Knobias Clip Report (07-24-2008) MNRO
Submitted By Knobias ClipReport
MNRO: CEO Discusses Record Q1 Earnings and Outlook for FY09
By Fain Hughes, fhughes@knobias.com
Shares of Monro Muffler Brake, Inc. (MNRO) saw healthy gains on Thursday after the Company announced record financial results for its fiscal 2009 first quarter ended June 28, 2008.
Sales for the first quarter of fiscal 2009 increased 11.8% to a record $120.4 million compared to $107.6 million for the first quarter of fiscal 2008. Comparable store sales increased 5.6%, on top of an increase of 6.2% for the first quarter of fiscal 2008 and exceeded the Company’s previously estimated range of 3% to 5%. Net income for the quarter was $7.8 million as compared to $8.2 million for the prior year period. Diluted earnings per share for the quarter were a record $.39 and were at the high-end of the Company’s previously expected range. This compares to diluted earnings per share of $.36 in the first quarter of fiscal 2008. Gross margin was 42.3% in the first quarter compared to 43.4% in the prior year quarter due primarily to increased raw material costs, partially offset by price increases implemented throughout the quarter.
Based on year-to-date performance and current business trends, the Company anticipates comparable store sales growth in the range of 3% to 5% for the second quarter of fiscal 2009. The Company also expects diluted earnings per share for the second quarter to be in the range of $.36 to $.38, compared to $.29 for the second quarter of fiscal 2008. For fiscal 2009, the Company now anticipates comparable store sales growth of 3% to 4% and diluted earnings per share in the range of $1.10 to $1.18, compared with previous expectations of 2% to 4% comparable store sales growth and diluted earnings per share in the range of $1.08 to $1.18.
Robert G. Gross, Chairman and CEO of Monro Muffler Brake, commented in a conference call today, “We are pleased with our first quarter performance and are encouraged by the positive momentum that our business has sustained over the last several months, despite a very challenging economic enviroment.”
He explained, “Consumers are driving much less, 700-800 fewer miles per year on average, as a result of high fuel costs. However, our business has only been minimally impacted, if at all, by the decrease in miles driven because the decrease has not been enough to affect the need for oil changes. Tighter spending by consumers puts pressure on our store traffic and high-ticket repairs. At the same time, as new car sales decrease, vehicles must be maintained with higher mileage. Our business has also been subjected to higher costs for items such as oil and tires. Given these dynamics, we have adopted an effective strategy of driving store traffic from increased advertising spending and implementation of price increases.”
Mr. Gross concluded, “We are constantly assessing potential acquisitions. We are fortunate to have the financial flexibility and liquidity to take advantage of these opportunities as they present themselves. We are cautiously optimistic about our outlook for Q2 and the remainder of the year. In light of the difficulties that others in our industry have recently experienced, our quality service and trusted reputation have allowed us to capture market share and grow despite the economic enviroment.”
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