Monro Muffler Brake Inc.'s (MNRO) fiscal fourth-quarter profit
soared 57% as store traffic got a boost from cost-conscious vehicle
owners doing more of their own repairs.
The auto-repair company also announced a 17% dividend increase
and said it will spend $10 million to acquire 26 Autotire Care Care
Center stores in Missouri and Illinois from Am-Pac Tire
Distributors Inc. by the end of June. The markets are new for Monro
Muffler, which has 714 stores in 17 states.
Meanwhile, Chief Executive Robert G. Gross noted, "We continue
to experience very positive trends in our business as we enter our
new fiscal year." The company reaffirmed its full-year outlook and
gave a fiscal first-quarter earnings estimate in line with Wall
Street's views.
Monro Muffler and others in the auto-repair space are benefiting
as more people turn to patching up their existing vehicles instead
of buying new ones, as evidenced by auto sales plunging to
multi-decade lows. The average car in the U.S. is now estimated to
be about 10 years old, said Monro Muffler.
The company's results also have been helped by the continuing
decrease in service bays as struggling U.S. auto makers shutter
dealerships. Gross said Thursday he expects Monro Muffler to pick
up personnel and customers from Chrysler LLC and General Motors
Corp. (GM) as more than 1,000 of the companies' dealerships
close.
The chain reported a profit of $3 million, or 15 cents a share,
up from $1.9 million, or 10 cents a share, a year earlier. Monro
Muffler's forecast, boosted in March, was 12 cents to 15 cents.
Revenue rose 9.3% to $117.1 million as same-store sales climbed
11%, beating the company's March estimate of 10% growth. Store
traffic rose 5.5%.
Gross margin increased to 38.4% from 37.3%, helped by price
hikes.
For the fiscal first quarter, Monro Muffler projects earnings of
42 to 47 cents a share, including the Autotire deal, on same-store
sales growth of 4% to 7%. Analysts were expecting 46 cents.
Shares closed Wednesday at $26.93 and were inactive premarket.
The stock is up 52% in the past year.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com