Monro Swings to a Loss as Sales Fall 1.8%

The Tip Desk · November 10, 2026 · 4 min read

Second-quarter sales were $283.6 million and diluted loss was $.05 a share, versus $.18 of earnings a year earlier.

Monro, Inc. (MNRO), a leading provider of automotive repair and tire services, reported a net loss of $1.6 million, or $.05 a share, for the second quarter ended September 26, 2026, compared with net income of $5.7 million, or $.18 a share, a year earlier.

Sales fell 1.8% to $283.6 million from $288.9 million in the second quarter of fiscal 2026. The company said the decline was entirely driven by a 1.8% drop in comparable store sales from continuing locations. That comparable-store decline followed a 1.7% comparable-store drop in the first quarter of fiscal 2027, when total sales fell 4.6% after a $9.0 million reduction from the closure of 145 underperforming stores.

President and Chief Executive Officer Peter Fitzsimmons said the 1.8% comparable-store decline reflected lower store traffic, consumers deferring higher-ticket spending and trading down to lower-cost alternatives in tires, and the company’s use of self-funded promotions to drive unit growth in brakes.

Comparable store sales increased 8% for batteries and 3% for maintenance services versus the year-ago period. In the first quarter, batteries had also risen 8%, while maintenance services comparable sales had fallen 5%. Tires and brakes comparable store sales fell 4% in the second quarter, after a 1% decline in the first quarter. Alignments fell 2%, after a 1% increase in the first quarter. Front/end shocks fell 5%.

Gross margin decreased 50 basis points from the year-ago quarter, matching the 50-basis-point year-over-year decline in the first quarter of fiscal 2027. The company said the second-quarter compression came primarily from higher occupancy costs as a percentage of sales, partially offset by lower material costs as a percentage of sales.

Total operating expenses were $97.4 million, or 34.3% of sales, compared with $90.4 million, or 31.3% of sales, a year earlier. The company attributed the increase primarily to a $6.1 million rise in store closing costs, net of gains (losses) on sales of closed stores, $3.4 million of higher costs at continuing locations, primarily front shop labor, $3.2 million of higher marketing costs, $1.7 million of higher litigation reserve costs, and $0.3 million of higher costs related to shareholder matters. Those items were partially offset by $7.1 million of lower costs related to consultants on the operational improvement plan, $0.4 million of lower back-office transition costs, and $0.2 million of lower costs from the 145-store closure.

Operating income was $2.6 million, or 0.9% of sales, compared with $12.8 million, or 4.4% of sales, a year earlier. Adjusted operating income, a non-GAAP measure, was $4.4 million, or 1.6% of sales, versus $14.0 million, or 4.8% of sales. Interest expense was $4.7 million, compared with $4.4 million, principally due to higher weighted average debt. The company recorded an income tax benefit of $0.3 million, or an effective tax rate of 17.0%, compared with tax expense of $2.8 million, or a 32.9% rate, a year earlier. Adjusted diluted loss was $.01 a share, versus adjusted diluted earnings of $.21 a share.

Fitzsimmons said the ConfiDrive courtesy inspection process helped drive average repair order growth and was a key contributor to the gains in batteries and maintenance services. He said the District Manager Toolkit is deployed across a majority of the store network and that an operating efficiency team is coaching in the field, with early bottom-line improvement in a subset of locations. He said the company maintained marketing investment even as sales fell short of where it wanted them to be.

Monro closed one store in the second quarter and ended the period with 1,114 company-operated stores and 47 franchised locations. On September 8, 2026, it paid a cash dividend of $.28 a share.

On October 23, 2026, the company entered a new credit agreement with Ares Capital Corporation for $375.0 million in senior secured facilities, consisting of a $250.0 million term loan and a $125.0 million revolving credit facility, both maturing October 23, 2030. The facilities replaced the credit facility in place since April 2019. The company said it substantially paid down its supply-chain financing program and will no longer accept new supplier obligations into that program after December 31, 2026. As of October 24, 2026, it had $27.3 million of cash and equivalents and $60.0 million available under the new facilities.

Monro is not providing fiscal 2027 financial guidance at this time but said it will provide perspective on its expectations during its earnings conference call.