Monro, Inc. Reports Decline in Sales but Increase in Net Income for Q3 Fiscal 2026

Monro, Inc. reported a decline in financial performance for the third quarter of fiscal 2026, with total sales of $293.4 million, down 4.0% from $305.8 million in the same period last year. The company's net income increased to $11.1 million, compared to $4.6 million in the prior year, resulting in diluted earnings per share of $0.35, a significant increase from $0.15. The gross profit margin improved slightly to 34.9%, up from 34.3% in the previous year, despite a decrease in overall sales. The company attributed the sales decline primarily to the closure of underperforming stores, which was partially offset by a 1.2% increase in comparable store sales.

In terms of operational changes, Monro executed a Store Closure Plan, resulting in the closure of 145 underperforming stores, which contributed to a net gain of $21.1 million from the sale of assets related to these closures. The company also reported a decrease in operating, selling, general, and administrative expenses by 11.6% to $83.8 million, largely due to reduced store closing costs and gains from the sale of closed stores. The total number of company-operated retail stores decreased to 1,115 as of December 27, 2025, down from 1,263 a year earlier.

Monro's balance sheet showed total assets of $1.57 billion, a decrease from $1.64 billion at the end of the previous fiscal period. Current liabilities also decreased to $503.3 million from $524.3 million, while total liabilities stood at $965.0 million. The company maintained a working capital deficit of $274.5 million, which increased from $246.9 million, primarily due to extended payment terms negotiated with suppliers. Cash and equivalents at the end of the period were $4.9 million, down from $20.8 million at the end of the previous quarter.

Looking ahead, Monro expects to continue generating positive operating cash flow and plans to allocate capital towards growth initiatives, including potential acquisitions and store openings. The company has set a capital expenditure budget of $25 million to $35 million for fiscal 2026. Additionally, Monro declared dividends of $0.28 per share for both the three and nine months ended December 27, 2025, consistent with the previous year. The company remains committed to improving its financial performance through strategic operational changes and cost management initiatives.