The company’s preliminary estimate of sales for the fourth quarter of the fiscal year is approximately $286.1 million, a decrease of 0.4% compared to $287.2 million in the prior-year quarter, driven by a comparable store sales decrease of approximately 9.5%, offset by sales from new stores.
The decline in comparable store sales, based on the company’s preliminary estimate, was largely driven by a substantial decrease in traffic since mid-March as government authorities took actions to curb the COVID-19 outbreak. Mild weather in the company’s northern markets during January and February also negatively impacted comparable store sales during the quarter, the company says.
Monro exited the fourth quarter of fiscal 2020 with a comparable store sales decrease of approximately 45% during the last week of the quarter and expects the slowdown in traffic to continue to negatively impact its top line performance in the first quarter of fiscal 2021, as authorities have announced expanded measures to prevent the further spread of COVID-19. Due to the decline in sales for the fourth quarter of fiscal 2020, the company now expects fiscal 2020 diluted earnings per share to be well below the low end of its previously issued guidance range of $2.25 to $2.35, which did not include the impact of COVID-19.
“First and foremost, Monro is focused on the safety and well-being of our teammates, customers and the communities that we serve during this critical period,” Brett Ponton, president and chief executive officer, said. “As our stores remain open to provide essential services during the COVID-19 pandemic, we are focused on the areas of our business within our control, including aligning labor with demand, reinforcing disciplined cost management protocols and leveraging our diversified supply chain. While COVID-19 significantly impacted our fourth-quarter financial results and continues to impact our store operations, we believe our ample liquidity and solid balance sheet position us well to navigate this challenging environment.”
The company says it has also taken precautionary steps to further mitigate near-term headwinds and strengthen its cash position, including:
- drawing down the remaining $350 million from its revolving credit facility;
- deferring non-critical capital expenditures including store reimage;
- reducing store hours and store labor to match demand;
- reducing selling, general and administrative expenses; and
- bolstering its working capital position.