Monro, Inc. (NASDAQ:MNRO) Q1 2024 Earnings Conference Call July 26, 2023 8:30 AM ET

Company Participants

Felix Veksler – Senior Director-Investor Relations

Michael Broderick – President and Chief Executive Officer

Brian D’Ambrosia – Executive Vice President and Chief Financial Officer

Conference Call Participants

Brian Nagel – Oppenheimer

Daniel Imbro – Stephens

Bret Jordan – Jefferies

Operator

Good morning, ladies and gentlemen, and welcome to Monro Inc.’s Earnings Conference Call for the First Quarter of Fiscal 2024. [Operator Instructions] And as a reminder, this conference call is being recorded and may not be reproduced in whole or in part without permission from the company.

I’d now like to introduce Felix Veksler, Senior Director of Investor Relations at Monro. Please go ahead.

Felix Veksler

Thank you. Hello, everyone, and thank you for joining us on this morning’s call.

Before we get started, please note that as part of this call, we will be referencing a presentation that is available on the Investors section of our website at corporate.monro.com/investors.

If I could draw your attention to the Safe Harbor statement on Slide 2, I’d like to remind participants that our presentation includes some forward-looking statements about Monro’s future performance. Actual results may differ materially from those suggested by our comments today. The most significant factors that could affect future results are outlined in Monro’s filings with the SEC and in our earnings release. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additionally, on today’s call, management’s statements include a discussion of certain non-GAAP financial measures, which are intended to supplement and not be substitutes for comparable GAAP measures. Reconciliations of such supplemental information to the comparable GAAP measures will be included as part of today’s presentation and in our earnings release.

With that, I’d like to turn the call over to Monro’s President and Chief Executive Officer, Michael Broderick.

Michael Broderick

Thank you, Felix. And good morning, everyone. I would like to start off by acknowledging that our first quarter results fell short of the expectations that we set on our last earnings call in May. I’ll spend the first part of our call this morning, walking through the shortfall, which was primarily driven by lower-than-expected sales due to customer deferrals and our higher-margin service categories in June.

Broad-based inflationary pressures have persisted such that the consumers slowed their purchases of some of our higher ticket service categories. As a result of this, we took swift action to reduce nonproductive labor costs, including overtime hours in our stores, which allowed us to preserve margins and profitability on lower-than-expected sales.