Monro Muffler Brake CEO "cautious" about FY08
Monro Muffler Brake, Inc. (Nasdaq: MNRO) CEO Robert Gross said the company will be pushing its sales programs hard during the spring, “which is traditionally a high sales season.” Gross made the comments during a midday conference call.
Because of the challenging economy and weak consumer spending, the chief executive said Monro, a provider of automotive repair and tire services, is “cautious” about its outlook for the remainder of 2008. He balanced his remarks with positive notes about Monro’s January results.
“For the first three weeks of January, we had a total comparable stores sales increase of approximately 2.5%,” Gross said.
Due to weakness in consumer confidence and spending, Gross said Monro expects a comparable store sales increase during the fourth quarter of between 1% and 3%. Because Monro’s 2008 fourth quarter has one less week than in 2007, the chief executive said he expects comparable store sales as reported to actually be a decrease in the range of 3% to 5%. The loss of the selling week during the quarter will mean an earnings loss of about $0.05 per share, Gross said.
For the full fiscal year, Gross said Monro predicts revenue in the range of $440 million to $442 million, compared to $417.2 million in fiscal 2007. Analysts predict revenue of $438.4 million.
The CEO said the firm expects earnings in the range of $1.03 to $1.05 per share, compared with $0.97 per share during year-ago period. Wall Street analysts project earnings of $1.02 per share. The earnings estimate includes $0.03 in non-cash charges related to executive contracts, Gross said.
“We are pleased that our senior management team will be here for another three years,” he said.
The CEO said the firm will be implementing a new “low-cost, high-reward” advertising program that includes radio, print and Internet marketing.
“We tested several initiatives in November and had success driving sales, especially in areas where we had high store density,” Gross said. “We’re now in the process of planning our advertising program to position our business for a big push for these high-return programs starting in the spring.”
Before the opening, Monro reported third-quarter sales of $112.5 million, up 8.7% from $103.8 million a year earlier. Analysts predicted, on average, sales of $112.7 million.
The firm’s quarterly net income rose to $5.3 million, or $0.25 per share, compared with $4.9 million, or $0.21 per share, during the year-ago period. Wall Street analysts projected earnings of $0.21 per share.
In midday trading, MNRO shares are up 5.58%, or $0.95, at $17.99. Over the last 52 weeks, shares have ranged from $15.83 to $26.15.
