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How Did Monro Muffler Brake Perform in 4Q16?

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Price movement

Monro Muffler Brake (MNRO) has a market cap of $2.0 billion. It fell by 7.3% and closed at $62.07 per share on May 19, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -11.7%, -9.4%, and -6.1%, respectively, as of the same day. This means that Monro Muffler Brake is trading 10.9% below its 20-day moving average, 10.7% below its 50-day moving average, and 8.5% below its 200-day moving average.

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Related ETFs and peers

The Vanguard Small-Cap ETF (VB) invests 0.07% of its holdings in Monro Muffler Brake. VB tracks the CRSP US Small Cap Index. The market-cap-weighted index includes the bottom 2%–15% of the investable universe. VB’s YTD price movement was -0.15% as of May 19, 2016.

The iShares Russell 2000 Growth ETF (IWO) invests 0.28% of its holdings in Monro Muffler Brake. IWO tracks a market-cap-weighted index of US small-cap growth stocks. The index selects from stocks ranked 1,001–3,000 by market cap based on two growth factors.

The market caps of Monro Muffler Brake’s competitors are as follows:

  • Genuine Parts Company (GPC) – $14.1 billion
  • Advance Auto Parts (AAP) – $10.9 billion
  • LKQ Corporation (LKQ) – $9.9 billion

Performance in 4Q16 and 2016

Monro Muffler Brake reported fiscal 4Q16 sales of $229.0 million—a rise of 4.5% compared to sales of $219.1 million in fiscal 4Q15. The company’s cost of sales as a percentage of sales fell by 3.2% and its operating income rose to 12.6% in fiscal 4Q16—compared to the same period last year.

Its net income and EPS (earnings per share) rose to $13.9 million and $0.42, respectively, in fiscal 4Q16—compared to $12.6 million and $0.38, respectively, in fiscal 4Q15.

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Fiscal 2016 results

In fiscal 2016, Monro Muffler Brake reported sales of $943.7 million—a rise of 5.5% YoY (year-over-year). Its net income and EPS rose to $66.8 million and $2.00, respectively, in fiscal 2016—compared to $61.8 million and $1.88, respectively, in fiscal 2015.

Monro Muffler Brake’s cash rose by 3.3% and its inventories fell by 0.53% in fiscal 2016. Its current ratio and debt-to-equity ratio fell to 1.01x and 0.86x, respectively, in fiscal 2016—compared to 1.04x and 0.92x, respectively, in fiscal 2015.

Quarterly dividend

Monro Muffler Brake declared a quarterly dividend of $0.17 per share on its common stock. The dividend will be paid on June 13, 2016, to shareholders of record at the close of business on June 3, 2016.

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Acquisition

Monro Muffler Brake completed the acquisition of 29 McGee Auto Service and Tires retail and commercial stores in Florida. This acquisition will add ~$50 million in annualized sales.

Projections

The company made the following projections for fiscal 2017 and fiscal 1Q17:

Fiscal 2017

  • It expects sales of $980 million–$1.0 billion based on current visibility, business and economic trends, and completed acquisitions. This guidance includes a comparable store sales fall of 2% to flat.
  • It expects EPS of $2.05 to $2.20.

Fiscal 1Q17

  • It expects sales of $230 million–$240 million.
  • It expects EPS of $0.47–$0.51.

In the next part, we’ll look at Fiat Chrysler Automobiles (FCAU).

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