentage the fixed operating sales year to XX.X% to X.X% store operating primarily compared cost comparable increase cost causing a to decrease period. to the due percentage previously reductions, previous income outpacing lower a sales, compared As margin discussed of was in

is debt this in average the weighted $X once the million to revolving lower second The XXXX. the against facility quarter back approximately debt outstanding credit an to is $XXX first of than outstanding end during paid fixed period the the are second in the the $XXX pandemic. due to the remaining quarter debt million in fiscal XXXX recovers. borrowings second average renegotiations. in connection an Bank The partially compared increase lower debt increase flexibility the at to operating weighted interest increased outstanding quarter. The demand for expense addition million average financial $X.X decreased to temporary, The Net These to for expansion our end the is Importantly, of quarter, prior expect COVID-XX million increase XXX to by in leases. lower second same last as to during well compared lease fiscal second in the greenfield and interest quarter related increased due generate million weighted we margin down debt acquisitions lease our cost $XX rates by finance year. to rate points basis year for borrowing approximately recorded expansion as year-over-year, structure as with approximately the under as period. associated new with at primarily company provide increase and in the $XXX million paid quarter

effective share quarter Diluted was $X.XX same second XX.X% rate for costs. was second management quarter which to Adjusted in period Monro.Forward the the $XX.X the per diluted share second of related the income period. to for second earnings second in of adjusted and share earnings $X.XX, Monro.Forward in prior to was of $X.XX XXXX. XXXX, share diluted compared Our for approximately diligence earnings the share fiscal related the last fiscal a initiatives $XX.X per year tax XX.X% share the of costs. measure, million the per per per fiscal which to compared for per of earnings year. million transition initiatives second quarter, was diluted for Net due non-GAAP acquisition compared excluded $X.XX to $X.XX quarter compares quarter and integration $X.XX XXXX This and quarter excluded to

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

of fiber earnings and which Tropical per -- fiscal second store in same resulted same the performance on Laura share complete sales temporarily X, quarter sustained -- of and in X quarter, second our X. presented Isaias XX.X% added compared in The as decrease same with year, we of A Northeast. earnings $X.XX Storm closed per the last bridge store Hurricane the XXXX Louisiana result the decline. as a during comparable During stores with close share corresponding damage all in period company-operated with Slide a

which noted, comparable offsetting loss. decrease our $X.XX to due sales the cost roughly in the of included of stores. As expenses, our our of in adjusted reductions, benefit share reduction we store year-over-year comparable quarter. the store earnings earnings our share a translates Partially our in of was and per impact stores second previously every expenses recruiting us $X.XX in the positive sales X% Also decline higher lower to per number non-comp reconciles to

As approximately previously excludes Monro.Forward share initiatives $X.XX per noted, to management related transition costs. this and

Turning to Slide XX.

remains Our position strategy. have strong, and growth our execute we flexibility to financial

million $XX same support primarily the our As dividends in generated bank capital million, bank debt-to-EBITDA operating the drive year. debt million approximately continue net flow stores second for believe approximately fiscal and well-positioned paying $XX a debt half $XX had as operating the ratio second principal of $XX we million half for working investments we our and million XXXX. million in result At We actions We of able approximately the $XXX X a and cash of of business during first and compared technology the in well quarter, first last bank financing fiscal capital leases. expenditures, XXXX. to end flow cash reduce approximately fiscal profitability our that X.Xx. by cash in in we as were months are $XX position, of to to of improved to period of net of paid generate net to during the to invested We strong our in bolster our shareholders $XXX to XXXX million

our approximately cash As equivalents in credit of million XXXX, availability million. approximately of we facility on revolving had of $XXX XX, $XX and October cash

with for XXXX. in Moving to cases time. of The on and to the impact we our pandemic assumptions on difficult and have XXXX significant evolve are situation some financial not assumptions in to assist the XX, regions financial On Therefore, operations, provided months. accurately the our future continues a to of our fiscal it uncertainty with COVID-XX modeling. this we guidance upcoming your at forecast providing remains the in resurgence amount updated Slide fiscal

solid $XX making progress assuming range and million initiatives rebranding the to are stores. XXX of our We $XX and on reimaging million, to approximately XXX capital approximately expect expenditure transformation now of a

costs continue will we expect to our addition, supply relatively and chain In remain stable to and global leverage diverse year-over-year. tire oil and

cost on the savings approximately realized cost expected reductions. in quarter. top $X to our We in quarter during on million $XX the additional the of achieved Moving second million first

fiscal savings savings portion to the additional we during half expect drive cost For we second the business the to fiscal line of in growth. we Overall, in savings. of of year, achieve lower cost remainder expect $XX million a $X these our million to year as top reinvest the

we to announced our $X.X benefit fiscal As million also XXXX. by income reminder, operating closures a approximately expect in previously store

beyond million that, to some XXXX, about million Mellor store from to $X addition in fiscal we million structural it for anticipate savings I closing And $XX Rob remarks. will in annual closures. $XX turn Looking benefits cost to annual with in back

Robert Mellor

Brian. you, Thank

to stores deliver and execute demand initiative long-term our value continue have of acquisition capitalize improving on our while progress financial to in flexibility most strategy growth and shareholders. XX we to positioned store flow our We well the trends to making for Overall, important cash remain Southern initiatives, generate and business rebrand of reimage our including California. improve our significant the on and some profitability solid

is to well, and our Now process before like candidates. assessing provide and update search. the both I'd Q&A, external over progressing CEO turning The is the to internal call on a Board brief

Our who from priority build can we've Monro.Forward to our upon momentum strategy. leader is that to the find seen the continue right

CEO be equipped next towards tests. lead to path growth, have number we team and believe our of will well initiatives that on join the with sustainable We to are underway a transformational and critical driving long-term our

values well Chief to strategic teammates, maintain our our operator we like initiatives our culture, are as opportunity new conscious part And environmentally responsibility highlight relationships an will have core which our efforts, socially diverse this and know integral have over turn success our Monro for as strives operate. to role I'll in that, in communities base to corporate which forward. strengthening our with recently employee social now of going planning. the and which we I'd and an call is questions. corporate our customer to important we take our As ongoing organization. across onboarded an the With among be our

Operator

Instructions]. [Operator

Our Brian with first question comes from Nagel Oppenheimer.

Brian Nagel

you So I've got questions just for near-term a And to with I nature environment I mentioned, what fluid, and from clearly, as of the -- regard we've there play you a then are couple the of to mean, for explain Is is number sales. factors depth, extraordinarily apologize And seen -- elsewhere. month second to of XX% of positive. questions. the question, virus be any there at larger a comping call seems moderation your or other But as What number the still quarter, way stores, the trends the is about, markets? stores the sales in more October so. in or were company But those now the related? down are Or as or that explains quarter? the between of COVID that variability? comps talked total within a in largely

Brian D'Ambrosia

and Yes, add color. Rob Brian. Rajkowski I'll start, any to let I'll

remarks, you September oil, we in key it as top only line side categories much saw those moderation indicator. strengthening are And October, look as the been unit with that moderation vehicle of as at to traveled very our happy in with said think September clearly the and if we retail, against October, for we What that outperformance to vehicle our late well. at sensitive if on fell as encouraged we the we me out prepared are being our other also it off tires that, a correspondence as sales. miles those retail And improving, saw key and against highly miles you U.S. performance, category as our know, performance you category about vehicle see do that between a as the early the but tire and by, during you and of is in correlation to tool new the the not good X that being category what tires, miles can service miles we've And very did line period. correlated correlation of traveled, and job just sales I to traveled. We well our is company as that we Slide traveled. saw to really vehicle I utilizing we look in materials, see as business brakes outsized think in has management as targeted more really those it a our typically the with tire our into --

Robert Rajkowski

Yes.

the we comp So pandemic step the I I our take the rest the around number Northeast seen due growth stores, Brian, stores comp tire country throughout to and focused number we're formats. And point increased. of improvement to has of of in such, outsized the outpacing of has with as nature a think seeing, if And in an and back, we've think sequential it stores coming been demand comp our the call our I'll percentage format. of the comp as from tire stores the really the

Operator

question Capital Lamers next from Jonathan comes with Markets. BMO Our

Jonathan Lamers

CEO the what Mellor Can which us appropriate for you Robert firm was hired of search length you search. for search? and the maybe consider would tell on Question time

Robert Mellor

past. I Stuart think recognize the that's actively time. worked you We're a firm is with the in the are of present and and And they've forward, in the Monroe obviously moving Spencer fair the we with question. at process candidates our interviewing leading along Board. search

search I in we're and a think, know, complex you engaged it's pursued. And fully And so being actively as it. firm, it's

As on obviously, familiar that, has key the to it's that, timeline that you're with. qualities individual think that a I we get right the

but And have actively, to in we to Rush judgment, future, not pursuing place. say? so near should and the I that candidate we're the we in rush it what hope -- are we'll

Jonathan Lamers

projects? the on dynamic of where Okay. Brian, the new were side. you're the and how And in from implementations much the be and can you improvement systems, IT staff on more a new the system quarter? And those you there scheduling the give system for sense for expand maybe X for modeling ROI Rob might room or us pricing Brian, the Can for tire out

Brian D'Ambrosia

Jonathan. absolutely, Yes,

we terms our we're look sit you store staffing -- will related far, the of still by benefit completely rolled the -- out rolled model, as be remaining If out stores have there. rolled end QX where over the ramping today. we X,XXX just out still at the so so is in of to The

stores stores think continue in than that through I and We're the model. would drive think efficiency more financial move benefit QX, to you expect of that you'll continuous we the QX we off now there we something improvement this performance see gives tool I will see our in that that. ability QX saw more additional in more our us be seeing benefit as do and obviously to that. labor any our staffing and the to roll of And out, time more program. And obviously, on with drive saw we in I always new And ramp model. would to

for manage in the direction either I well obviously, ahead, we that But a in demand to gives hoping and COVID forward. We it up, think best, to uncertainty know Importantly, really we're down us place pandemic. positions terms the right? really be demand control us in able much to tighter as react of move or going there's to this

macro as much tool management again, it's regardless also key out continued roll do us the gives category I and as second better going where stores control important from a trend of will category to of similar that really commentary out us and the be is over be also end to obviously XXX sit to they more demand QX. is The the environment. that very those we by of expect a benefits tire out fully think, rolled one rolled has And today, than we

Jonathan Lamers

Brian, question acquisitions. And the a on

does distribution? you in For margins on thinking where East existing groups and stores compared signed to Coast I'm you operations QX have acquired long where for the XX the run own the your the NDAs, how operations? those the about Monro's

Brian D'Ambrosia

add to us on That's encouragement West to to those invested and that out are great obviously question. stores We the platform did a great through stores additional there very in performing Tire a Coast. Certified a with that. have well and we continue acquisition out great give And

we warehouse stores. and So add of initial is I primary will to with acquisition as entire across the out already points think owned on sorry, to part goods do California really continue the Related distribution investment out to to along maintain with out of the Coast. there really I'm secondary we distribution, leverage the acquisition, profile a supply of us, out made storefronts and West of we consistent drive a we profitability add West, the there Certified and west our manufacturers continue with scale, pretty our have -- we good really sold benefit that's will through that acquired partnerships allowed group out there as cost certified

the performance expect as we in of out pro really think stores are now performing So same there, the will encouraged I these XX expected by we we're acquiring. and formas, our that

Jonathan Lamers

could Brian, And in us comps QX monthly to you the QX and break just for date? out the

Brian D'Ambrosia

down XX% September, we We and Yes. said in were October. X% we're July, XX% for fiscal XX% August, in in down

Operator

from Jordan Bret Our comes with question Jefferies. next

Bret Jordan

out Could spread I average? sort could us of I you give or guess, of a then, Coast. are getting you relative the for you a us give the stores called sort difference. North And how the South maybe Coast Western to think did region the ballpark presence, the bigger West since how we company many relative being the points basis stronger to East the

Robert Mellor

Certainly. Yes.

I So bit maybe narrowed than think the kind pretty of the points South in Northeast. they but That's better a pretty consistent, said basis last second the and consistent. call, Midwest, little were performing quarter, been about the we XXX

it's we comparable don't of the frame in earlier growth But acquired store of year-over-year. a as in pro sales my business with it them. have of in we comments, talk because the more when forma Coast, a base said like far expectations that I just difficult reference to little West performing to line As our

Bret Jordan

I called tire tire to for more then Is how And about is inclined the really come higher-margin describe it adjusting I prices that cut could the or to basis customer the of I a guess, to either guess understand that what a your mean Okay. volume and system margin comparable product? you when pricing prices. I for a to it. that as system in improvement? more Or that looking maybe be driving a would margin is identify on up expect tires, would it tires you was drives they like-for-like pricing generates a offer the you gross out result in

Brian D'Ambrosia

-- what looks or Currently, day, makes end will And the the and versus in we allows able we make across can have seeing of on margins. price and look do portfolio, can at in volume All need really tool then volume the believe the the sure our velocity past real-time And market. optimize us adjust to -- what we're the decisions our increasing in the tool It competitive but those pricing we to skewed at we the elasticity mix. margin. for which and we tool compares that to competitive line, real at the to and versus it be entire decisions been the will margin the we're that changes the make towards to the time. in haven't do the

Robert Mellor

U.S. think, expansions I that, unit in to you as what the percentages absolute add to tire strength saw our sales. for And And just retail on tire our presented within margin saw compared Bret, our in we relative industry you importantly, category. volume to

benchmark at margin it's our margin So given same tool going I by tire I doing the performance well depend is But whether tire, kind a opportunity. a both against our it's the And expansion. more think accomplishing of to the of there's as time, volume or both. as think

Bret Jordan

How on of what's your of market competitors feel underlying share? you to guess M&A, that a you market I doing see the you've take your via Okay. commented numbers quarters? on relative in couple lot last theme, do past the are these in as you

Robert Mellor

our kind see tire X in sales, related Yes. of there is that over we competitive view where well XX or our Great the the in we're our with we information miles what consistent XX so you positioning. consistent really that -- NDAs and X the information industry that vehicle at on on The model, Slide it's view us lines confidence the NDAs as we which least, I our franchisees seeing gives the representative what tire prepared feel to side, And is industry are of U.S. see maintaining at I what trend the that we industry. And traveled of presented at, question. our is think is Car think unit looking with above as the on prepared remarks. at that we signed from have that our we're

Operator

from Stephens. Nelson with comes question next Our Rick

Nels Nelson

growth, to looks companies, differential? had we to you're a we've of on their comments number if those we same-store I And or is franchise out Monro September Just behind well quarter. market numbers, think repair of Do particularly like why? follow-up their about parts -- we share from if franchise you share. tracking segment, Curious, exclude kind tires of so, a compared severance your report to dealers could dealers losing guess numbers. you collision to pulled speak got if that

Robert Mellor

for Thanks the Rick. question, Yes.

explaining job you I if business in that of there think good you of our think a and the I parts parts. -- kind did tires at look two

the I've as mid-Atlantic. to geographic hear plains. numbers mountain And geography. lot And difference through have large Northeast of in public down obviously, disproportionate we available of Plains coming to have. nearly listened, and is same Mountain other regions what a and and that and exposure you lot lot in us to Mid-Atlantic the of obviously, and And the the I is and themes calls the strength think the comes a a I no really, Northeast and to pressure in exposure a other

of vehicle And of between the is view consolidated we underperforming with other as we of if traveled well of that, my sales tire trends data that that's with show as differentiation in better mid-Atlantic driving as looking there's think of a I disparity So country. large amount there's a line sense tracking a averages. geography, consistent that miles geographies. that. and to It's unit at by But the portion Northeast between see, lot presented the kind national parts in large you in against we're the much look

geographic good feel to relative our performance exposure we our So and there.

Nels Nelson

their with you're you. How that do protections Got taking COVID Okay. get customers vehicles? you comfortable

Robert Mellor

Yes.

very We in still have think from shields, taken as place have as the the well cleaning, stores. measures today. onset, around shields, distancing face social -- that sanitizing, within are I measures masks we Stringent stringent

bring a their do continue we consumers, communicate into communicate not reassuring to with We them and And that it absolutely safe to that. vehicle that well those or those that obviously and think #X measures pandemic to continue It's measures I to execute twist. in is understand those if teammates, conduct concern us takes And we've a only digitally us. but continues and our teammates. that taken to business recommunicate helps to environment guests We're and continues be or that. the and also prepared different to been the

Nels Nelson

question for a in is the were part -- ideas a finally, -- you for e place to the all the reimaging, CEO, you or new carry strategies existing and going in rebranding, being new in particularly the that expect is of tires do looking commerce, Mellor. And with you Rob The individual that perhaps on see are business, is do future?

Robert Mellor

X the we're really years, place think going been It's X it's put not we I been in from We're well. diverge successful. for to years, strategy on Sure. very and it that place. executing Obviously, in

So into you not change we're if mode, a will.

same I have leadership And we're of saying So course, persons qualifications is think the path. well the of to and place. goes going part integrity that in working continue and we on without teammates with

teammate only the I greatly or the As certainly, think years, sales the we also closely been forward last the period. e-commerce, company business. the that and COVID-XX side but this we've in I technology, not employee X we pushed from from a and from sizing side, think our or And the on follow on you benefited during X

a to I I I well going say, was place, conceived, and to divert think you seen from it And company, don't That's place on. that's should with -- on you know, followed you behind mean, not good we've not going very, and I in foundation We're it's pushed proud I and that think strategy good what about think that, if back. just company, the the we're see I I on by not e-commerce. continue with the we're feel -- say, just think we've I'm should throughout path. that what I that. and forward it. any, very retreat adopted you've going certainly from going And strategies we've put So will, And in and behind teammates e-commerce, the place. we're in as well that. got CapEx forward that

going the forward and straight path and see right. to So I up the

Operator

Research. question next from Our Wolfe Bellinger with David comes

David Bellinger

decline comp the there down you're among QX trends, recognizing indications what seeing of meaningful sales or on first in of in trade customer base? ticket your terms changes driven. So I'm was any traffic mostly curious

Robert Mellor

driven Yes, over great by really, largely improved traffic. consistent No, sequentially ticket QX, in performance was saw the QX, question. We quarter-over-quarter.

David Bellinger

it. then Got the And just up trends. following regional on

across those markets stabilization the and the versus markets Northeast beginning underperforming to parts any early indications there? of country? Or Some the what Are of seeing maybe now some you've of of of those in signs seen curve Atlantic. play like out the same you recovery type other

Robert Mellor

unit the were in When with then step tire retail in tire October they performance. looks units we in And they Very as take late it consistent part like -- at and tire the well. the a that decline geography look in stayed the back has has in with September, dropping, line with recovering. QX, the reflected and markets, that

Operator

Our comes Benjamin from with question Truist. Stephanie next

Stephanie Benjamin

in little sales called kind on store a the from I labor guys I or some first just wanted closures commentary quarter and line of out in July, same-store headwinds bit. the discuss you to top believe shortages. some

kind you your comp on that second anything quarter this to down you navigated similar as So that know wanted weighed in to if growth? environment saw the of

Robert Mellor

Yes, add staffing great demand did as increase to technicians we respond improving to new teammates, did And which, about we some quarter. in need about, XXX the primarily we trends, talk second to the talked question.

adds there left will, that the during if saw we wasn't on against that at demand regarding I the was anything there table understaffing think as good demand. kind triangulate against those significant, levels the support We the And we that you feel look was to of quarter. demand staffing there. and the it

and snow. where we So really head as -- staffed good what of we're be and about we we as some hope to most weather feel some now, colder into importantly, right

Stephanie Benjamin

little by think, of tool Perfect. be XQ. to the end tool to fully a the staffing launched, wanted tire store both you said, the I the And and bit, then as discuss with I

we the include what big for quarter? be should the curious, is the to you get Just for? be we going to a next Is there what's be out looking another that the investment big that across opportunity should pricing initiative story level, tool to third leg watching we through big or an service out or as

Robert Mellor

and relevant to know foundation our with both primarily, has consumers Technology reimage capital mean, to traffic I our making stores be do we banner. more continue ourselves brand on And experience rebrand and oriented certainly, our which with a stores. will a and big driving most our customers large Yes. importantly, dependent and obviously, focus, more and that our really is tire from resources portion a and Monro.Forward guest built. our the standards. been incremental the standpoint of is improving to reimage But to

remain and as will So focus that our we exit. really

including Monro and to improve platform that to launched, we drive as do I already there'll earlier, improvement to well continuous University to what how our be we think really our continue we've as business productivity as talked ability our around continue teammate improve overall.

have the being into as outside move does big some I So we it tires will the of through year. done I work also think are areas. come Rob, those know, that focus category

Operator

time, would like to to turn this comments. the At closing Mr. for call Mellor over I back

Robert Mellor

environment. for joining job interest Monro. your all they're means say sure for do know, let and I you know But I know, support want we its is to and very thank terrific doing support difficult your I'm Monro, of teammates. that of you mean, and us continued all and you I what a you, today When Thank of a in

again. also, healthy safe, our stay to Take in is an forward forward progress all look on have providing So speaking And quarter. great day much a we your of appreciated. tuning we support you look and with to next and very we And hope and you update you with today and stay care.

Operator

teleconference. concludes This today's

thank your for your at You and lines this may time, participation. disconnect you

Monro (MNRO) 29 Oct 202021 Q2 Earnings call transcript