Monro Muffler Brake Inc (MNRO) has reported a 30.51 percent plunge in profit for the quarter ended Mar. 25, 2017. The company has earned $9.66 million, or $0.29 a share in the quarter, compared with $13.90 million, or $0.42 a share for the same period last year. Revenue during the quarter grew 10.03 percent to $252.01 million from $229.03 million in the previous year period. Gross margin for the quarter contracted 313 basis points over the previous year period to 36.99 percent. Total expenses were 92.03 percent of quarterly revenues, up from 88.45 percent for the same period last year. That has resulted in a contraction of 358 basis points in operating margin to 7.97 percent.
Operating income for the quarter was $20.09 million, compared with $26.46 million in the previous year period.
John Van Heel, president and chief executive officer stated, “The combination of unseasonable weather and a difficult consumer spending environment resulted in a decline in our comparable store sales, which reduced our profits for the fourth quarter and the full fiscal year. As we enter the first quarter of fiscal 2018, our comparable store sales have improved and are up quarter-to-date, led by higher average ticket. Comparable store sales for fiscal April increased approximately 3% and are up approximately 2% month-to-date in fiscal May. Thus far in the first quarter, on a comparable store basis, we are also realizing higher margins in both our tire and service categories.”
For the first-quarter, Monro Muffler Brake projects revenue to be in the range of $270 million to $275 million. Monro Muffler Brake projects revenue to be in the range of $1,125 million to $1,155 million for financial year 2017. The company forecasts diluted earnings per share to be in the range of $0.52 to $0.56 for the first-quarter. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $2.10 to $2.30.
Working capital increases sharply
Monro Muffler Brake Inc has recorded an increase in the working capital over the last year. It stood at $13.34 million as at Mar. 25, 2017, up 432.63 percent or $10.83 million from $2.50 million on Mar. 26, 2016. Current ratio was at 1.07 as on Mar. 25, 2017, up from 1.01 on Mar. 26, 2016.
Debt increases substantially
Monro Muffler Brake Inc has witnessed an increase in total debt over the last one year. It stood at $395.50 million as on Mar. 25, 2017, up 47 percent or $126.46 million from $269.04 million on Mar. 26, 2016. Monro Muffler Brake has witnessed an increase in long-term debt over the last one year. It stood at $395.50 million as on Mar. 25, 2017, up 47 percent or $126.46 million from $269.04 million on Mar. 26, 2016. Total debt was 33.37 percent of total assets as on Mar. 25, 2017, compared with 26.92 percent on Mar. 26, 2016. Debt to equity ratio was at 0.68 as on Mar. 25, 2017, up from 0.50 as on Mar. 26, 2016. Interest coverage ratio deteriorated to 3.63 for the quarter from 5.83 for the same period last year.
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