MNRO - Earnings call transcript Q4 2021

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Operator

Good morning, ladies and gentlemen and welcome to Monro, Inc.’s Earnings Conference Call for the Fourth Quarter and Full Year Fiscal 2021. [Operator Instructions] 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. Maureen Mulholland, Executive Vice President and Chief Legal Officer at Monro. Please go ahead.

Maureen Mulholland

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

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

President Financial joining Executive and will today. in of Mike Mellor, presentation are Board our Reconciliations Chief to and measures. not supplement and included Additionally, earnings on Officer; substitute of Broderick, Robert GAAP supplemental today’s financial comparable part Chief Monro’s call, us management’s the statements comparable GAAP Officer today’s D’Ambrosia, measures include intended release. non-GAAP measures, to a Chairman; discussion information Brian of which certain are be as for and to be such

would Rob Rob? to For be will the to also to portion With the Officer, Operating Rajkowski, of over Rob call, available the Mellor. take that, like Chief questions. turn I our question-and-answer call

Robert Mellor

to April. beginning pleased spent career to announce Broderick, I industry and the everyone. having this Mike in and Maureen knows morning good formally Thank our automotive of welcome new Mike Today, entire am the at aftermarket. you, CEO Monro his well President and join

Over that business to leverage to excited time in work also greater great sustainable experience Mike we want for leadership has more position acknowledge led decades, senior served extensive the his CEO. throughout partnership our profitable background execution and as strategies the growth. transformation incredible two the Monro I to could development team has my not of have organizations for interim the growth and past he led and be to their and

year, challenging a During our made leadership significant team. collaboration possible to the entire strong were accomplishments the of

over as call a to in forward, will the Going smooth I’d forward and like to look that, Chairman to Mike. continue I turn to transition. the Board serve with And assisting of

Mike Broderick

It’s morning you, CEO. Thank Monro’s to honor as an call my be and good Rob here earnings on everyone. first

Let learned by joined the me reasons the have what over and why past weeks. start highlighting Monro of few I some I

together. of potential the senior our of of next ambition to experienced and depth full an exceptionally be impressed our a phase in remarkable Monro to and organization fortunate have I feel leading is platform, by national coast-to-coast I an aging weeks across a advantage scalable to auto to team. a recognized the We surrounded talent commitment fleet. with by and I thoroughly the take Over and of been take Since Monro of the business vehicle with entire grow years, chain to have realize also With Monro’s share ago, presence positioned its journey teammates. watched provider. continue service joining brands admiration and uniquely leadership the growth an becoming Monro X strong

our for position, this our over Western same fiscal while accelerate our the remarkable team their bolster time Slide was to our has transformation presence to I the and opportunities journey year. attractive X, in certainly on including several an and the has in will able Monro the company’s Monro expanding past take the initiatives, At in coming technology instrumental accomplishments be financial Monro region. year, beyond. was team believe I to progress great its capitalized also to unprecedented dynamic thank work and but entire transformation want XXXX Turning year made in the tools. time, to to these success foundational It of the implementation

I truly improve. engaging the is and support markets our The transformation life With exciting. of we Their for Monro’s and understanding bring been been can continuity stores every for of spent My lot the in different past full few a initiatives Monro.Forward have Board growth our ways ensuring invaluable teammate. visiting in executed and our to store, goal with every committed of to strategy. of of are every weeks the have to the time am guest, I being Monro.Forward further some Directors, has in in feedback teammates and how field. initiatives

strong be profitable key as would perspectives to on customers, the initial quarters, to in-store and flow. execution. and share teammates growth operational X. will that on done key drive on continued like has more I highlighted but cash see focus a some renewed focus I will provide on work a Slide execution coming in commitment my the value been go-forward to through opportunity our have and priorities, Our grounded plan creation tremendous already in with for a

in the and growth. teammates comes our best-in-class organic will To First, guest continue ensure for teammates, a service-oriented focused to long-term enhance execution to in-store tools opportunities of our deliver to digital experience of effective all assessment organization we achieve to our want is fully to business and and support our Monro. equip I Monro is experience stores. of my who improve every enhance to opportunities use training the the on customer

continue operational complement will initiatives. our re-image of stores in-store I believe to excellence addition, In the targeted

our take remain will and M&A opportunities pillar to a attractive well-positioned industry of fragmented is forward. key going growth Monro strategy Secondly, advantage our in consolidation of

of and am scale, the values make family Mitchell Our the company to in Monro some California acquisition by our buyers privilege completed meet region. had excited approach and last that recently stores family-owned and month Mountain in Mountain one the I I of of visit demonstrates preferred businesses. View View customer-centric our prospects this

$XXX will record driving remarkable strong cash to pandemic, Thirdly, steadfast cash team, we fiscal million the our remain flows of in on flow. since beginning XXXX. led job of the operating of The

cash about. in Brian our front Looking that, about overview the I ahead, exciting the a I will transformation. as opportunities will inflection is confident fourth operational over to working we of am Monro’s optimizing an of us quarter turn In performance. will Brian? improvements an enhance that implementing have I and provide feel call on who we passionate this enter performance discuss capital we point to continue and outlook. our flow now in summary, our focus to business With

Brian D’Ambrosia

echoing Thank to the and entire you, my Mike and for the Monro good exceptional gratitude first morning their hard team everyone. Mike’s I year. past comments start over want expressing by to work

talk Slide and few our to fourth for minutes to positive quarter about the X, solid turning our business. let outlook take performance me a Now,

softness in Sales new X.X% stores including increase improvement by Sales closed from million markets. by strong partially easier in was and stores decrease the some started the sharply in category due that reflects million, store Mid-Atlantic performance of strength X.X% in from related by from same-store year. and comparable in up quarter. categories $X.X primarily acquisitions. February weather year-over-year $X.X offset year-over-year. winter Continued rebounded Southern in as sales. extreme to in comparisons increased our a by sales key increased Demand strengthening sales COVID-XX million. $XXX.X led our The was fourth March, largest January in tires, This $X.X service quarter lockdowns million comps began to well mid-March to that driven a XX% recent followed with in with last due to as positive This traffic our

were reference, For in comps last year. March XX% down

Our down up to XX%. This fiscal first same comps into XX% the period with in has last continued quarter, our the strong momentum of year quarter-to-date. exiting compares comps year

have to pre-COVID sales are We line store in levels encouraged comparable performance. with

Slide X% impacted quarter. was the margin tire, of sales percentage tire decreased and to gross per during profit margin in to margin fourth benefits XX.X% a tool. in gross management our positively impacted points gross year-over-year Turning a pricing productivity by the XX X, the labor increase reflecting by category positively basis also by as gross increased was Variable of driven labor Variable costs technician quarter. lower

prior a compared of positive percentage occupancy addition, the with from leverage to as more sales sales. a distribution of higher categories. These higher In sales we by year than mix offset overall trends gained decreased were costs tires service as and

year. per Monro.Forward was $X.XX adjusted per share This transition net reserves, $X.XX related expansion. to for related which $X.X in store and diluted $X.XX our as impairment the enabled to related share to a from was last a as to related lower expenses higher store $X.X channels realign in store period. took It generate retail sales efforts to expenses The management from continue stores year-over-year XX well share marketing control. for impairment per our measure, we for earnings center share interest costs $X.XX, to $X.XX operating share to period. million in right-sized diluted operating lower million share comparable income approximately store charge a execute the the $X.XX spend of management period to compared related higher last in increased $X.XX of the the prior of quarter quarter per fixed against structure. to to compared Importantly, rate of $X.X partially average us costs the ROI Higher per year fourth in same weighted the resulted decrease for costs of million per loss $X.XX, prior headquarter litigation year reflects planned quarter, cost also Net a our cost was year. of closure. non-GAAP of margin compared million $X.X decrease we our disciplined Diluted per expense digital per fourth earnings and period the a outstanding. staffing. Net $X.XX share decreased towards fiscal same diluted costs, to which quarter fewer in share the tax was to closures, $X.XX to income initiatives $X.XX $XX.X of interest excluded million per A $X.X share expense fourth and the distribution our and fourth for average quarter an of year debt in share was Income to per million tax loss share Adjusted as per $X.X quarter fourth million excluded compared compares period. related prior to in earnings initiatives, XXXX additional Monro.Forward impairment by offset fourth the benefit

As XXXX cash $XXX operations strategy. operations to highlighted the on flexibility continue record ample X, support million have financial We we compared from our year. in generated of fiscal growth to Slide execute of our $XXX prior to million for and a

are store for financing maintaining million our in to paid leases. We disciplined related and primarily and expenditures, We and re-image invested our and allocation for $XX technology. initiative in million investments to $XX acquisitions $XX capital approach principal capital million ongoing re-brand in

commitment dividend million also are fiscal XXXX. distributed fiscal announced strong first our our fourth At $XX bank X% XXXX debt $XXX increase in net and reduce shareholders by to X.Xx. returning the XXXX. cash through our of to We we to a debt, evidenced of as dividends had quarter, by We cash net We in bank dividend to the the net program today. in able the maintaining bank EBITDA ratio of fiscal million $XX end million debt of quarter were during

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

stores substantially we of stores completed we XXX re-image average. to stores including tire-branded transformation and re-branding XXXX, key approximately a see re-branded have To-date, or outperformance markets, chain stores of re-branding of XXX number completed re-imaging our of to to service in fiscal During and stores. our we XXX the compared approximately the approximately continue

our flow. managing enter As we maximum remain XXXX, to we for business cash committed fiscal

the generation. will operational to expected flow our These margins. expand realized efforts, business staffing we continue store and we resulted general cost also cost reductions. of marketing with In across First, line growth, drive cash combined and overhead to in fiscal efficiency our cost million savings. growth to EBITDA of top from optimization XXXX, and enhancements These are $XX management make related increase the improvement savings

from addition benefit operating store XXXX. in previously closures, million. $XX addition, to structural In by $X.X we income to to million benefit $X continue fiscal savings, $XX compared our in announced In store our cost fiscal to XXXX, all million closures in million expect this

in working will have this opportunities We area. also remain focused we believe additional and on improvement capital

was Moving recently add provide would includes completed This strides an over like of to our acquisition moment in $XX to past View acquisition acquisition in Los April take our update now in a on solidifying Slide XX Western retail great is on region We I and year completed footprint to the and stores the X, and made most the annualized strategy. to in area on sales. & Service. XX, Mountain XXXX million expected the Tire Angeles geographic

attractive We our this Idaho are are pleased first the remain are strategy. particularly Despite focused XXXX. integrating at Strategically with growth this strong quarter the our earnings Mountain of cornerstone growth seamlessly acquisitions a the dynamic our of of stores excited acquisition lockdowns, fiscal and and acquired COVID-XX-related View contribution valuations attractive located in from previously the about in Nevada prospects California, on market year. and we the impact

a We XX robust ranging X to NDAs over currently for have including acquisition XX pipeline, opportunities from stores signed stores.

well consolidation industry. are in to our of the for opportunities take We many positioned advantage

to on our which Turning is makes the it difficult operations. the the pandemic still to our impact accurately future COVID-XX of outlook, ongoing forecast situation fluid,

quarter. we not light into track store are ample are quarter-to-date, quarter formal we double-digit reasons be In While achieve comparable sales sales of momentum the comparable first store guidance, are optimistic. our providing X have in XXXX fiscal growth to and almost we to the on first months

comparison favorable first – the year XX% As year to-date of quarter prior prior a – the down less than June comps a me, than excuse the year than reminder, first first are prior year comps.

In quarter prior year quarter comparison through comps less year quarter than comps. addition, second prior fourth are a first favorable

Despite As of comparable also our the the store reflect of fiscal of we achieved the expect a will quarter to-date. such, favorable impact we the sales an impact gross negative year-over-year, first as to anticipate quarter to mix XX% higher sales expected growth to in performance XXXX. we first sales quarter compared mix moderate of margin that tires first compared

you Lastly, for Slide assist financial XXXX modeling. will with fiscal find X on your some assumptions to

year-over-year. and to We expect oil tire costs increase

some million Regarding back $XX we the amount remarks. refresh Mike? in a expect store to Mike of million range the XXXX, we that, capital $XX of expenditures, activity to And fiscal with call I undertake. on that turn depending for closing will

Mike Broderick

of first very the we is dynamic, that it safety concerns And teammates for Brian. business. our note Thanks, important by of quarter about mind the to customers. robust and COVID-XX environment in our being is and top remain to-date and the our still fiscal optimistic That outlook said are encouraged performance

their miles activities. We reengage and to increases to vehicles normalize consumers as more driven expect in daily mobility start

would flexibility well in the financial trends and growth season, As they remain long-term strengthening already and to are deliver we head to for value have to we ticket customers capitalize to positioned to into we of seeing provide the our operate customers, demand responsibility an road the driving our which more on the to doing corporate environment not now an of take integral do, care and our the we teammates, as view planning like to We component thing but success. to efforts. our shareholders. our part I and responsibility the communities long-term the update as our to execute take higher average strategy indicate summer that on vehicles. invest Overall, our continue only their right in

Officer, be and especially area, that to month. I forward published we our commitment and our part strategy would strong the its senior report overall and our being leadership sharing accomplishments for like the of team As in corporate within of Chief Board and to this responsibility to recognize to of formalize look taking lead efforts vision, support component Mulholland, first next to important in the transparency the taken our this accountability oversight Legal steps Maureen in will business. our

And over the and done. has Monro great I a am on for been I leaders now of that build is ongoing. the will foundation With operator has committed call work to that, the and to strong questions. work turn environmental recognize While with I our stewardship, to the journey social excited senior that

Operator

[Operator first question coming from Instructions] from Capital Lamers BMO is Jonathan today Our Markets.

now is live. line Your

Jonathan Lamers

morning. Good

first First involved you so, with have have the with businesses you. this for Mike is any Monro service – Tire, had or advance with? first compare I for been would opportunity but speak great? to other Broderick, Could Michael you to would familiar be we Canadian be others

Mike Broderick

organization. the on of Sure. be part pleasure and the It’s call to Monro a be to

Just been to have Monro level years. XX calling I for on set, over

and retailers. they Very our business that’s service So, car. is that And car. service the so we on differently this working on the I services about performed. I working business, customer the knowledgeable am the a have the is here say people literally much are extremely also only When job, customer’s than

very our under the of car. essentially chain the of focused brakes, all our and of So, retailers. supply on We categories customer the the the all – we are are categories, batteries, really hood end are around

local of focus satisfy it’s have on and Tire really provider. they service in my actually great most I the a my great calling Canadian say on work, Tires to as at So, that They level And my my talent and experience. the is it’s have But more the and technicians. perform consistent equivalent is would that the business, world. other different we Firestones and or stores – either of their It we as understanding any well war Monro a very customers great perform than the customers local retail with where communities. distribution Canadian

Jonathan Lamers

and that know seem tire you? Thanks. how market acquisitions opportunity for thinking there of the And distribution any you are growth. being and key market about you you opportunities fragmented. Are mentioned forward? going as evaluating focus a that I acquisition huge attractive to is Great. very particularly parts for real And a

Mike Broderick

as – comments, to stated going very opening be I relevant. in That’s is my M&A

of We many We in don’t have stores. have – space Southwest. lot the we are missing out a

So we like focus, have to introduce order be is to opportunity building we stores. in that also going to the the greenfields we viable we will that, I own will. are an if where in to at markets in, fill a fill opportunities, we will opportunities fact can’t the faster Southwest. out, start But that looking And find our to move M&A as start

Jonathan Lamers

for year Maybe questions to the that. hearing since Okay. you stores about of XX the end at Brian, of last quarter. couple Look Are forward stores to down were so, more QX? you into reopen a continuing

Brian D’Ambrosia

really wasn’t re-openings. It Yes. related any closures or to temporary

If we to any did during of in remember, where significantly you with stores the to be pandemic. close of operation, have reopened reduced comparable others not pre-pandemic. were industry. And we the operation hours consistent we those hours We

net of Tire XX-plus really offset stores, underperforming stores quarter. store the portfolio QX as to of last closed XX that evaluation relate the So, we year the last those the by on acquisition closed closing of we some fewer that in in of store part our closures Allen

Jonathan Lamers

Okay.

do to demand level? able be $XX believe $XX levels savings to just the service to million would at clear, be footprint? be OpEx to that you of And of if the So will XXXX returns permanent you the sales sales from fiscal that that same level reduced million

Brian D’Ambrosia

that annual – sorry, the the savings in before that of $X those were Yes. I million we of providing closed XX-plus closed, are stores drag ascribed The the $XX to operating reflected income – the fewer XX stores not million we that stores them. we am those sales

the $XX sales in Certainly, coming those to in in million stores million reduced of going are that was having not our be $XX out of that to that’s is ‘XX And sales by $XX reflective those the is were XXXX in So, stores XXXX there. million of number. FY stores the profit million cost that compared million we when drove The related ‘XX. them. $X to But not really in an having to savings FY $XX is in to incremental operation. those

million it of cost savings in that, XXXX. we Some of $XX said was

case, a $XX be would XXXX year, adding in about for FY to the of this that reduction back net of XX which versus million to $XX are ‘XX. We million XX in base

Jonathan Lamers

next round ability quarter saw have improved much to clear. Thanks. the Is That’s the are any well, ticket actually there of the strong stimulus as inflation is beginning comp traffic Michael would to and quarter? supported you And you – mentioned of strong an seeing the how next checks returning. into comps estimate way at the

Brian D’Ambrosia

stimulus on is isolate difficult. To

consumer supported continues supported there and been well during this. think – the has to a I is well be

miles other traveled. The probably we to continue see that is sustainable improvement vehicle more improvements in

think I to was of particularly improve, CDC in mandates. of related some to continue mask the that recently guidance that released light will

So, roll out. really of especially is vaccination that positive, all as I think continues that to

to spot. So, that’s provide business, supportive sales we vehicle as elevated trend aging at to look car have the will the of we continue for should miles and trend that improve, the seen that nice that vehicle our used our travel backdrop longer-term cohort, in obviously, one sweet is a addition

So think, initiatives we execute and advantage backdrop continue of to own really from to that, that. us our a all for to of lines up well take

Jonathan Lamers

I your comments. Thanks will for pass line. the

Mike Broderick

you. Thank

Operator

next question Oppenheimer. The from coming from Brian Thank you. Nagel is

Your now live. line is

Brian Nagel

morning. good Hi,

Mike, working First you. with off, forward to look

I look on you question First lot maybe bit sales here particularly to the in you stimulus, as the how much way category fiscal spike there demand a of nice demand, there of in question. a pent-up kind out is to any of real was of comparisons, the time? clearly at it tire the in But versus a last fourth with more etcetera. apart saw going quarter, that, follow-up a break have, But

Mike Broderick

While category looking really category, good the performance particular, about tire the tire throughout at pandemic. we in feel Brian, our

of the ability of about the our last driving America. to volumes North industry about calls price, We tire in increased couple capture average increased have talked all it selling margin, ahead while on

tires was I in in some led January So, came X% by by affected that QX March. the think we and in out exited demand good less very January, and the that tires, we was into of as probably saw stimulus plus

tire X% in little my factors. maybe drove it where a external So, I that’s less is pre-pandemic the or affected a month a good see category quarter think mind comp to And pretty levels. versus by at, a good

pre-pandemic it’s proof that stimulus outsized that in business on is So, I improvement supportive the is performance supporting our with we that point is But due returning pre-pandemic. good us are business really that that some in good think service to of extreme outside of levels rate run necessarily for a basis, not Certainly, was influences. a – our to our we still line we this subsided saw April. XX% categories, considerable where we in a feel were leading Also plus quarter-to-date. is

So expect those number, we took categories step that the during back are leading which year would last they given the pandemic.

in the where margin to a We but us not is certainly to all And there. we we are are way categories back from standpoint. help going those were pre-pandemic, that getting

I to think move a that’s on out line. We ‘XX, back to where margins, here. year we tire to FY occurred to were as our better gross that than probably we be the won’t really we of margin will as way were contribute we in will it relates And last business be pandemic. due the start to mix service during start the that of the categories and

Brian Nagel

expect about mid-May, regard there. maybe the you tracking we but of you as commentary type appreciate That’s as more the the fade double regard specify recognizing giving I fiscal question, guidelines could your said mean with we QX, or official just in the helpful. I I with the really are above you And XX%. think as should – guidance here, of then from around – digits that and loose as Follow-up kind digits. was guidance deck, not to what in Can mid-May? color so saw of you think XX%, that XX% of double you to

Mike Broderick

Sure. Yes.

the up year, XX% where us FY running same with look the line at you if we in kind that ‘XX. puts XX% back last roughly of So in against period the down in were

to down And that June against number FY perform you at number would look of expect keep us we if XX, ‘XX. would we were with we in line the that where in so

fade. X-year of us of with comp But the to keeps the means So stack net it starts terms that FY in the ‘XX. in year-over-year dollars line

Brian Nagel

you. it. Got it. Appreciate Thank

Mike Broderick

Brian. Thanks,

Operator

coming you. Thank from The from is question Jordan next Jefferies. Bret

Your live. line is now

Bret Jordan

morning, guys. good Hi,

Robert Mellor

Good morning, Bret.

Mike Broderick

morning, Good Bret.

Bret Jordan

comp? XX. just think could March Did was get we month said believe for the we to started. X But housekeeping have in and January, Hey, I get the you February Brian, I plus give February? you plus

Brian D’Ambrosia

Yes. X%. Yes, February was down

Bret Jordan

And Great. up. greenfield brought on then a question Okay. the you that

or to be I existing a there discount think back percentage value as go used units was if how of a about to of talk buying as we XX lot years, revenues XX you either pickup asset Do or economics in to is see And by these maybe greenfield a ground-up a sort you it attractive. offset more markets? that the build Is expensive different store? of development? traffic can in a new

Mike Broderick

lot Well, we – a for warranty. our convenient be If national morning. want Bret, affordable, would we actually it. We good a have stay activity I fill M&A Hi, I to mean mentioned that’s reasons that we out looking is across customers. of to find then can’t our footprint to the There nation.

we find So at where can’t look would it. M&A, we

we putting be their – return we’re can P&L the see us stores best looking a there of get when stewards do and some financials, going look Now obviously, to the do And of seems be lot the investment. going the be you greenfield. at at open to we’re for where space to for we to Southwest, efficiently

Bret Jordan

Okay, question, any tires. basis been bit just a margin then tire have in or driven like-for-like this you a about by from on there talked mix? And purely movement is great. a impact I the guess, And pricing

Mike Broderick

price sure decrease to through those on for able and really tool. applications real have our that that been most I those levels say price corners optimize we’re – less and because in price are stores would using category sizes that with are are price and optimization shopped in that seen price we and price we that the step-ups we that and optimize sharp – management that mix our the tire to converted ability win are price that sensitive. on make on We’ve to are And to of there increase is right price tool to our has been

So it’s both.

– – think, to, cost as price tire know, continue And some increase they consumer have increases that seen breath price all that We at some the will announced. points. from have price we manufacturers, across the you to

Bret Jordan

And Okay, question, markets? guess, Southern, regional I and big on last Any the performance. then Northeast, Western great. between Mid-Atlantic spreads the

Mike Broderick

It in even bag really quarter. was pretty the a

we April the May, outperform, country. rest had year than Northeast the the easiest to into started lockdown but prior into As quicker they comparison that’s they really because got largely of as to the and

Bret Jordan

guys. Okay, meet Mike. great. a you, Thanks lot, Nice to

Mike Broderick

you. Thank Likewise.

Operator

Thank you.

Nelson from next is Stephens. Rick Our coming question from

Your line is now live.

Rick Nelson

virtually. Thanks and welcome you to meet to Monro, Mike. Nice

sounds here, So like plan? installers? And you’re is strategy if plan. Curious it How tweaks? going online question digital follow that you’re the you move to tire and you mentioned going sales the Monro.Forward about Curious there to any initiatives. see if to toward

Mike Broderick

for was Thanks, look the will I literally on. every of strategy Monro.Forward, good retail question. you retail. actually it. And by touched were aspect And just at that a there take the Rick, When hygiene, place. of and we talked about When journey look pricing. introduced category staffing literally about the tires put we we talked payroll you at product, of management and things and part management, system new When in assortment people training. retail, we we

really store are traffic mechanisms, do we to you of to into the added stores. customer? we And of of then you about talked level. it, the Monro.Forward, talked online continue top on about, we we paramount. technology of mind. customers prices, and is We’re the our and drive as when promotion, our is phone systems. foot our going our the are and illustrated, connection convenience very re-imaging marketing evolve least, And When We going categories. check and our revamped our And check availability, to We experience additional to but how digital top digital service look last that at efficient on and appointments, re-branding relying make is something not at

from strategy execution all this really is in profitability So that when about five things these all you bringing talk just successful going get these separate point It’s the maximize my right actually sound. together really pieces The us at now, puzzle mentioned, we it’s I – can what’s the from The job investments. of about to so is being not. or execution time.

Rick Nelson

for those acquisitions, and looking that. do curious, pay Mountain example? Also you’re you a the terms multiples View to to the speak in good you is plan re-brand environment you if there maybe And stores? Thank competitive to that of could

Brian D’Ambrosia

one, line calls, we been line paid certified don’t West have take in of and but in The what the been we We in our California much a largely deal. those them to quote we’ve in of specifically with on last couple talked in reasons, that what paid we multiples, have feel on do like I’ll that historically. been have we out competitive originally Rick. in as with deal expectations the pretty line initial our in the certified Coast out bolted there acquisitions for

you repeat relates it your second could the of question, to part of As question, part just second Rick? your the

Rick Nelson

I to guess View Do Mountain and you the stores the re-brand timeline? plan

Brian D’Ambrosia

That’s right.

at We brand brand, the out are looking brand is there. acquired portfolio. the strong View obviously Mountain We’ve a which

will look that, the role we West play Coast. at the So is to brand in that going

of some re-branded is which currently there out we’ve choice tire the what acquisitions our with. previous have We

out Tire be in its our terms View we We now that the both brand will Coast in of role and there acquired what portfolio. will West determine we Mountain that have that Allen right

Rick Nelson

good Great. Thanks and luck.

Mike Broderick

Thanks, Rick.

Operator

Thanks.

today question is Stephanie next Truist. Benjamin from Our coming from

now line Your is live.

Stephanie Benjamin

phone. Mike Nice over the morning. meet to good you, Hi,

Mike Broderick

Thank you, meeting virtually. Stephanie. Nice you

Stephanie Benjamin

talent? what this having demand environment. Are just technicians wanted for you’re more to for to be as technician having seeing oil are And other stores higher of I’d to on levels? bit anything, reopening? bit implement discuss you questions are you also, about a tires, to of If on attract any seeing? do you wage love You’re but then reopening might seeing inflationary commodity touch cost your overall find talked a importantly, a with is bit to the are it labor, Thank couple you In – ago, the increases and I on base little just how more what pressures you as easy you. operations? just you the to side on inflationary

Brian D’Ambrosia

let then any Mike take color this to add with, tires. Yes. I’ll I about made is since Brian. Stephanie, that the and the comment start

And tire on side. so we’ve seen that the

haven’t are there to the in. to we really build has see and parts begin that there to potential with you obviously, the start here. seen will expectations see, On – that start and that, everything side, to we much But start

will the of put ultimately, materials significant competitors, cost on the on about And be we’re consumer. the our margins Now that is And up were to that any advantage. on moving better is. we buyer of to that’s to and that to inflationary would buy pressures able, because need that the what categories, during do to that a used smaller And the able would inflationary ultimately Mike right the we to be P&L say, are in talent matter we to scale. to the we will industry, support competitive our if people good and our market be I us with labor, feel it have environment, be passed those make we And stores. be a got better we and large that able will earlier, continue we our period. provide we’ve related understand really than no sure and of words feel we will what the I think buying

pass Mike color. for I’ll So additional to

Mike Broderick

an labor not to Stephanie, focus employer? about our But news to inflation right I’m strategy, making from really their it now talk decisions trying employees think when with – into making the to people a are Monro.Forward, our along our And it’s coincidence that’s what their we we’re it looking and capacity as with pass that wage is I around there is – are are with and looking for planning, how careers, good do the work for really our stay on as rate. I teammates by incredible everything we’re our people people. back is best-in-class these come It’s things that employer, that they that’s become do do able training, focusing to starts that job on. what our to easier

Stephanie Benjamin

question. helpful guess Really I the there. And as follow-up Great. then

else good kind have hear, we we to think what whether terms tire. as across some I’d from the store love to that in this success XXXX the and tool we’ve implemented just other was pricing I return it’s of seen dig initiatives, of kind Monro.Forward, in along think you obviously store deeper forward. we maybe normalcy, little of of should bit good, move on With refreshes, the but better, of pricing commented as as a we through you the year? look next expect what just in strategy the best or fiscal kind continuation through

Mike Broderick

management tires, learnings this now and made I’ve with them that’s and and time, and we’ve the I’ll – what use a tool those learned introducing Allen teammate in the focused management, This and we’ve the suppliers learned offering is just relevant bring invest is View – We and and out-west. Mountain Monro.Forward two and into the Basically and customers moving offer traditional this choices. to in both we teammates, We what best-in-class. we our opportunity that take So partnering an our number customers’ invest Tires. two customer bring category really and service in tires stores acquisitions to our acquisition. to long category ourselves Mike. finish giving – our need to significant That’s so invest making with applying doing can for one. our is for categories had been that Number our it. them

going across But done categories. do Monro.Forward, that tires to with the them it’s back to the – much we that is it sale. work can – we’ve me service close gives the easier So lot for just a that confidence very the of

Stephanie Benjamin

Thank it. Got so you much.

Mike Broderick

Thank you.

Operator

of I’d back floor reached management We or end closing over for Thank further comments. turn question-and-answer like you. any to session. to our the the

Mike Broderick

joining for Monro. an you is time today. to us of exciting This be Thank part

of to a weeks value Have stakeholders. forward We day. have you ahead. look and strong the to to you create I progress foundation getting in and months great the future updating long-term on a our upon for build to the in know all

Operator

does That you. webcast. conclude and today’s teleconference Thank

disconnect day. may You We have and time, participation this line thank your you for at wonderful today. your a

Monro (MNRO) 20 May 212021 Q4 Earnings call transcript