What kind of number that actually translates to is anyone's guess, but it's worth noting that the company says it expects positive same-store sales for its company-owned stores -- retail sales at company-owned outlets accounted for more than 13% of 2003 revenues -- despite the weather in Florida, where most of its company-owned shops are located. (Part sales and royalties, along with franchise-related business, are Midas' main revenue sources.)
Though management's tone hints at minimal same-store sales growth at Midas for the quarter, I suppose that's mildly good news for Midas investors -- at least in the context of the last six months, which have been pretty rotten for the company's market value: Midas shares have underperformed the S&P 500 by a substantial margin.
Apart from the weather, why are investors hesitant to touch Midas despite its large footprint, strong brand, and recent return to profitability? (Read Seth Jayson's August take for more recent history.) Looks like two main reasons. First, the balance sheet is long on debt and short on cash and equivalents. Second, sales and profits have come under fire in recent years.
More broadly, meanwhile, Midas has had to work furiously to identify new streams of business. Twenty years ago, the company was known largely for its muffler business, but today that's less than one-fifth of sales, as the company has moved (rather successfully) to a maintenance model instead of one of a repair shop. This has required an emphasis on service and a shift in marketing approach. (The company plans, for example, an effort to get into fleet maintenance to supplement its consumer operations.)
It's not difficult to see the potential investors spotted about two years ago when they started a long run-up in Midas' shares. Today, however, Wall Street provides little guidance on its future -- few analysts cover the company, and their near- and longer-term estimates vary greatly. If nothing else, it's added evidence that Midas is a company with a relatively simple business but a complicated prognosis.
Fool contributor Dave Marino-Nachison doesn't own shares of Midas.