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Monro Muffler Brake Readying to Present Its Best Ideas

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Price movement

Monro Muffler Brake (MNRO) rose 1.4% to close at $57.27 per share during the first week of September 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 2.7%, 0.83%, and -12.8%, respectively, as of September 9. MNRO is trading 0.73% above its 20-day moving average, 5.9% below its 50-day moving average, and 12.0% 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 MNRO. The ETF tracks the CRSP US Small Cap Index. The market-cap-weighted index includes the bottom 2%–15% of the investable universe. The YTD price movement of VB was 9.1% on September 9.

The iShares Russell 2000 Growth ETF (IWO) invests 0.26% of its holdings in MNRO. The ETF tracks a market-cap-weighted index of US small-cap growth stocks. The index selects from stocks with market caps ranked 1,001–3,000 based on two growth factors. The market caps of MNRO’s competitors are as follows:

  • Genuine Parts (GPC) — $14.4 billion
  • Advance Auto Parts (AAP) — $11.3 billion
  • LKQ (LKQ) — $10.7 billion

Latest news on MNRO

In a press release on September 6, 2016, MNRO “announced that John Van Heel, President and Chief Executive Officer, will present at CL King’s 14th Annual Best Ideas Conference in New York City, New York. The Company’s presentation will take place on Tuesday September 13, 2016 at 11:45 a.m. ET.”

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Performance of Monro Muffler Brake in fiscal 1Q17

Monro Muffler Brake reported fiscal 1Q17 sales of $236.9 million, a rise of 0.17% over its sales of $236.5 million in fiscal 1Q16. The company’s gross profit margin and operating income fell 1.8% and 6.8%, respectively, between fiscal 1Q16 and fiscal 1Q17.

Its net income and EPS (earnings per share) fell to $16.8 million and $0.50, respectively, in fiscal 1Q17, compared with $18.8 million and $0.57 in fiscal 1Q16. MNRO’s cash fell 40.8% and its inventories rose 4.8% between fiscal 4Q16 and fiscal 1Q17. It had a current ratio and a debt-to-equity ratio of 1.1x and 0.92x, respectively, in fiscal 1Q17, compared with 1.0x and 0.86x in fiscal 4Q16.

During fiscal 1Q17, it acquired 20 McGee Auto Service and Tires retail and commercial stores in Florida to expand its market share. It expects the acquisitions to contribute ~$90 million in sales in fiscal 2017.

Projection

The company has made the following projections for fiscal 2017:

  • sales in the range of $1 billion–$1.03 billion based on current visibility, business and economic trends, and completed acquisitions (including comparable store sales between 0% and -2%)
  • EPS in the range of $2.05–$2.20, including $0.14 to $0.16 from recent acquisitions

The company has made the following projections for fiscal 2Q17:

  • sales in the range of $245 million–$255 million
  • EPS in the range of $0.53–$0.58

Next, we’ll look at Mattel (MAT).

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