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DATE
Wednesday, May 28, 2025 at 8:30 a.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Peter Fitzsimmons
Executive Vice President and Chief Financial Officer — Brian D'Ambrosia
Treasurer and Investor Relations Contact — Felix Veksler
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RISKS
Gross margin is expected to remain pressured throughout FY2026 due to material cost increases, customer trade-down to lower-margin tire offerings, increased self-funded promotions, and wage inflation, with further headwinds anticipated from potential tariff impacts.
Total operating expenses rose to $121.1 million, or 41.1% of sales, driven principally by $20.9 million in store impairment costs, resulting in an operating loss of $23.8 million, compared to operating income in Q4 FY2024.
The store optimization plan is projected to reduce total sales by approximately $45 million in FY2026 as 145 underperforming stores are closed, although some sales may be recaptured nearby.
Store closure costs of approximately $10 million to $15 million are expected, primarily during Q1 FY2026, predominantly impacting the first quarter of the next fiscal year.
TAKEAWAYS
Sales: $295 million, down 4.9%, primarily due to six fewer selling days, reducing sales by $18.9 million.
Comparable Store Sales: Increased 2.8% adjusted for days, but declined 3.6% unadjusted for days in the fourth quarter comps ranged from down 2% in January to up 8% in March.
Tire Units: Up mid-single digits, with unit growth exceeding 10% in March; share gains in higher-margin tire tiers were noted.
Gross Margin: Decreased by 250 basis points year-over-year, primarily due to value-oriented consumer trade-down in tires, increased self-funded promotions, and higher technician wage inflation.
Operating Loss: Reported operating loss was $23.8 million (negative 8.1% of sales). influenced by $20.9 million in store impairment costs; Last year showed an operating income of $10.3 million for Q4 FY2024.
Net Loss: $21.3 million net loss (GAAP), versus net income of $3.7 million in the same period last year.
Diluted Loss Per Share: $0.72 GAAP; adjusted diluted loss per share (non-GAAP) of $0.09, compared with prior-year adjusted diluted earnings per share (non-GAAP) of $0.21.
Cash From Operations: $132 million generated during FY2025, aided by $43 million in working capital reductions.
AP to Inventory Ratio: Ended the period at 177%, up from 164% at the end of FY2024.
Divestitures and Capital Use: $12 million received from divestitures and $9 million from headquarters sale; capital expenditures were $26 million, and dividends distributed totaled $35 million.
Net Bank Debt and Liquidity: Net bank debt stood at $40 million, with available credit facility of ~$509 million and cash/equivalents of $21 million at quarter-end.
Store Closures: Plan to close 145 underperforming stores, representing approximately 5% of total sales, with targeted completion in Q1 of the next fiscal year.
Full-Year Outlook: Management expects improvement in adjusted diluted earnings per share in FY2026, driven by the performance plan and operational efficiencies, though no formal guidance was issued due to tariff uncertainty.
Preliminary Q1 Sales Trend: Quarter-to-date comparable store sales are up approximately 7% in the first eight weeks of Q1 FY2026.
Capex Guidance: Capital expenditures for FY2026 are expected to be between $25 million and $35 million.
Tariff Impact: Tariffs are anticipated to increase costs across major product categories, and pricing actions for customers are under consideration to offset this effect.
Customer Insights: Management’s analysis highlights that Monro’s highest-value customers deliver 25 times more profit than its lowest-value tier, leading to reallocation of marketing spending toward more profitable segments.
SUMMARY
Monro, Inc. (MNRO) is closing 145 underperforming stores in the first quarter of the upcoming fiscal year, which is expected to meaningfully improve profitability but is expected to reduce annual sales by about $45 million in FY2026. Management did not provide formal earnings guidance due to uncertainty around tariffs but expressed confidence in achieving year-over-year improvement in adjusted diluted earnings per share (non-GAAP) in FY2026 through operational efficiencies and a targeted performance improvement plan. Tariff-related cost inflation was explicitly cited as a risk to gross margin in FY2026, with the company mobilizing to negotiate with suppliers and potentially adjust prices for customers. Early results from focused marketing tests indicate encouraging progress in attracting higher-value, more profitable customers, with quarter-to-date same-store sales up approximately 7% in Q1 FY2026 as the new fiscal year begins. The company maintains significant liquidity, with net bank debt at $40 million and $509 million available under its credit facility at the end of Q4 FY2025, supporting continued investment and dividend priorities.
President Fitzsimmons said, "We are positioned as one of the leading players in a highly fragmented industry" and outlined four improvement focus areas: store closures, customer experience, acquisition and activation, and merchandising productivity.
Gross margin pressure was specifically attributed by D'Ambrosia to "higher material costs due to mix within tires from a value-oriented consumer that traded down more of their tire purchases to our tier three offerings, and an increased level of self-funded promotions."
An internal team is actively working on "fact-based negotiations with top suppliers to mitigate as much of that anticipated tariff as possible." management stated, while warning that price adjustments for consumers may be necessary if tariff increases persist.
The company expects to incur store closure costs in the range of $10 million to $15 million, primarily during Q1 FY2026, but confirmed that further large-scale closures beyond this phase are not currently anticipated.
INDUSTRY GLOSSARY
AP to Inventory Ratio: Accounts payable as a percentage of inventory; a liquidity measure indicating how much of inventory is financed through payables rather than cash or short-term debt.
Self-funded Promotions: Discounts or deals offered to customers that are subsidized directly by the company, impacting gross margin but not requiring vendor support.
Tire Tier: Classification of tire product lines by value or segment; Monro references tiers with "tier three" representing lower-margin, value-focused offerings.
Full Conference Call Transcript
Felix Veksler: Thank you. Hello, everyone, and thank you for joining us on this morning's call. Before we get started, please note that as part of this call, we will be referencing a presentation that is available on the investor section of our website at corporate.monro.com/investors. If I could draw your attention to the Safe Harbor statement on slide two, I'd like to remind participants that our presentation includes some forward-looking statements about Monro's future performance. Actual results may differ materially from those suggested by our comments today. The most significant factors that could affect future results are outlined in Monro's filings with the SEC and in our earnings release.
The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise except as required by law. Additionally, on today's call, management's statements included the discussion of certain non-GAAP financial measures, which are intended to supplement and not be substitutes for comparable GAAP measures. Reconciliations of such supplemental information to the comparable GAAP measures will be included as part of today's presentation and in our earnings release.
Lastly, unless otherwise noted, all references to comparable store sales, category sales, and units on today's call will be made on an adjusted for days basis, which adjusts for six fewer selling days in the current year quarter due to an extra week of sales in fiscal 2024 and a shift in the timing of Christmas holiday from the fourth quarter in fiscal 2024 to the third quarter in fiscal 2025. With that, I'd like to turn the call over to Monro's President and Chief Executive Officer, Peter Fitzsimmons.
Peter Fitzsimmons: Thank you, Felix. And thanks to everyone for joining us this morning. It's terrific to be part of the Monro team. As many of you already know, my primary objective is to work with the company's management team and board to develop and execute a performance improvement plan that will enhance Monro's operations, drive profitability, and increase operating income and total shareholder returns. I successfully led similar improvement plans at other companies, and I intend to leverage my extensive background and experience to do the same at Monro. I've now spent about eight weeks in Rochester at the company and have been fully immersed in our business.
I've spent a lot of time with the senior leadership and also engaging with our talented teammates in the field, as well as visiting many stores, both Monro stores and our competitors. This has only confirmed the positive view I had about Monro before I decided to join the company. Let's start with Monro's strengths. First, this business has shown impressive durability through business cycles. We are positioned as one of the leading players in a highly fragmented industry. Monro has significant scale that gives us important competitive advantages over smaller players in our industry.
We can leverage this scale in our financial position to make critical investments in our business, our people, and our technology to deliver an outstanding guest experience. Second, certain fundamentals in our industry remain strong. These fundamentals include continued growth of vehicles on the road, which now exceeds 280 million in the United States. Vehicle miles traveled have returned to pre-COVID levels. Importantly, the average vehicle life of cars on the road today is more than twelve and a half years. Further, an increase in the complexity of vehicles continues to drive a shift from do-it-yourself to do-it-for-me, with future technology advances expected to accelerate this shift.
Third, and finally, our business is a consistent cash generator with ample liquidity, a solid balance sheet, and low leverage. All of this, coupled with our compelling consumer offerings, gives us confidence that we can successfully execute on and accelerate the pace of the company's improvement plan as well as better capitalize on positive industry trends to unlock Monro's full potential. Now I'd like to share my initial assessment of the business, which highlights four key areas of focus that we've identified as opportunities for improvement and is shown on slide three of our presentation materials.
These include closing unprofitable stores, improving our customer experience and selling effectiveness, driving profitable customer acquisition and activation, and increasing merchandising productivity, which includes mitigating tariff risk. Let's start with closing unprofitable stores. In the past few weeks, we conducted a comprehensive store portfolio review that identified 145 underperforming stores to prioritize for closure.
Felix Veksler: Our review included an evaluation of store performance,
Peter Fitzsimmons: as well as market segmentation and demographic data specific to the geographic areas of each location. We are now setting into motion a process to close these locations during the first quarter of fiscal 2026. The closure of these stores will have a limited impact on our total sales but is expected to deliver meaningful improvement in profitability. The 145 stores generated approximately 5% of our total sales in fiscal 2025, and we're likely to recapture some of those sales in locations near the closing stores. Second, improving our customer experience and selling effectiveness.
Felix Veksler: We
Peter Fitzsimmons: reviewed stores across our portfolio, from low to high performers, to understand the store experience from both the customer and teammate perspective. Our analysis indicates that customers have had an uneven experience in our stores largely due to inconsistent teammate execution of core processes, including scheduling and appointments, communication, and quality of service. By breaking down the customer journey, we are developing an approach to address customer pain points that we believe will improve the customer experience and unlock value in our selling effectiveness. The company's Confy Drive digital courtesy and inspection, which you're all familiar with, will continue to be a key component of our in-store experience. We have many stores that serve our customers very well.
Unfortunately, we have others that don't always live up to customer expectations. Addressing this is a high priority item that we will be working hard to improve and with a high sense of urgency. Third,
Felix Veksler: we
Peter Fitzsimmons: are driving profitable customer acquisition and activation. As all of you are aware, Monro sales have declined sequentially for the past three fiscal years, driven largely by declines in store traffic. Our work indicates that recently there's also been a decline in the quality and retention of new customers. We believe this has been driven by suboptimal marketing, insufficient clarity on who Monro's target customers are, what these customers value, and how we fulfill their needs. Our analysis also uncovered that Monro's highest value customers deliver 25 times more profit than our lowest tier of customers.
As a result, we are in the process of converting our market testing into a reallocation of marketing dollars aimed at higher value and more profitable customers. The early results from our tests are encouraging. We expect that our approach to improvement in this area will include additional tests which will touch such things as messaging, type of media, and promotional offers. We will then scale the tests that deliver the most value across all of our stores.
Felix Veksler: We
Peter Fitzsimmons: Fourth and finally, increasing merchandising productivity as well as mitigating tariff risk. The company has a broad tire assortment. Our work on the company's current merchandising shows that this broad assortment may not be aligned with what our customer really wants. We expect to narrow the breadth of our core tire assortment, which will simplify the in-store selling process for both our customers and our Monro teammates. Of course, we will continue to get any tire that a customer wants through our many distribution channels, but our core in-store offering will likely be simplified. This will allow us to lean into stronger strategic partnerships with important tire manufacturers.
In addition, we are reviewing our pricing and promotions across tires and services to ensure we deliver value to our customers while also achieving appropriate levels of profitability. A word about tariffs. No company today, especially in the automotive sector, can look at the current landscape without considering tariffs. While it is still an obviously uncertain environment, tariffs are expected to drive cost increases across almost all of our major product categories. We have mobilized an internal team for fact-based negotiations with top suppliers to mitigate as much of that anticipated tariff as possible. We expect that we may need to adjust prices to our consumers to counter the impact of tariff-related cost increases.
We are currently evaluating the full impact.
Felix Veksler: Now
Peter Fitzsimmons: To conclude, as I reflect on my first eight weeks at Monro, I think we've conducted a very detailed preliminary assessment of the business, and I believe the opportunities that we've uncovered and plans that we're putting into place will accelerate the pace of the company's performance improvement and unlock Monro's full potential. We don't expect to see improvement overnight, but I feel pretty confident that we will drive enhanced profitability and increase operating income along with total shareholder returns during fiscal 2026. Before I hand the call over to Brian, I'd like to thank our dedicated teammates for their commitment to our customers. Thanks also to our shareholders and our suppliers for their continued support.
And with that, I'll turn the call over to Brian.
Brian D'Ambrosia: Thank you, Peter, and good morning, everyone. Before I get into more specific details, I'd like to briefly touch upon just a few highlights from our fourth quarter performance. While our results are far from where we want them to be, we drove positive comparable store sales growth for the full quarter, sequential improvement in comp sales and gross margin as the months of the quarter progressed, comp sales and unit growth in our tire category and our high-margin service categories including front-end shocks, batteries, brakes, and maintenance service, and a year-over-year store traffic increase in March.
Our overall gross margin and profitability in the quarter was negatively impacted by extreme weather in the first half of the quarter, which resulted in temporary store closures and lower store traffic primarily in January. The second half of the quarter saw better operating profitability. Now turning to slide four for more specific details. Sales decreased 4.9% to $295 million in the fourth quarter, primarily driven by six fewer selling days compared to the fourth quarter of fiscal 2024, resulting in a sales decrease of $18.9 million. Comp store sales increased 2.8% and decreased 3.6% unadjusted for days.
For reference, comps were down 2% in January and rebounded to up 2% in February, and we exited the quarter up 8% in March. Tire units were up mid-single digits in the fourth quarter, driven by growth in units above 10% during the month of March. We also gained tire market share in our higher margin tiers in the quarter. Turning to slide five, gross margin decreased 250 basis points compared to the prior year, primarily resulting from higher material costs due to mix within tires from a value-oriented consumer that traded down more of their tire purchases to our tier three offerings, and an increased level of self-funded promotions.
Technician labor costs also increased as a percentage of sales, primarily due to wage inflation. Total operating expenses were $121.1 million or 41.1% of sales as compared to $99.7 million or 32.2% of sales in the prior year period. Importantly, the increase was principally due to an increase of $20.9 million in store impairment costs related to certain owned and leased assets. Operating loss for the fourth quarter was $23.8 million or negative 8.1% of sales and was negatively impacted by the store impairment costs just discussed. This is compared to operating income of $10.3 million or 3.3% of sales in the prior year period.
Net interest expense decreased to $4.4 million as compared to $5 million in the same period last year. This was principally due to a decrease in weighted average debt. Income tax benefit was $6.8 million or an effective tax rate of 24.3%, which is compared to income tax expense of $2 million or an effective tax rate of 35% in the prior year period. The year-over-year difference in effective tax rate is primarily related to an increase in valuation allowances as well as the impact from other adjustments, none of which are significant, on the change in pretax loss or income. Net loss was $21.3 million as compared to net income of $3.7 million in the same period last year.
Diluted loss per share was $0.72. This is compared to diluted earnings per share of $0.12 for the same period last year. Adjusted diluted loss per share, a non-GAAP measure, was $0.09. This is compared to adjusted diluted earnings per share of $0.21 in the fourth quarter of fiscal 2024. Please refer to our reconciliation of adjusted diluted EPS in this morning's earnings press release and on slide nine in the appendix to our earnings presentation for further details regarding excluded items in the fourth quarter of both fiscal years. As highlighted on slide six, we continue to maintain a strong financial position.
We generated $132 million of cash from operations, including $43 million of working capital reductions, during fiscal 2025. Our AP to inventory ratio improved to 177% at the end of fiscal 2025, versus 164% at the end of fiscal 2024. We received $12 million in divestiture proceeds as well as $9 million from the sale of our corporate headquarters. We invested $26 million in capital expenditures, spent $40 million in principal payments for financing leases, and distributed $35 million in dividends. At the end of the fourth quarter, we had net bank debt of $40 million, availability under our credit facility of approximately $509 million, and cash and cash equivalents of approximately $21 million.
Felix Veksler: Now
Brian D'Ambrosia: turning to our expectations for the full year of fiscal 2026 on slide seven. Given the uncertainties surrounding a fluid tariff situation, we are not providing guidance for fiscal 2026 at this time. However, we are providing the following assumptions to assist in your modeling. We expect to deliver year-over-year comparable store sales growth in fiscal 2026, primarily driven by the improvement plan that Peter discussed earlier, as well as any tariff-related price increases to our customers. Encouragingly, our sales momentum has continued into the first eight weeks of our fiscal first quarter with preliminary quarter-to-date comps up approximately 7%. We expect the results of our store optimization plan to reduce total sales by approximately $45 million in fiscal 2026.
Felix Veksler: We
Brian D'Ambrosia: Given expected baseline cost inflation, as well as our exposure to tariff-related cost increases, we expect that our gross margin for the full year of fiscal 2026 will continue to remain pressured, particularly as it relates to a tough gross margin comparison in the first quarter of the prior year period. We expect to partially offset some of this baseline cost inflation as well as some of the tariff-related cost increases with benefits from closing stores and operational improvements from our improvement plan. We believe this will allow us to deliver a year-over-year improvement in our adjusted diluted earnings per share in fiscal 2026.
As a result of our store portfolio optimization plan, we expect to incur store closure costs of approximately $10 million to $15 million, primarily during the first quarter of fiscal 2026.
Felix Veksler: We
Brian D'Ambrosia: We expect to generate sufficient operating cash flow that will allow us to maintain a strong financial position and to fund all of our capital allocation priorities, including our dividend during fiscal 2026. Regarding our capital expenditures, we expect to spend $25 million to $35 million. And with that, I will now turn the call back over to Peter for some closing remarks.
Peter Fitzsimmons: Thanks, Brian. We believe our business is durable, Monro has a solid balance sheet and cash flow profile, and the fundamentals of our industry are strong. We believe that we can capitalize on positive industry trends through the four key areas of our improvement plan to unlock Monro's full potential as we enhance operations, drive profitability, and increase operating income and total shareholder returns. With that, I will now turn it over to the operator for questions.
Operator: Thank you. We will now begin the question and answer session. And we do ask that you please limit yourself to one question and one or two follow-up questions. And if you did have any more, you will need to rejoin the queue.
Felix Veksler: And as a final reminder, that is star one to register for a question.
Operator: We have a question from Thomas Wendler with Stephens. Please go ahead.
Thomas Wendler: Hey. Good morning, everyone.
Brian D'Ambrosia: Good morning, Thomas. Hi, Tom. Nice
Peter Fitzsimmons: nice
Felix Veksler: nice comps this quarter. Lots of moving pieces here. I'm gonna
Thomas Wendler: kick things off, mate, with the gross margins. You're running some self-funded promotions. Are these the additional savings I see as an offering from the usage of the drive card? And then with these promotions and the wage inflation, is there any additional color you can provide as we're thinking about gross margins moving forward?
Brian D'Ambrosia: Thanks for the question, Tom. This is Brian. I'll take that. So the gross margin impact related to the self-funded promotions is really our tire promotions, and it includes some of the drive card promotions that you're seeing, but it also includes everyday offers on buy three get one brands, buy one, get one of other brands. These have been in place for a good portion of our FY25 and have been a consistent impact on year-over-year gross margins during the fiscal year. There's been no real change in the use of those self-funded promotions sequentially. But year-over-year, we do have more self-funded promotions running than we had in the prior year.
Related to gross margins going forward, as we said, we expect them to remain pressured primarily due to the baseline cost increases and potential tariff impacts. Those are gonna be, you know, offset somewhat by the impact of closing the 145 underperforming stores as well as some of the benefits of our improvement plan. But as a reminder, Q1 is a particularly tough gross margin comp, but we expect that the comp related to gross margin year-over-year will continue to be pressured.
Thomas Wendler: Perfect. I appreciate that. And then maybe shifting gears a bit to customer acquisition and the Monro experience. Can you provide any color on, like, who these higher value targets are and kinda what you're doing on the marketing front to convert them to customers? And then maybe some color on your approach towards the customer experience changes moving forward.
Felix Veksler: Sure. Thanks for that question. This is Peter.
Peter Fitzsimmons: One thing we've done in the last couple of months is look very closely at where we generate the most revenue and profit by customer. And it's very clear that what we're looking for are repeat customers who appreciate that we provide a range of services. When you look at a three-year period, you see, as we've suggested on this call, that there's dramatically higher sales and profitability for those customers.
Now I think one of the things that the Alex Partners team can bring to the table is a full understanding of the range of marketing and advertising that can undertake in order to meet the needs of those customers that have proven to be the best customers for us. And so what you're gonna see over the next couple of quarters is a reallocation of our marketing investment towards targeting new customers that fit the profile that we're really looking for. I'm pretty confident we're gonna be able to find a much better-targeted way of attracting incremental customer traffic. So we haven't completed all of the analysis.
This is something that takes a couple of months to fully understand, but it's very clear that there are customers in all of our markets that are preferred, and we're gonna chase them.
Thomas Wendler: Perfect. I appreciate you answering my questions.
Peter Fitzsimmons: Sure. Thank you for the questions.
Operator: Thank you. We now have David Lantz with Wells Fargo on the line. Please go ahead.
David Lantz: Hey, good morning, guys, and thanks for taking my questions.
Brian D'Ambrosia: Morning, David. Absolutely. Related to the gross margin 250 basis points
David Lantz: quarter over quarter from the prior year.
Brian D'Ambrosia: Hundred and sixty there was a hundred and sixty basis points of the 250 related to material costs. And that due to trade down within the tire category as well as the self-funded tire promotions we discussed earlier. About eighty basis points of technician labor costs primarily driven by year-over-year wage inflation. And then the balance is just a little bit of deleverage on the fixed occupancy cost given the loss of the extra week in the prior year.
David Lantz: Got it. That's helpful. And then you know, I understand that gross margins will be down or pressured for 2026. We're curious if you can help think through kind of the trajectory in a bit more detail. I recognize, you know, compares get a lot easier when you go through the year. So, you know, is it fair to assume that there could be some expansion later in the year, but still for the full year, there's pressure?
Felix Veksler: Yeah. I think that's right. I think as you think about gross margins,
Brian D'Ambrosia: this past year, it's been kind of a quarter over quarter to kind sequential decline, and I think next year, the gross margins, while still you know, a little bit pressured versus the overall gross margin percent for FY25, that the cadence of that gross margin will be much more even throughout the year where we'll likely underperform in Q1 because of the tough compare, but make up for that in the back half of the year.
David Lantz: Got it. That's helpful. And then with respect to comps in the quarter, can you talk about, you know, the dynamics between traffic and ticket as well and what you're kind of embedding for you know, the improvements in 2026?
Brian D'Ambrosia: Yes. For the quarter, traffic was down low single digits. Ticket was up mid-single digits to blend out to the adjusted comp of up about three, 2.8%. Encouragingly, we saw positive store traffic in March, and our comps in April and May are supported by better traffic trends as well. So I think we feel, you know, a little bit encouraged there in terms of the bending of the traffic trends in the recent months. Thank you.
David Lantz: You're welcome.
Operator: Thank you. Just as a reminder, if you would like to ask any further questions, you can press star one on your telephone keypad. We now have a question from Bret Jordan with Jefferies.
Bret Jordan: Hey. Good morning, guys.
Brian D'Ambrosia: Good morning.
Bret Jordan: On the ATD relationship, did the economics of that change with their final payment of the earn-out? Seemed in that press release. They talked about, like, commercially reasonable support efforts. Is there anything that either promotions or supply fill that has changed with them or pricing?
Brian D'Ambrosia: Yep. Bret, this is Brian. There's nothing material that's changed in our relationship with them.
Felix Veksler: There was a couple things that we just clarified from the original agreement.
Brian D'Ambrosia: Related to service levels. Just given current operating environments, but nothing that materially impacts our business. Or our relationship with ATD going forward.
Bret Jordan: Okay. Great. And then when you think about the store closures, I mean, what's the common denominator? Is there a specific region or a class of stores that are underperforming cleanup or is it sort of spaced throughout the network?
Peter Fitzsimmons: So, Bret, it's Peter. It's spaced throughout the network. We haven't produced a list of those stores and, obviously, we need to communicate with our teammates before we do that. I would say that when you build a brand over decades, in the retail and auto aftermarket industry, you always have places that are gaining in momentum and other locations that probably aren't as strong. And so what we've chosen to do in the last two months is look very closely at those stores that we don't think can ever really produce the earnings profile that we're looking for. And those are the ones we addressed in the 145 store closings.
I think that there will continue to be evaluation of stores over every year, but I don't anticipate any other store closings this year. And I'm very confident that the remaining stores are well-positioned to improve their performance as time passes.
Bret Jordan: Okay. And then a quick final question. I guess, significant improvement in performance recently, and I guess what do you attribute that to? Have you been more promotional? Is the broader market getting a lift? I mean, obviously, not having been there a long time to make big operational changes, but how do you see the backdrop on the industry relative to the comp lift you've seen recently?
Peter Fitzsimmons: Well, I think that the economic environment favors our type of service. For example, I would be surprised if there isn't downward pressure on people buying new and used cars. And for automotive aftermarket service companies like ourselves, there's gonna continue to be a need to replace tires and provide other services. So I think the industry dynamics are quite positive for what we do even if we have some slowdown in the economy, which I think we saw in the first quarter. I think that over a longer period of time, the things that we're putting into place that will improve our performance means that we can increase our operating income this year without significant improvement in the economy.
And I think that the need for the company right now is to focus on the continuing stores and produce the sort of results that we can I think, ultimately, appreciate with time during this year by quarter to see the improvement actions that we're putting into place now take effect.
Bret Jordan: Great. Thank you.
Brian D'Ambrosia: Thanks, Bret.
Operator: Thank you. Just another reminder, if you would like to ask any further questions, you can do so by pressing star one. I can confirm that does conclude the Q&A session today. And I would now like to hand it back to our CEO, Peter Fitzsimmons, for some final closing comments.
Peter Fitzsimmons: So thanks again for joining us today. I think we're all very optimistic about the opportunities in front of us. And I'm confident that Monro is well-positioned to capitalize on some of the strong industry trends for a company like ours as we go forward. I know we have significant room for improvement, as we implement our performance improvement plan. I know we have a lot of work to do, but I really do think that there's a solid foundation for us to create long-term value for all of our shareholders. We look forward to keeping you updated on our progress in the quarters to come. And thanks again for joining today.
Operator: Thank you all for joining today's conference call with Monro. I can confirm today's call has now concluded. Thank you for your participation, and you may now disconnect.