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THIRD QUARTER FISCAL 2025 EARNINGS CALL JANUARY 29, 2025
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Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to our business plans and operating results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Monro has identified some of these forward-looking statements with words such as “believe,” “expect,” “estimate,” “anticipate,” “focus,” “will,” and the negative of these words or other comparable terminology. These forward-looking statements are based on Monro’s current expectations, estimates, projections and assumptions as of the date such statements are made, and are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. Additional information regarding these risks and uncertainties are described in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed periodic reports on Forms 10-K and Form 10-Q, which are available on Monro’s website at https://corporate.monro.com/investors/financials/sec-filings/default.aspx. Monro assumes no obligation to update or revise these forward- looking statements for any reason, even if new information becomes available in the future. In addition to including references to diluted earnings per share (“EPS”), which is a generally accepted accounting principals (“GAAP”) measure, this presentation includes references to adjusted diluted earnings per share, which is a non-GAAP financial measure. Monro has included a reconciliation from adjusted diluted EPS to its most directly comparable GAAP measure, diluted EPS in the appendix to this presentation. Management views this non-GAAP financial measure as a way to better assess comparability between periods because management believes the non-GAAP financial measure shows the Company’s core business operations while excluding certain non-recurring items such as costs related to shareholder matters from the Company’s equity capital structure recapitalization, transition costs related to the Company’s back-office optimization, store impairment charges, litigation reserve, net loss on the sale of the Company’s wholesale and tire distribution assets, net gain on sale of the Company’s corporate headquarters, and items related to store closings. This non-GAAP financial measure is not intended to represent, and should not be considered more meaningful than, or as an alternative to, its most directly comparable GAAP measure. This non-GAAP financial measure may be different from similarly titled non-GAAP financial measures used by other companies. Safe Harbor Statement and Non-GAAP Measures 2
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Third Quarter Accomplishments & Fourth Quarter Objectives Initiatives Driving Improvement in Topline Trends 3 Third Quarter Accomplishments: ▪ Drove a sequential improvement in our year-over-year comp store sales percentage change from the second quarter and returned our business to year-over-year comp store sales growth in the month of December1 ▪ Year-over-year comp store sales percentage change in both tire dollar and unit sales improved sequentially from the second quarter and our tire category sales comped positive in the month of December1, with year-over-year growth in units in the quarter ➢ Continued to leverage the strength of our manufacturer-funded promotions, which allowed us to meet the needs of a value-oriented consumer ▪ Drove sequential improvement in our year-over-year service category comp store sales percentage change from the second quarter and year-over-year growth in both units and sales dollars for batteries, alignments and front-end shocks Fourth Quarter Objectives: ▪ Preliminary fiscal January comp store sales down 1%2, driven by weakness in tire category sales that were impacted by extreme weather, which resulted in temporary store closures and lower store traffic, partially offset by strength in service categories, including brakes ▪ We expect to leverage our initiatives to achieve our fourth quarter objectives, which include: ➢ Improving store traffic trends driven by our value- oriented oil change offerings as well as continued growth in tire units, ➢ Accelerating the performance of our key service categories, utilizing the benefits of ConfiDrive, and ➢ Optimizing labor and efficiencies through continued improvements in productivity and maintaining prudent cost control 1 Adjusted for one fewer selling day in the current year quarter due to a shift in the timing of the Christmas holiday from the fourth quarter in fiscal 2024 to the third quarter in fiscal 2025 2 Adjusted for one additional selling day
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Allowed Us to Drive Sequential Improvement in Year-over-Year Service Category Comp Store Sales Percentage Change from the Second Quarter 4 ConfiDrive Digital Courtesy Inspection Process & Oil Change Offer ConfiDrive Digital Courtesy Inspection Process: ▪ Investment made in stores to convert 32-point courtesy inspection from paper-based process to digital, tablet-based system that presents other needed services to customers via industry data and pictures ▪ Gives store teams greater ability to build engagement and trust with guests, which supports additional service attachment ▪ Supports marketing back declined work in future visits ▪ Captures more structured data on vehicles with more control over a key in-store process ▪ Completed roll-out to all stores and pleased with early results Oil Change Offer:
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-5.7% -6.6% -5.6% -6.2% -1.2% -1.9% 1.1% -1.2% -15% -10% -5% 0% 5% 10% October November December January MTD FY24 FY25 -6.1% -7.2% -9.9% -5.8% -0.8% -15% -10% -5% 0% Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q3FY25 Third Quarter Fiscal 2025 Highlights ▪ Year-over-Year comparable store sales percentage change improved 500 basis points sequentially from the second quarter of fiscal 2025 2 ▪ Comp store sales decreased 0.8%2 (decreased 1.9%, unadjusted for days) ▪ Business returned to comparable sales growth of 1% in the month of December2 ▪ Comp store sales in ~300 small or underperforming stores were about 250 basis points higher than overall comp Comp Store Sales Trends Improved Sequentially from the Second Quarter & Business Returned to Year-over-Year Comp Sales Growth in December2 ▪ Product and service category performance2: ▪ Batteries: +30% ▪ Alignments: +13% ▪ Front End/Shocks: +6% ▪ Tires: -1% ▪ Service: -2% ▪ Brakes: -6% ▪ Service categories ~50% of sales, consistent with the prior year period 5 Quarterly Comparable Store Sales Trends Monthly Comparable Store Sales Trends 2 4 Preliminary results through January 25, 2025 Q3FY25 Key Highlights Q3FY25 Key Highlights 1 1 Adjusted for 53rd week of sales 2 Adjusted for one fewer selling day in the current year quarter due to a shift in the timing of the Christmas holiday from the fourth quarter in fiscal 2024 to the third quarter in fiscal 2025 2 4 3 3 Adjusted for one additional selling day
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Commitment to Sales and Unit Growth, Improving Customer Counts & Making Necessary Investments Third Quarter Fiscal 2025 Results 1 Adjusted for one fewer selling day in the current year quarter due to a shift in the timing of the Christmas holiday from the fourth quarter in fiscal 2024 to the third quarter in fiscal 2025 (decreased 1.9%, unadjusted for days) 2 Please refer to the reconciliation of adjusted diluted EPS in the appendix to this presentation and in our earnings release f or further details regarding excluded items in Q3FY25 and Q3FY24. Adjusted Diluted EPS is a non-GAAP measure that excludes certain non- recurring items such as costs related to shareholder matters from our equity capital structure recapitalization, transition costs related to our back-office optimization, store impairment charges, litigation reserve, net loss on sale of the Company’s wholesale and tire distribution assets, net gain on sale of the Company’s corporate headquarters, and items related to store closings. A reconciliation of net income to adjusted net income and diluted EPS to adjusted diluted EPS is included in our earnings release dated January 29, 2025 3 The Christmas holiday shift causing fewer selling days negatively impacted both diluted earnings per share and adjusted diluted earnings per share by approximately $.05 in the third quarter of fiscal 2025. 6 Q3FY25 Q3FY24 Δ Sales (millions) $305.8 $317.7 (3.7%) Same Store Sales1 -0.8% -6.1% 530 bps Gross Margin 34.3% 35.5% (120) bps Operating Margin 3.3% 6.7% (340) bps Adjusted Diluted EPS2,3 $.19 $.39 (51.3%)
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Strong Financial Position Operating Cash Flow Supports Growth Strategy and Capital Return to Shareholders 7 Disciplined Capital Allocation YTD Fiscal 2025 ▪ Received ~$9M of divestiture proceeds ▪ Received ~$9M from sale of corporate headquarters ▪ Capex of ~$21M ▪ Spent ~$30M in principal payments for financing leases ▪ Paid ~$26M in dividends ▪ Generated operating cash flow of ~$103M, including ~$27M of working capital reductions during YTD fiscal 2025 ▪ Net bank debt of ~$49M and net bank debt-to- EBITDA ratio of 0.4x as of December 2024 ▪ Total liquidity of ~$521M as of December 2024 Strong Balance Sheet and Liquidity
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Fiscal 2025 Expectations 8 Fiscal 2025 Expectations ▪ Fiscal 2025 is a 52-week year while fiscal 2024 was a 53- week year that benefitted from an extra week of sales ▪ Remain focused on sales and unit growth and improving customer counts while making necessary price and promotional investments ▪ Expects to generate at least $120M of operating cash flow, inclusive of working capital reductions ▪ Expects to spend ~$25M to ~$30M of CAPEX ▪ Preliminary fiscal January comp store sales down 1%1, driven by weakness in tire category sales that were impacted by extreme weather, which resulted in temporary store closures and lower store traffic, partially offset by strength in service categories, including brakes 1 Adjusted for one additional selling day
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Appendix 9
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Reconciliation of Adjusted Diluted EPS (Unaudited) 10 2024 2023 Diluted EPS $.15 $.38 Net loss on sale of wholesale tire and distribution assets - .01 Transition costs related to back-office optimization .01 .00 Store closing costs .01 (.00) Litigation reserve .01 - Costs related to shareholder matters - .00 Net gain on sale of Corporate headquarters .00 .00 Adjusted Diluted EPS $.19 $.39 Quarter Ended Fiscal December Note: Amounts may not foot due to rounding.