Monro reported lower sales and a sharp decline in profit for its fiscal second quarter, ended Sept. 26, 2026. The auto-repair and tire-services company attributed the sales drop to weaker traffic and customers delaying larger purchases or choosing less expensive options, while higher operating costs further pressured earnings.
Sales fell 1.8% to $283.6 million. Monro posted a net loss of $1.6 million, compared with net income of $5.7 million a year earlier.
Key details
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Comparable sales declined across the business, with a few areas of growth. Same-store sales at continuing locations fell 1.8%. Batteries rose 8% and maintenance services increased 3%, while sales declined 2% for alignments, 4% for tires and brakes, and 5% for front-end shocks.
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Gross margin narrowed. Gross margin was down 50 basis points from a year earlier, mainly because occupancy costs were higher relative to sales. Lower material costs partly offset the pressure.
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Operating expenses rose despite lower sales. Expenses totaled $97.4 million, or 34.3% of sales, versus $90.4 million, or 31.3%, a year earlier. The largest increases included $6.1 million in net store-closing costs, $3.4 million in costs at continuing locations—primarily front-shop labor—and $3.2 million in marketing. Higher litigation reserves also added $1.7 million. These increases were partly offset by $7.1 million less spending on consultants for the operational improvement plan, as well as smaller reductions in transition and prior store-closure costs.
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Operating income fell to $2.6 million from $12.8 million. Adjusted operating income, which excludes certain items, was $4.4 million, down from $14.0 million. As a share of sales, adjusted operating income declined to 1.6% from 4.8%.
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The bottom line moved into a loss. Diluted loss per share was 5 cents, compared with earnings of 18 cents a year earlier. On an adjusted basis, Monro reported a 1-cent-per-share loss, versus adjusted earnings of 21 cents. Interest expense rose to $4.7 million from $4.4 million, mainly because average debt was higher.
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Six-month sales were also lower. For the first half of fiscal 2027, sales fell 3.3% to $570.8 million from $589.9 million a year earlier.
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The store base changed little during the quarter. Monro closed one store and ended the period with 1,114 company-operated stores and 47 franchised locations.
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Management pointed to both consumer pressure and execution efforts. CEO Peter Fitzsimmons said lower traffic, delayed higher-cost repairs, customers trading down on tires and promotions to drive brake sales weighed on comparable sales. He also said Monro’s courtesy vehicle-inspection process helped lift average repair orders and contributed to growth in batteries and maintenance. A district-manager toolkit had been deployed across a majority of stores, and a new operating-efficiency team was coaching and training locations; the company said it was seeing early improvement in a subset of stores.
Plain-English implications
The quarter shows pressure on both sales and profitability: comparable sales slipped, operating costs took a larger share of revenue, and adjusted operating income fell substantially. Battery and maintenance growth, along with early improvements in some locations, offered areas of strength, but they did not offset weakness in other categories and higher expenses during the quarter.