Good afternoon, everyone, and thank you for joining our Monro Fireside Chat. If anyone in the room has any questions during our conversation, feel free to raise your hand or speak up if needed. With that, I would like to thank EVP and CFO, Brian D'Ambrosia, and Senior Director of Investor Relations, Felix Veksler, for joining us today, and I believe management has some opening remarks. Thanks, Tom. Good afternoon, everybody. Just as a way of introduction, Monro is one of the largest and leading auto service and tire providers. We deliver best-in-class service across multiple categories, including oil changes, tire and tire-related services, brakes, and all the way up to the most complex vehicle repairs. We've got about 1,300 locations, or approximately 9,000 service bays in 32 states, and that gives us significant scale and competitive advantages over smaller players in our fragmented industry. In 2024, we did about $1.3 billion in sales, and we generated operating cash flow of about $125 million. Just to quickly highlight the three main components that we're trying to drive our strategy to produce these outputs, the first is obviously sustainable comparable store sales growth. We're driving this through properly staffing our stores, properly scheduling our stores, maintaining a balanced approach to our growth between our service categories, which are higher margin, and our tire categories. And we're doing this through traffic driving initiatives and maintaining competitive pricing in our stores, and also always continually improving the guest experience through investments in our people, investments in our processes, and in our in-store technology. The second desired output, obviously, is margin expansion. And we're doing this through labor optimization, productivity improvements, including our selling and training and scheduling initiatives to deliver margin expansion related to our labor productivity. And then finally, cash generation is the third component. And we're delivering this through really working capital enhancements, leaning on our strategic relationships with our large suppliers to manage availability, quality, but also quantity of parts and tires in our stores, and using these strategic partnerships to leverage extended payment terms. More recently, we've implemented three top-line initiatives designed to increase traffic and increase sales conversion. The first relates to our tire category. We want to deliver more cars to our stores through additional tire units, selling additional tire units in our stores. And we're doing this through our value-oriented consumer. That value-oriented consumer is looking for price and for a price point. And we're competing against some of our lower-cost competitors and lower-cost tiers through manufacturer-funded promotions. The second component of our traffic driving is our oil change initiative. Oil represents an important component of our traffic. We have a partnership, a renewed partnership with Valvoline, where we're leveraging promotional offers to our customers with the support of Valvoline. As we drive additional traffic to our stores, it is then up to us to convert those into other services. We've launched what we call our ConfiDrive Performance Review, which is a digital courtesy inspection enabled by tablet technology in our stores, where our technicians inspect the vehicle across a 32-point inspection. The findings of that are communicated to the guests through the tablet technology, either in-store or, if they're not waiting for their vehicle, through text or email, including pictures and giving them a full health report of their vehicle, and then making and helping them prioritize recommendations for additional services their vehicle may need. This is important to support categories like brakes, like batteries, like alignment. These are higher-margin attachment categories that can be attached to the oil and tire traffic. In our most recent second quarter, we drove sequential improvement in comps from the first quarter of about 410 basis points, and we saw a significant acceleration in our comp trends as the quarter progressed, so it gives us confidence that our initiatives are working. As it relates to the traffic side of things, importantly, our tire unit sales improved sequentially from the first quarter, but also saw positive growth in units in the month of September. As it relates to our service categories and the effectiveness of our ConfiDrive digital courtesy inspection, we saw significant growth in our battery category in the quarter end of September. In the month of September, we saw improvement in growth year-over-year in our alignment category. And while we did not see overall growth year-over-year in brakes, we did see sequential improvement in brakes as the quarter progressed. That gives us confidence that our courtesy inspection is resonating with our teammates and with our guests as we attach those services to our existing traffic. One of the things that happened in the quarter is our gross margins did take a step back. And we still feel confident, though, despite that step back in margins, down about 40 basis points over the prior year, that we are on a path to restore gross margins back to pre-COVID levels, with double-digit operating margins over the longer term as return to top-line growth. Importantly, our solid financial position and our strong balance sheet and cash flow generation position us to fund all of our capital allocation priorities, and we're returning cash to our shareholders through a healthy dividend program, while we also continue to maintain and pay down to a very conservative leverage profile. So overall, we feel that Monro is well- positioned within a rugged and resilient tire industry and auto service aftermarket industry. There are short-term things that are working against us related to the consumer, but the underpinnings for, such as vehicle age, such as vehicle miles traveled, and number of vehicles on the road underpin a strong aftermarket for years to come, and we're positioning Monro to take advantage of that. So with that, I'll turn it back over to Tom. That was great. Thanks, Brian. Just going back to the tire units, you saw some sequential improvement last quarter. How did tire volumes kind of shape up in fiscal or in October? Yeah, in October, we continued the positive trends in tire units and built on the momentum that we gained as the quarter went on and improved further off of the September trends. Okay, and then just focusing on the tire mix, you saw a shift to Tier 3 tires last quarter. It looks like that might have taken a bit out of the higher tiers as well as stopped some of the Tier 3 customers from moving to Tier 4. How are you seeing the mix shape up this quarter, and how are your suppliers shaping your offer and you shaping your offerings to direct customers currently? Yeah, that's exactly what happened in the quarter is our focus has been on growing share and growing units in our Tier 1 through 3 offerings. And the importance of that is that these are good tires for the consumer. They're branded tires. They've got good manufacturer warranties. They're good applications for most of the vehicles that we see, and the guest is going to like how they ride and the control and the feel of the tire. They're also good for Monro in that they provide higher margin opportunities and higher ASPs. And they're good for our manufacturer partners. Obviously, we want to sell their tires whenever we can. The Tier 4 tires are more of a private label import program. They come from overseas. They are not the first choice among consumers, but they are an option when price is really the largest consideration. So what we've done with our manufacturing partners is really offered Tier 1 through 3 promotions, particularly in our Tier 3 offering, buy three, get one on a set of four Cooper is a good example. That prices that Cooper Tire at parity with the opening price point tire and allows us to keep the consumer in a good tire for them, sell our manufacturer's tire, but also preserve the margin profile for Monro because we're getting manufacturer support on that offer. What we've seen is that's really helped us to preserve our Tier 1 through 3 share relative to Tier 4. But we also saw in the quarter, though, was for the first time some trading down of Tier 1 and 2 into Tier 3 as well. And that wasn't just limited to Monro. That was across the tire industry. Tier 1 gave up share of the tire screen to Tier 3 in the quarter. That put pressure on our margins as we traded down from higher value Tier 1 into some lower margin Tier 3. But overall, we maintained our Tier 1 through 3 mix and had a higher ASP than the industry because of that. We think that that dynamic likely continues. We see that the consumer is going to continue, we believe, in the back half of our fiscal year ending in March to see pressure on their wallets and on their ability to buy higher price tires. They're going to continue to look for value in Tier 4, and we're going to continue to meet them with a great Tier 3 offering that provides them better value than having to settle for a Tier 4 tire. We also expect that the trade down will continue into Tier 3, and the Tier 3 could likely become the largest segment of the tire aftermarket as this year goes on. Okay. And you mentioned the buy three, get one free program run by the manufacturers. How have those and the supplier rebates changed throughout the current cycle? And then kind of what are your expectations for those and the utilization of them moving forward? Yeah, it's interesting. I would say that we have been committed to a healthy screen and keeping our Tier 4 at 25% of our overall sellout. The industry has been trading down to a much larger portion of Tier 4, 35% plus in some cases, and depending on who our competitor is. But what I would say is that the difference between us now and maybe us six months or a year ago is the amount of support that we're getting from our manufacturers. While we were trying to preserve this screen in the back half of FY 2024, we were largely going it alone in that we didn't have manufacturer support that certainly hampered our units and our ability to sell Tier 1 through 3 tires at a competitive price point. I think the realization of the pressure that was being faced, the realization of share loss to Tier 4 and to opening price point really motivated our manufacturing partners to support Monro, and I think we rewarded them back by outperforming the industry in Tier 1 through 3. We're selling more units of Tier 1 through three tires than the industry was, and we certainly did that in our Q2. Okay, and then can you maybe give us a little bit of color on how the utilization of this buy three, get one free offering has been kind of impacting your revenue line? It feels like you're selling 25% less tires just off of that. Yeah, the important thing to note here is that the one free has manufacturer support behind it and some Monro self-funding. So as we have grown our overall units, we have seen pressure on overall tire ASPs because of the self-funded portion of any promos that we've been running. However, that ASP is still higher than it would have been or what the industry is by selling predominantly Tier 4 because of the manufacturer support, keeping our average selling price higher when factoring in the reimbursement from the manufacturer. Okay, and then just one final point on tires. Looking at the tread life of tires bought during the COVID boom, it looks like we could be heading towards kind of a super cycle of tire purchases beginning in the back half of next year. Just what are your thoughts around the possibility of a super cycle and the impacts it could have in the business? Yeah, I mean, I think that there is a real dynamic at play around the amount of tires that were purchased post-COVID with stimulus money. I think that a lot of those tires are now kind of coming due in terms of replacement. And then I also think there's real data to support that the amount of Tier 4 tires that have been sold since COVID and since the kind of price shock that the consumers have faced are going to have less miles driven on them. So you can see in some of the modeling that you'll have the replacement cycles kind of marrying up where the replacement cycle from those branded tires that were sold right after COVID with the stimulus money and the replacement cycle or more frequent replacement of the Tier 4 tires will create kind of a pent-up amount of demand that will come, like, come due at the same time. So certainly, we've seen the modeling, and we're positioning our business for what I think is strong overall industry demand over time. And I've said this before in that the car is being driven, the car is aging, and there are more vehicles on the road than ever before. But at the same time, the consumer who's driving that car is under the pressure right now. They're making short-term decisions to try to make these categories as discretionary as possible, even though over the longer term, they really are non-discretionary in order to keep the vehicle on the road. And I think this tire dynamic is one that it'll be interesting to see how that consumer behavior plays out. The big question will be what will they replace those tires with, I think. Will those tires turn into a tailwind for Tier 1 through 3, or will they turn into a tailwind for more Tier 4 purchasing? Yeah. Okay, and then just kind of shifting the focus over to oil changes. It's another big traffic driver for the company. How are you adjusting the oil change business to help draw more customers in? Yeah, it's really been through our renewed partnership with Valvoline. Valvoline's been our oil supplier for a long time. We entered into a new agreement with them. This is the first agreement that we've entered into them post-spinoff from the broader Valvoline instant oil business, and we really like the programs that we've been able to jointly put in place with them. We feel very supported in our journey on trying to win back an oil customer that was significantly disrupted during COVID. We'd already been seeing elongation in service oil change cycle prior to COVID. During COVID, we did see some channel shift to the instant oil change providers, a very safe and convenient option for somebody that doesn't want somebody else getting into their vehicle during the height of the COVID pandemic, and they've done a great job of holding on to those customers. And we feel like we've got some offers and some incentives that we're entering into with Valvoline as part of their V-Perks and their loyalty program to win a lot of those customers back. And we really feel that the benefit of our complete oil change, inclusive of the courtesy inspection to give you a vehicle health report, is a differentiator that we're going to make sure that the consumer knows about. Yep. And that was actually the next point I was going to roll into. So earlier this year, you completed the rollout of your digital inspection ConfiDrive. Can you just give us some color around how has this impacted attachment rates once you get a vehicle in? Yeah, absolutely. I mean, I think that this is for us a game changer, first of all, in that our old process for courtesy inspection was paper-based. And before we get into how that impacts the consumer experience, let's just talk about managing a store. The ability to see structured data coming out of a digital environment for us to be able to understand, are the courtesy inspections being done on every vehicle? How long are they taking per vehicle? What are the results in terms of how many red, yellow, green, and how does that stack up relative to what we know the average car on the road needs? It really helps us to understand the quality and the completeness of the courtesy inspections we're performing. And that really allows us to use that reporting to manage our business in a really, really structured way. Move to the consumer side of it, it's a much better experience. They're not getting kind of handwritten, greasy fingerprint paper. They're getting a digital printout or digital email or text to them really that becomes a real health check of their report of their vehicle. And so they use that report then to sit with the store manager and figure out what else should I be doing today and what should I be doing in the future? And that's really where it can enhance in so many ways the educational selling that our stores attempt to do with our guests when we find other needed work for their vehicle. Where we're really seeing the benefits of it, I think, is in categories like I had mentioned earlier, our battery category, where now we are doing battery testing on every single battery that comes in. We know that we're doing this because we have the ConfiDrive reporting that tells us that we're doing it. That inspection, that measurement of the battery, testing of the battery presented to the guest is yielding 20% battery growth year-over-year. And that's a good example of a category that the ConfiDrive has benefited. Another good example is alignments. What we're finding is we're putting every car on the alignment rack. We know we're putting it on the alignment rack because we have the ConfiDrive reporting to make sure that we're putting every car on the alignment rack. And we're making the guest understand and helping the guest to understand that a $100 alignment can protect their tires to the point where maybe they won't need that tire replacement in six to 12 months. Maybe we can get them through 18- 24 months. So those are two categories where the inspection plus the conversation with the guest has really led to outsized performance in terms of those two categories relative to where our traffic is. We're converting at a higher rate. Areas where we're improving, but we're not quite there yet. An example is brakes. Brakes, we're doing the inspections, we're miking the rotors, we're measuring the brake pads, we're making sure that the guest understands. But brakes can be a higher ticket category. And so we are seeing that the conversion of that higher ticket category on an already stressed consumer has been a challenge. And so we've got some ways that we're addressing that conversion rate. But it's consistent with what we're seeing in the brake category across the industry, which is pressure on brake units, likely because of the high ticket nature of the thing. Yep. And you kind of highlighted batteries. Battery Battery is kind of a shining star for you guys right now. And that's pretty much been completely driven by just testing. It feels like, are you expecting any kind of seasonality in the battery revenue as we move into the colder months? Yeah, I mean, there's always seasonality in batteries. I mean, the heat of the summer is worse than the cold of the winter in terms of battery cranking and starting power. But I think what's important for us is just to make sure that the guest knows really where their battery is at before it comes to catastrophic failure. We don't want their car to come to our store on the back of a AAA tow truck, right? We want their car to come to our store and us to identify that need before it becomes a problem for them, before they're stuck on the road or stuck at work or stuck in their driveway, and that's where the testing comes into play. And it's one of the reasons why I think we've seen such success in a category like batteries is there is very little objection that is usually made once you make them aware of the need for a battery because the result of being stranded somewhere is usually worth the money that a $200-$250 battery costs. So that's our job. And I think that as the winter goes along, it'll put more and more strain on batteries. So hopefully we can catch more and more before they fail. Good. And then, just kind of overall service categories, there were 51% of sales last quarter. What do you think is kind of an appropriate revenue mix there? Yeah, I think we've said we always want to be 50/50. I think that's really healthy for our business. We want to grow in a balanced way. If we're up in comps, we want to be up in comps across all categories in the same proportion. I think certainly when we lean more into service, we see margin benefit. When we lean more into tires, we see margin pressure. But over time, this is a business that we feel, except for maybe a category like batteries, it maybe has some outsized opportunity given the small nature of it and how big it is in the aftermarket and our renewed focus on it. But overall, for our mainstay categories, brakes, oils, alignment, tires, we would see consistent growth across the board. Okay. And then just kind of summing up this whole revenue section, you've mentioned on the earnings call, comparable store sales would have been flat in October, excluding hurricanes. What are the main drivers of these sequential improvements we've been seeing in comps? And then what's your confidence that we have the ability to continue seeing sequential improvement? Yeah, I think. I mean, we talked about the three pillars of the strategy is getting our tire units. And we talked about this in May on our earnings call after we reported our Q4. Mike made the declaration that we're going to get our tire units back. And I think we had a lot of confidence at that time knowing what we had negotiated and were in process of putting in place with the manufacturers. So that has been a key driver of all of that sequential improvement has been that tire strategy and the Tier 1 through 3 tire strategy. Oil has been more supportive, while not positive, has been more supportive because of the Valvoline relationship. And I think our conversion into other categories by leveraging the ConfiDrive, we only went live April 1st in all stores with the digital courtesy inspection. And a lot of the first couple of months was a lot of pushing and pulling with the organization in terms of change management and adoption and all that. But I think we got our footing underneath us. And it really was a huge benefit in the second quarter to the improvement that we saw sequentially in our service comps. So I'd like to largely attribute it to those internal initiatives that we've been focused on. In our view, the consumer has not gotten better. The industry is still challenged. The value-oriented nature of the consumer has not changed. The deferral cycle has not shortened. If anything, it's elongated. And the trade-down pressure, like we talked about with Tier 3, from Tier 1 and 2, if anything, is getting a little bit worse. So overall, I think we've found some things that are working in this challenging environment. We expect that if we continue to improve our execution against those same things, we'll get better and better results. Okay. Yep. [audio distortion] I just want to ask a question about the pandemic. We're all under the virtual system. We're not just currently playing with virtual systems. I feel like the story used to be the market is leaning more towards premium, the organically increasing store sales, or if organics could, you know, value drivers and stuff. Just curious. I know there are some things that the world's not going to trade down, but it seems like that bigger picture has broken down over the years. It seems like the closer to the end. Any big takeaways or? Yeah, I think this has been a slow period of M&A in general. The cost of capital increase on the interest rate side and the sellers that Monro grew up on buying family-owned stores, five to 40 store chains, the sellers' expectations have not changed relative to the cost of capital. So you've seen kind of some bid-ask spreads open up, and therefore this has been a period of time that there's been much slower M&A. We've seen everything that's gotten done, and there's nothing that we've passed up on that we would have wanted to have gotten done. I would say this has also been a period of time where we've intentionally been more introspective and not as interested in unit growth and chasing unit growth right now. I think if you look at Monro has grown up to be 1,200 stores primarily through acquisitions. And we've gone through a period of time here where we put some foundational tools in place to be able to manage a 1,200-store chain, to position a platform for the next 1,200 stores of growth, and to make it a better buyer of businesses from here as we plug additional locations into a solid and strong operating model. And so we've taken the time over the last multiple years to be able to put those underpinnings in place with the overall long-term goal of returning to a double-digit top-line growth algorithm that's really its foundation is a low to mid-single-digit comp store growth story supplemented by unit growth. And I think that it was important for us to take this time to do that, to make sure that we've got that foundation in place rather than continuing to see comp growth and comp declines, comps flat and comp declines, but trying to throw more and more stores on top of that. Ultimately, law of large numbers is you can't get enough store growth at the top line to maybe outrun some of the underlying operational processes you have to improve in your overall store base. So we've been focused on that. But I do agree with you that that story, I don't think it's paused. And I think that ultimately will be a likely capital allocation priority will be M&A again as we move past this period of time. Okay. Shifting gears a little bit here then. I just want to touch on your expectations for gross margin expansion in 2025 versus 2024. Can you give us an idea of how we should be thinking about gross margin in the back half of the fiscal year? Yeah, absolutely. We've said publicly that we expect gross margin to be higher in FY 2025 for the full fiscal year than it was in 2024. We're already running there for the first six months, largely led by our first quarter performance. We took a little bit of a step back in Q2. But what I would say is if we think about maybe the forces at play in the back half of the year related to gross margin, I would say that the first thing is that we expect the trade-down in tires to persist. And that will be a persistent headwind in the back half of the year in our estimation. But we do also expect that as we're making improvements in our service categories and we're closing the gap between our tire performance and our brake performance and our other service category performance, that that will represent a benefit to our gross margins in the back half of the year as we get a much healthier balance of service and tire mix. And then also with better top-line performance will come better fixed cost leverage. We do have occupancy costs that reside within cost of goods. And they deleveraged, for example, 60 basis points in our second quarter on about a down 5.8% comp sales decline. A flat comp would have obviously neutralized that 60 basis point headwind. So with better sales trends that we experience later into the quarter and into October, that would help to offset some of the headwind that we have seen in fixed cost deleverage. Then finally, we have technician productivity, as I talked about in my prepared remarks, that has been a tailwind for gross margin expansion. We expect that to continue in the back half. It may diminish a little bit as we're lapping prior year benefits, but we do expect continued labor productivity improvements in the back half. Okay. And then just kind of as we think more longer term and as you work towards that 37%-38% pre-COVID gross margin, is this mainly kind of a revenue ramp allowing you to better leverage the expenses, or is there something else we should be thinking about there? I think that fixed cost leverage is certainly a big part of it. I think we need to see top-line growth in order to more than offset our inflation hurdles, right? And so we'd like fixed cost leverage both in gross margin, but also against our significant G&A base will drive operating margins towards where we want them to be. But also we will need to continue to see variable margin improvement. And we think that the underpinnings of that will be service growth, like we talked about. But ultimately, we will need to see a consumer environment that is bringing tire mix back to maybe some more historical norms versus this more pressured environment that we're in currently. Okay. All right. And then just touching base on the 300 small or underperforming stores you have. These were first mentioned in 2022, and I think you've closed 44 stores since then. They've been performing in line with the overall comps for the past few quarters. What's kind of left there in terms of getting those on par with the remaining stores? Yeah, if you look at those stores, there's like anything, there's a bell curve, and there's stores at the one end of the bell curve that are kind of beating our expectations from where we want them to be, and then others that are at or below. Some of the ones that have been below have been the subject of those closures as we've looked at those stores both through the operational and real estate lenses, and then at the same time, I think the important thing to take away is that we still expect that those 300 small and underperforming stores can be double-digit growers, right? We should see significant outperformance of those stores relative to the chain. I think what's held them back has been the environment that we're in. They tend to perform worse than the chain traditionally in tough periods. When things are improving, they tend to outperform the chain. I just think we've seen a period of time of this persistent pressure where these stores have not done worse than the chain. They've done equal to the chain, which in and of itself is a victory relative to history, but still not where we want them to be. We continue to focus on getting them to significant comp outperformance relative to the chain. We're focused on staffing in these stores. We're focused on providing them with marketing support, promotional supports, merchandise support. They're getting our full attention. We think that will pay off as conditions improve. Okay, and then I did want to make sure we touched on if there were any updates around the American Tire Distributors' bankruptcy. Anything new there at all? Yeah, nothing new. No, we made some disclosures in our 10-Q filing and made some comments on the call, but ultimately, they're acting as a good partner to us during this period of restructuring for them, and we're acting as a trying to be a really good customer, and if that changes, we'll certainly make sure that that's properly disclosed, but at this point, I think we really feel that the partnership is still operating during this restructuring period as intended. All right. Is there a, go ahead? [audio distortion] Just ask a quick question on cash. You're saying sales is pretty low, but 2%, is that enough to keep the stores refreshed or within? How much can they automatically go? Yeah, yeah. We've said we were going to generate this year about $120 million of operating cash flow. And we had about a $25 million or $35 million CapEx budget. That CapEx budget is our maintenance CapEx, which includes our required store refreshes. So when we've gone on some projects where we've done guest waiting rooms, guest bathrooms, it includes our new roof, stripe and seal, paint where needed. So it's a typical kind of retail maintenance program that you would expect to keep the stores refreshed and in good shape. It doesn't include major remodels or major rebrandings as we don't have any of those planned on the horizon. That's all encapsulated in the $25 million-$35 million. And the reason why the $120 million is important of operating cash flow is it funds all of our capital allocation priorities. We've got about $40 million annually that we pay in finance lease payments, $25 million-$35 million of CapEx, $40 million on our dividend, and then the remainder is used to manage and maintain a conservative balance sheet. Right now, that's the capital allocation priorities. Also, we fund our $40 million dividend. Those are the capital allocation priorities, so the strong balance sheet that we have and the significant cash flow we generate gives us a lot of flexibility, though, to pivot those priorities to either M&A opportunities or more shareholder-friendly actions like we've taken in the past relative to share repurchase or dividend growth. [audio distortion] These aren't store operating leases, right? Yeah, they are. So a portion of our store operating leases for accounting purposes are classified as what used to be called capital leases, but now are finance lease obligations. So that represents those stores that it's still just a lease to own the store, but because it trips certain accounting rules, it's considered to be finance leases. Okay. Is there anything else that you think we're missing that you'd like to discuss before we end the fireside? No, I appreciate the time. I think just to recap that Monro is navigating a challenging industry environment through focus on our traffic driving categories as well as investments in technology and process to convert additional services on that traffic. I think that a value-oriented consumer is putting pressure on our overall margins at this point with the trade down into Tier 3. But at the same time, the strength of the industry is clear. The car park dynamics are strong, and that over the long- term, we feel really well- positioned to capitalize on those industry strengths. All right. Thank you. Thanks.