Monro sales fall 7.2% on store closures while net loss narrows

Monro (NASDAQ:MNRO) reported a 7.2% decline in fourth-quarter sales, primarily reflecting a major restructuring program that shuttered more than a hundred underperforming stores earlier in the year.

However, a sharp reduction in asset write-downs and lower overhead costs helped the automotive maintenance and tire service chain significantly narrow its statutory net loss.

Sales for the three-month period ended March 28, 2026, dropped to $273.8 million from $295 million in the same period last year.

Beyond the structural exit from 145 underperforming locations during the first quarter of fiscal 2026, top-line performance was pressured by a 2.4% decrease in comparable store sales from continuing locations.

Demand across service categories was soft; while front-end and shock services ticked up 1%, comparable sales dropped 1% for brakes, 2% for tires and maintenance, 3% for batteries, and 4% for alignments.

Despite the lower overall volumes, the company expanded its gross margin by 90 basis points compared to the prior year's quarter.

The margin improvement was driven primarily by lower technician labor costs as a percentage of sales, which effectively offset rising material expenses and higher relative occupancy costs.

Total operating expenses for the quarter fell to $98.1 million, or 35.8% of sales, down from $121.1 million a year ago.

This reduction was primarily driven by a $22.5 million decrease in year-over-year store impairment costs and $6.9 million in saved overhead from the closed locations.

These savings were partially offset by a $6.9 million increase in marketing expenses aimed at supporting top-line demand, along with $2.7 million incurred for consultants assisting with the company's operational improvement initiatives.

Monro's operating loss for the quarter narrowed to $5.2 million, or negative 1.9% of sales, compared to an operating loss of $23.8 million in the prior-year period.

On an adjusted basis, which filters out one-time charges, the company recorded an adjusted operating loss of $2.6 million, down from an adjusted operating income of $1.4 million a year ago.

The company's final quarterly net loss narrowed to $6.6 million, or $0.23 per diluted share, representing a significant improvement from the net loss of $21.3 million, or $0.72 per diluted share, logged in the fourth quarter of fiscal 2025.

Adjusted diluted loss per share stood at $0.16 compared to $0.09 in the previous year's baseline.

Monro concluded its fiscal year operating 1,115 company-owned service centers and 47 franchised locations.