Monro reported Q2 fiscal 2026 results, with sales down 4.1% to $288.9 million from $301.4 million a year earlier, and comparable‑store sales up 1.1% year‑over‑year.
Diluted earnings per share remained at $0.18, matching the prior‑year quarter, while adjusted diluted EPS rose to $0.21, beating the prior‑year adjusted EPS of $0.17 and exceeding analyst expectations of $0.18.
Gross margin expanded 40 basis points to 35.7% of sales, driven by lower occupancy and material costs, offset by higher technician labor costs. Operating income was $12.8 million (4.4% of sales) and adjusted operating income was $14.0 million (4.8% of sales). Net income was $5.7 million.
Segment performance showed front‑end/shocks sales increasing 18%, brakes up 6%, tire and maintenance flat, alignments down 5%, and batteries down 21%. The company operated 1,116 company‑operated stores and 48 franchised locations, having reopened one temporarily closed store.
Monro generated $30 million in operating cash flow for the first half of fiscal 2026 and maintained strong liquidity with $10.5 million in cash and $409.9 million available under its credit facility. The company paid a $0.28 per share cash dividend.
The results were impacted by the closure of 145 underperforming stores in Q1 fiscal 2026, a strategic move to improve profitability. Monro also incurred $8.3 million in consulting costs and reduced inventory by $11 million in Q2, supporting its operational improvement plan.
Management noted softness in consumer demand, with preliminary October comparable store sales down 2%, but highlighted that the company achieved three consecutive quarters of positive comparable store sales growth, indicating a positive trend in same‑store performance.
Revenue fell short of analyst estimates of $297.4 million, but the company beat earnings expectations.
Monro did not provide fiscal 2026 guidance at this time, but the company emphasized its focus on profitable growth and operational efficiency.
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