For the fiscal third quarter ended Dec. 27, 2025, Monro Inc. saw its net income rise from $4.58 million to $11.14 million on a year-over-year basis. But, on an adjusted basis, the company’s net income declined 13.2% to $5.03 million.
Gross profit decreased 2.3% to $102.37 million. However, gross margin grew from 34.3% to 34.9% year over year as material costs and occupancy costs decreased, offset by higher technician labor costs, primarily attributable to wage inflation.
Sales declined 4.0% to $293.39 million, attributable to shops that have been closed (the company closed 145 underperforming shops earlier in the year), partially offset by higher comparable-store sales (more on this later).
A closer look at Monro’s topline results shows that …
• Tires revenue decreased 0.8% to $150.17 million.
• Maintenance revenue decreased 8.2% to $73.47 million.
• Brakes revenue decreased 6.7% to $35.11 million.
• Steering revenue decreased 2.9% to $24.89 million.
• Batteries revenue decreased 11.9% to $6.16 million.
• Exhaust revenue decreased 12.6% to $3.22 million.
• Franchise royalties revenue increased 10.9% to $377,000.
It should be noted that tires revenue includes the sale of road hazard warranty agreements as well as tire delivery commissions. Additionally, the steering product category includes front end/shocks along with alignment product category sales.
Comp-store sales increased 1.2% for the quarter. This breaks down, by product category, as …
• Front end/shocks up roughly 7% with a two-year stack of +13%.
• Tires up 5%, with a two-year stack of +4%.
• Brakes down 1%, with a two-year stack of -7%.
• Maintenance service down 2%, with a two-year stack of -4%.
• Alignment down 13%, with a two-year stack of 0%.
• Batteries down 16%, with a two-year stack of +14%.
Traffic was down mid-single digits, but average ticket was up mid-single digits. And, in terms of sales cadence, Monro’s comps were down approximately 2% in October, up 4% in November and up 1% in December.
“When adjusting for a shift in the timing of the Christmas holiday in the prior year, the months of November and December — as well as the third quarter — marked the first time we delivered positive comps on a two-year stack in over two years,” President and CEO Peter Fitzsimmons pointed out during Monro’s Jan. 28 earnings call. “This has also enabled us to report our fourth consecutive quarter of positive comps for the first time in several years.”
Brian D’Ambrosia — executive vice president of finance, CFO and treasurer — noted that, while tire units were down 1%, management believes Monro outperformed the industry in the quarter.
Fitzsimmons said: “We believe we were able to take share in our tire category as soon as winter hit, as our stores were well-prepared with proper staffing, an updated tire assortment and additional marketing spend.”
ACQUISITION & ACTIVATION … “During the third quarter, we continued to advance our acquisition marketing efforts through the expansion of a multichannel digital media plan to target high-value potential audiences. We expanded marketing to more than 340 additional store locations in the third quarter, while maintaining a disciplined phase rollout to ensure appropriate returns,” Fitzsimmons told analysts on the call. “We also completed an operational readiness assessment to determine which stores were best positioned to receive marketing support.”
Additionally, Monro has added call center support to 114 additional locations and now has more than 830 shops benefiting from the customer call center. “We expect to add the remainder of our stores in the near future,” Fitzsimmons said.
STAFFING … Earlier in 2025, the company completed a field realignment designed to ‘right size’ and streamline its field management following the aforementioned shop closures. “While this resulted in an overall reduction of district managers, it has also resulted in an overall increase in the quality of district managers across the chain,” Fitzsimmons said.
“Our streamlined and agile field organization enables us to communicate faster within our field network, which has improved our ability to serve guests more quickly and more effectively,” he told analysts. “Further, we’ve created and implemented useful analytical tools, such as the district manager toolkit as well as a labor force optimization capability, that enables our field leaders to better develop our store-based teammates.”
Also, Monro has invested in a team of field compliance support specialists, whose work allows the company to reduce the volume of certain administrative tasks previously handled by district managers. “This allows our field leadership to focus more of their time on training and coaching our store teams,” Fitzsimmons said.
MERCHANDISING & TARIFFS … On the call, Fitzsimmons discussed vendor and assortment issues. “In our tire category, we focused heavily on ensuring inventory availability to present a well-developed product assortment to our guests during the fall and early winter selling season,” he said. “As the weather changed, we leveraged our strong supplier and distributor relationships to expand availability where needed to deliver the right products to our customers in each of our tire tiers.
“As we approach midwinter, we’re refining our tire assortment for the next selling season, with an emphasis on achieving our objective to narrow our overall tire assortment to better serve customer needs.”
Meanwhile, Fitzsimmons said the company is working to carefully manage tariff impact on Monro’s overall product acquisition cost and on its market pricing.
“So far … tariffs have not been as significant on either our customer pricing or our product cost as we anticipated when higher tariffs were first announced,” he stated. “Generally, we’ve been able to strike the right balance between costs and price adjustments, which has enabled us to maintain solid gross margins in an uncertain economic environment. We believe this positions us well moving forward.”
MISCELLANEOUS … Other items of interest from Monro’s quarterly report and earnings call …
• At quarter’s end, Monro had 1,115 company-operated shops across 32 states as well as 47 Car-X franchised locations.
• During the quarter, the company sold 20 owned stores and related equipment, assigned 17 leases to third parties, and early-terminated 15 leases.
• Fitzsimmons told analysts that the sales momentum from the quarter has continued into fiscal January, with preliminary comp-store sales up almost 1%.
• “Looking forward, and coupled with our increased marketing spend, we believe higher than expected consumer tax refunds should provide a tailwind to topline trends for the remainder of fiscal ’26,” Fitzsimmons said. “We continue to expect to deliver positive comp-store sales for the full fiscal year.” — Reporting by Marc Vincent, Editor
