Monro Inc. announced financial results for its fourth quarter and fiscal year ended March 26, 2022.
During the fourth quarter of fiscal 2022, the company opened one store. Monro said it ended the quarter with 1,304 company-operated stores and 80 franchised locations.
Sales for the fourth quarter of the fiscal year ended March 26, 2022 (fiscal 2022) increased 7.4% to $328.0 million, as compared to $305.5 million for the fourth quarter of the fiscal year ended March 27, 2021 (fiscal 2021), Monro says. The total sales increase for the fourth quarter of $22.5 million resulted from a comparable store sales increase of 1.4% for the period and an increase in sales from new stores of $19 million, primarily from recent acquisitions. This compares to an increase in comparable store sales of 9.4% in the prior year period.
Comparable store sales increased approximately 2% for brakes and were approximately flat for maintenance services and front end/shocks compared to the prior year period. Comparable store sales decreased approximately 1% for tires and alignments compared to the prior year period.
Total operating expenses for the fourth quarter were $93.2 million, or 28.4% of sales, as compared to $86.4 million, or 28.3% of sales in the prior year period. The year-over-year dollar increase resulted primarily from the expenses of 41 net new stores as well as due diligence and integration costs related to acquisitions completed and evaluated in fiscal 2022.
Operating income for the fourth quarter of fiscal 2022 was $11.5 million, or 3.5% of sales, as compared to $20.7 million, or 6.8% of sales in the prior year period. Interest expense was $5.7 million for the fourth quarter of fiscal 2022, as compared to $6.7 million for the fourth quarter of fiscal 2021, principally due to a decrease in weighted average debt.
Net income for the fourth quarter of fiscal 2022 was $8.6 million, as compared to $11.8 million in the same period of the prior year. Diluted earnings per share for the fourth quarter of fiscal 2022 was $.25, compared to $.35 in the fourth quarter of fiscal 2021. Adjusted diluted earnings per share, a non-GAAP measure, for the fourth quarter of fiscal 2022 was $.20, which excluded approximately $.04 per share of costs related to store impairment charges and acquisition due diligence and integration costs and $.09 per share of income tax benefit related to net operating loss carryback. This compares to adjusted diluted earnings per share of $.38 in the fourth quarter of fiscal 2021, which excluded $.03 per share related to Monro.Forward initiatives, management transition costs, and a distribution center closure.
“I’d like to thank all of our teammates and customers for their contributions to Monro’s growth and prosperity, and our shareholders for their continued support. After 20% comparable store sales growth in the first nine months of fiscal 2022, the fourth quarter was severely impacted by the surge in COVID-19. During fiscal 2022, we made significant investments in technician headcount to expand sales and earnings. While this put pressure on gross margin, it has positioned us to capture growing industry demand for our products and services. We are implementing a strategy to improve our underperforming stores and we have evidence that our efforts are already working. As we move forward into fiscal 2023, sales trends are encouraging. While April’s comparable store sales were 3% lower than a record April last year, May is trending 3% higher on a larger sales base,” said Mike Broderick, president and chief executive officer.
Broderick continued, “Today [May 19, 2022] we announced our intention to divest our non-core Wholesale and tire distribution assets to American Tire Distributors for an estimated $105 million. As part of the transaction, we will enter into a supply agreement that will give us better availability of tires, quicker delivery and better pricing. Beyond the financial benefits, this divestiture will enable us to sharpen our focus and resources on our Retail operations. The proceeds, along with cash generated from operations, will allow us to return capital to shareholders through healthy dividend and share repurchase programs as well as capitalize on acquisitions.”
Full Year Results
Sales for fiscal 2022 increased 20.8% to $1.359 billion from $1.126 billion in fiscal 2021. Comparable store sales increased 15.2% compared to a decrease of 11.1% in the prior year. Comparable store sales increased approximately 29% for brakes, 26% for alignments, 16% for front end/shocks, 16% for maintenance services, and 11% for tires compared to the prior year.
Total operating expenses for fiscal 2022 were $380.5 million, or 28% of sales compared to $323 million, or 28.7% of sales in the prior year. The year-over-year dollar increase resulted from increased store management payroll and store operating expenses needed to support current and future topline growth, expenses of 41 net new stores as well as an increase in litigation settlement costs.
Operating income was $101.3 million, or 7.5% of sales, compared to $72.2 million, or 6.4% of sales in the prior year. Interest expense was $24.6 million in fiscal 2022 compared to $28.2 million in the prior year, principally due to a decrease in weighted average debt.
Net income for fiscal 2022 was $61.6 million, or $1.81 per diluted share, as compared to $34.3 million, or $1.01 per diluted share in fiscal 2021.
For more information, visit www.monro.com.