Monro Reports Q3 2026 Earnings with Mixed Results
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Source: seekingalpha
- Earnings Beat: Monro's Q3 2026 Non-GAAP EPS of $0.16 exceeded expectations by $0.02, indicating resilience in profitability despite challenging market conditions.
- Revenue Decline: The company reported revenue of $293.4 million, a 4.0% year-over-year decrease, missing market expectations by $1.79 million, which highlights ongoing sales pressures affecting overall performance.
- Comparable Sales Growth: Comparable store sales increased by 1.2% in the third quarter, suggesting improved sales performance at existing locations, which may contribute positively to future revenue recovery.
- Cash Flow and Credit Position: As of December 27, 2025, Monro generated operating cash flow of $48 million, with $424.9 million available under its credit facility and $4.9 million in cash, reflecting strong liquidity management amid operational challenges.
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Analyst Views on MNRO
Wall Street analysts forecast MNRO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MNRO is 20.00 USD with a low forecast of 20.00 USD and a high forecast of 20.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
1 Analyst Rating
0 Buy
1 Hold
0 Sell
Hold
Current: 18.990
Low
20.00
Averages
20.00
High
20.00
Current: 18.990
Low
20.00
Averages
20.00
High
20.00
About MNRO
Monro, Inc. is an operator of retail tire and automotive repair stores in the United States. The Company offers replacement tires and tire-related services, automotive undercar repair services, and a range of routine maintenance services, primarily on passenger cars, light trucks, and vans. It also provides other products and services for brakes, mufflers and exhaust systems, and steering, drive train, suspension, and wheel alignment. Its retail tire and automotive repair stores operate primarily under the brands Monro Auto Service and Tire Centers, Tire Choice Auto Service Centers, Mr. Tire Auto Service Centers, Car-X Tire & Auto, Tire Warehouse Tires for Less, Ken Towery’s Tire & Auto Care, Mountain View Tire & Auto Service, and Tire Barn Warehouse. It services bus companies, construction equipment, dry vans, farmers, forestry, home builders trucks, intermodal, landscapers, logistics, long-haul truckers, mining companies, municipal and DPW vehicles, racetracks, and quarries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Monro Reports Q3 Results: Sales Decline but Profit Growth
- Sales Performance Review: Monro's Q3 sales totaled $293.4 million, a 4% decline year-over-year primarily due to the closure of 145 underperforming stores, although comparable store sales increased by 1.2%, indicating resilience in continuing locations.
- Gross Margin Improvement: The gross margin expanded by 60 basis points year-over-year to 34.9% in Q3, driven by lower material costs and reduced occupancy costs as a percentage of sales, despite rising technician labor costs due to inflation, reflecting effective cost management.
- Operating Expense Optimization: Total operating expenses for Q3 were $83.8 million, or 28.6% of sales, significantly down from 31% in the prior year, primarily due to cost savings from closed stores and net gains from real estate dispositions, enhancing the company's financial flexibility.
- Net Income Growth: Net income for Q3 reached $11.1 million, a 143.1% increase from $4.6 million in the same period last year, with diluted earnings per share at $0.35, demonstrating a significant improvement in profitability amidst challenges.
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Monro, Inc. Q3 2026 Earnings Call Highlights
- Sales Performance Overview: Monro, Inc. reported Q3 sales of $293.4 million, a 4% decline primarily due to the closure of 145 underperforming stores, yet a 1.2% increase in comparable store sales indicates business resilience.
- Gross Margin Improvement: The company achieved a 60 basis point year-over-year increase in gross margin to 34.9%, driven by lower material costs and optimized operating expenses, demonstrating effective cost control measures.
- Real Estate Disposition Progress: During the quarter, Monro exited 32 leases and sold 20 owned locations, generating proceeds of $17.3 million, with cumulative proceeds reaching $22.8 million, expected to support future cash flow.
- Digital Marketing Expansion: The company expanded its multichannel digital media plan to over 340 additional stores and added call center support to 114 more locations, enhancing customer experience and sales effectiveness, further boosting brand impact.
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