Monro Inc (MNRO) 2024 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Monro Inc. earnings conference call for the fourth quarter and full year fiscal 2024. (Operator Instructions) And as a reminder, this conference call is being recorded and may not be reproduced in whole or in part without permission from the company.

女士們、先生們，早安，歡迎參加 Monro Inc. 第四季和 2024 財年全年收益電話會議。（操作員說明）謹此提醒，本次電話會議正在錄音中，未經本公司許可，不得全部或部分複製。

I would now like to introduce Felix Veksler, Senior Director of Investor Relations at Monro. Please go ahead.

現在我想介紹 Monro 投資者關係高級總監 Felix Veksler。請繼續。

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 Investors section of our website at corporate.monro.com/investors.

謝謝。大家好，感謝您參加今天早上的電話會議。在我們開始之前，請注意，作為本次電話會議的一部分，我們將參考我們網站 Corporate.monro.com/investors 投資者部分中提供的簡報。

If I could draw your attention to the Safe Harbor statement on slide 2, 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.

如果我可以提請您注意投影片 2 上的安全港聲明，我想提醒與會者，我們的簡報包含一些有關 Monro 未來業績的前瞻性聲明。實際結果可能與我們今天評論中建議的結果有重大差異。Monro 向 SEC 提交的文件和我們的收益報告中概述了可能影響未來業績的最重要因素。除非法律要求，否則本公司不承擔任何更新或修改任何前瞻性陳述的意圖或義務，無論是由於新資訊、未來事件或其他原因。

Additionally, on today's call, management's statements include a 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.

此外，在今天的電話會議上，管理階層的聲明包括對某些非公認會計原則財務指標的討論，這些指標旨在補充而不是替代可比較的公認會計原則指標。此類補充資訊與可比較公認會計準則衡量標準的調節將包含在今天的簡報和我們的收益發布中。

With that, I'd like to turn the call over to Monro's President and Chief Executive Officer, Michael Broderick.

說到這裡，我想將電話轉給 Monro 的總裁兼執行長 Michael Broderick。

Thank you, Felix, and good morning, everyone. I'd like to spend the first part of our call this morning discussing the longer-term durability of our business within the broader auto aftermarket tire and services space. Then I'll talk about current tire dynamics as well as the actions we've taken to navigate an industry-wide deferral and trade down cycle that has lasted longer than most in our industry would have expected. After that, I'll introduce four initiatives we've recently implemented to offset weakness in the tire market.

謝謝菲利克斯，大家早安。我想在今天早上的電話會議的第一部分討論我們的業務在更廣泛的汽車售後輪胎和服務領域的長期耐用性。然後我將討論當前的輪胎動態，以及我們為應對全行業的延期和降價週期所採取的行動，該週期的持續時間比我們行業中大多數人預期的要長。接下來，我將介紹我們最近為抵消輪胎市場疲軟而實施的四項措施。

I'll conclude my comments today with the foundational progress we've made that will enable Monro to reap benefits when tire volumes recover. Starting with the longer-term durability of our business. First, we are positioned as one of the leading players in our highly fragmented industry. At approximately 1,300 stores in 32 states, we have significant scale that gives us important competitive advantages over smaller players in our industry. We leverage the scale and the strength of our financial position to make critical investments in our business, our people and technology to deliver an outstanding guest experience.

我今天將以我們所取得的基礎進展來結束我的評論，這些進展將使 Monro 在輪胎銷售恢復時獲得收益。從我們業務的長期可持續性開始。首先，我們被定位為高度分散產業的領導企業之一。我們在 32 個州擁有約 1,300 家商店，規模龐大，這使我們相對於行業中的小型企業具有重要的競爭優勢。我們利用我們的規模和財務實力，對我們的業務、人員和技術進行關鍵投資，以提供卓越的賓客體驗。

Second, the fundamentals of the industry remains strong as shown on slide 3. These fundamentals include an overall growing trend of more than 280 million vehicles in operation. Vehicle miles traveled that have recovered to pre-COVID levels and an average vehicle age of more than 12 years that continues to increase. Further on slide 4, 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 the shift to do-it-for-me. Third, while the non-discretionary nature of our products and services may result in consumers deferring purchases or trading down, they cannot eliminate these purchases altogether.

其次，如幻燈片 3 所示，該產業的基本面依然強勁。這些基本麵包括營運車輛超過 2.8 億輛的整體成長趨勢。車輛行駛里程已恢復至新冠疫情前的水平，平均車齡超過 12 年並持續增加。在投影片 4 中，車輛複雜性的增加繼續推動從「DIY」向「為我做」的轉變，未來的技術進步預計將加速向「為我做」的轉變。第三，雖然我們的產品和服務的非自由裁量性質可能會導致消費者延遲購買或降價購買，但他們無法完全消除這些購買。

And finally, we have an experienced management team that is keenly focused on maximizing efficiencies, including costs to protect margins during what we believe to be a temporary period of challenges to our top line. All of this gives us confidence that Monro is well positioned to withstand the current downturn and poised for long-term success. Now onto the current tire dynamics as well as the actions we've taken to navigate.

最後，我們擁有一支經驗豐富的管理團隊，他們熱衷於最大限度地提高效率，包括在我們認為我們的營收面臨暫時挑戰期間保護利潤的成本。所有這些都讓我們相信門羅有能力抵禦當前的低迷並為長期成功做好準備。現在介紹一下目前的輪胎動態以及我們採取的應對措施。

Turning to slide 5, tires are providing a temporary yet meaningful negative impact, given that they represent around 50% of our overall business. Strained low to middle income consumers are deferring tire purchases in higher margin tiers and disproportionately trading down to tires at opening price points. This is being supported by an oversupply of lower margin tires in the US. Additionally, milder weather has contributed to the General Tire deferral cycle. The overall impact of this is fewer US tire replacement units being sold at a lower overall average selling price.

轉向幻燈片 5，輪胎帶來了暫時但有意義的負面影響，因為它們約占我們整體業務的 50%。陷入困境的中低收入消費者正在推遲購買利潤率較高的輪胎，並不成比例地以開盤價購買輪胎。美國低利潤輪胎供應過剩支撐了這一趨勢。此外，溫和的天氣也導致了通用輪胎的延期週期。其總體影響是，以較低的整體平均售價出售的美國輪胎替換件數量減少。

This has led to pressured store traffic for us, which is not supportive to attachment of our higher margin service categories. We are navigating the tire situation by leveraging the strength of our manufacturer funded promotions, which has allowed us to optimize our assortment for improved tire profitability with a higher average selling price per tire. Encouragingly, based on retail sell-out data from Torqata, a subsidiary of ATD, our tire market shares remain broadly in line with the overall market in our higher margin tiers.

這導致我們的商店客流量受到壓力，這不利於我們附加更高利潤的服務類別。我們正在利用製造商資助的促銷活動的力量來應對輪胎形勢，這使我們能夠優化我們的品種，以提高輪胎的盈利能力，並提高每條輪胎的平均售價。令人鼓舞的是，根據 ATD 子公司 Torqata 的零售銷售數據，我們的輪胎市佔率與我們較高利潤層的整體市佔率基本一致。

We are also responding to continued consumer trade-down dynamics by accelerating our proportion of opening price point tires. If consumer continues to stay value oriented and our tire manufacturers don't meet our expectations with a step-up in their support quickly, we are prepared to continue to meet our customers where they are by further increasing our tire mix at opening price points. Next, we recently implemented four initiatives to offset weakness in the tire market.

我們也透過提高開價輪胎的比例來應對消費者持續的降價動態。如果消費者繼續保持以價值為導向，而我們的輪胎製造商無法透過迅速加強支援來滿足我們的期望，我們準備好透過在開放價格點進一步增加我們的輪胎組合來繼續滿足我們的客戶。接下來，我們最近實施了四項措施來抵消輪胎市場的疲軟。

Turning to Slide 6. The first is an investment we've made in our stores to convert our 32-point courtesy inspection from a paper-based process to a digital tablet-based system that presents other needed services to our customers via industry data and pictures. This gives our store teams greater ability to build engagement and trust with our guests, which supports additional service attachment. This also supports the marketing back of any declined work for future visits. It also allows us to capture more structured data on the vehicles that we see and gives us more control over our key in-store process.

轉到投影片 6。第一個是我們對商店的投資，將我們的 32 點禮節性檢查從紙質流程轉變為基於平板電腦的數位系統，透過行業數據和圖片向客戶提供其他所需的服務。這使我們的商店團隊能夠更好地與客人建立互動和信任，從而支援額外的服務附加。這也支持對未來訪問中任何被拒絕的工作進行行銷支援。它還使我們能夠捕獲有關我們所看到的車輛的更多結構化數據，並使我們能夠更好地控制關鍵的店內流程。

We have now completed the rollout to all of our stores, and we are pleased with early results. We'll be sure to update you on the progress of our digital courtesy inspections in the future. The second is a service coupon where we are offering customers a $50 rebate toward the purchase of additional services with the purchase of one set of brake pads or rotors. With new pads and rotors on both axles, customers can earn up to $200 in coupons that can be applied to any additional purchase of services or tires. The goal of this promotion is to increase service attachment and add value for our customers.

我們現在已經完成了在所有商店的推廣，我們對早期結果感到滿意。未來我們一定會向您通報我們數位禮賓檢查的最新進展。第二個是服務優惠券，我們為客戶提供 50 美元的折扣，用於購買一套煞車片或轉子來購買附加服務。兩個車軸上都配備了新的煞車片和轉子，客戶可以獲得高達 200 美元的優惠券，可用於額外購買服務或輪胎。此次促銷活動的目的是增加服務附加價值並為客戶增加價值。

The third is a buy three tires, get one free promotion we've been running with the help of three of our tire suppliers which allows us to sell better quality tires towards value-oriented consumer. The fourth is an oil change offer that was developed as part of our renewed partnership with Valvoline, where our customers can earn cash back on an oil change. Now, concluding with the foundational progress we've made that will enable Monro to benefit when tire volumes recover.

第三個是買三個輪胎送一個免費促銷活動，我們在三個輪胎供應商的幫助下一直在進行，這使我們能夠向以價值為導向的消費者銷售質量更好的輪胎。第四個是換油優惠，這是我們與勝牌重新合作的一部分，我們的客戶可以透過換油賺取現金回饋。現在，我們已經取得了基礎性進展，這將使 Monro 在輪胎銷售恢復時受益。

Turning to slide 7, despite a deferral and trade down cycle that has lasted longer than most would have expected, we have expanded our gross margins through tire mix optimization, labor optimization through actions to reduce non-productive labor costs, including overtime in our stores, and labor efficiency through productivity improvements, including scheduling, training and our attachment selling initiatives. We will continue to remain relentlessly focused on improving our 300 smaller underperforming stores, maintaining a balanced approach between tire and service categories with competitive pricing to drive store traffic and continuously improving our customer experience.

轉向幻燈片 7，儘管延期和降價週期的持續時間比大多數人預期的要長，但我們透過輪胎結構優化、勞動力優化以及減少非生產性勞動力成本（包括商店加班）的措施擴大了毛利率，以及透過提高生產力（包括調度、培訓和我們的附件銷售計劃）來提高勞動效率。我們將繼續堅持不懈地致力於改善 300 家表現不佳的小型商店，保持輪胎和服務類別之間的平衡，並以具有競爭力的價格來推動商店客流量，並不斷改善我們的客戶體驗。

In addition, our efforts to optimize inventories by leveraging strong vendor partnerships is resulting in better availability, quality and cost of parts and tires in our stores. It has improved our cash conversion cycle through inventory management and extended payment terms. Our solid financial position, including operating cash flow generation and a strong balance sheet, supports capital return to shareholders through a healthy dividend program. We have positioned the business for a return to earnings growth when we're able to achieve flat tire units with appropriate attachments on service categories.

此外，我們透過利用強大的供應商合作夥伴關係來優化庫存，從而提高了我們商店中零件和輪胎的可用性、品質和成本。它透過庫存管理和延長付款期限改善了我們的現金週轉週期。我們穩健的財務狀況，包括營運現金流產生和強大的資產負債表，透過健康的股利計畫支持股東資本回報。當我們能夠在服務類別上實現具有適當附件的爆胎裝置時，我們就將業務定位為恢復獲利成長。

In closing, our business has long-term durability. And while tires are providing a temporary negative impact, we are navigating the situation well with our actions. We have implemented initiatives to offset weakness in the tire market, and we have made foundational progress that will enable Monro to benefit when tire volumes recover. Despite the challenges posed by the current macro-economic environment, our business continues to be well positioned. And we are confident that we remain on a path to restore our gross margins back to pre-COVID levels with double-digit operating margins over the longer term.

最後，我們的業務具有長期的耐久性。雖然輪胎帶來了暫時的負面影響，但我們正在透過我們的行動很好地應對這種情況。我們已經實施了一些措施來抵消輪胎市場的疲軟，我們已經取得了基礎性進展，這將使 Monro 在輪胎銷售恢復時受益。儘管當前宏觀經濟環境帶來挑戰，我們的業務仍處於有利地位。我們相信，從長遠來看，我們仍將毛利率恢復到新冠疫情爆發前的水平，營業利潤率達到兩位數。

Before I turn the call over to Brian, I'd like to recognize and thank all of our teammates for their efforts in serving the needs of our customers. And with that, I'll now turn it over to Brian, who will provide an overview of Monro's fourth-quarter performance, strong financial position and additional color regarding fiscal 2025. Brian?

在將電話轉給布萊恩之前，我要感謝我們所有的團隊成員為滿足客戶需求所做的努力。現在，我將把它交給 Brian，他將概述 Monro 第四季度的業績、強勁的財務狀況以及有關 2025 財年的其他資訊。布萊恩？

Thank you, Mike, and good morning, everyone. Turning to slide 8, sales decreased 0.2% year over year to $310.1 million in the fourth quarter, including $24.4 million for the extra week in the current year period. Comparable store sales increased 0.1% on a reported basis and decreased 7.2% when adjusted for the extra week of sales in fiscal 2024. This was driven by the consumer and tire dynamics that Mike just walked through. Tire units in the quarter were down 11%. Comp store sales and our 300 small or underperforming stores were consistent with our overall comp in the quarter.

謝謝你，麥克，大家早安。轉向投影片 8，第四季銷售額年減 0.2% 至 3.101 億美元，其中包括本年度額外一週的 2,440 萬美元。根據報告，可比商店銷售額增長了 0.1%，根據 2024 財年額外一周的銷售額進行調整後，可比商店銷售額下降了 7.2%。這是由麥克剛剛經歷的消費者和輪胎動態推動的。本季輪胎銷量下降 11%。比較商店銷售額和我們 300 家小型或表現不佳的商店與我們本季的整體比較一致。

Gross margin increased 210 basis points compared to the prior year, primarily resulting from lower technician labor costs, including a 15% reduction in overtime hours and lower material costs as a percentage of sales, which were partially offset by higher fixed occupancy costs as a percentage of sales. Total operating expenses were $99.7 million or 32.2% of sales as compared to $97.6 million or 31.4% of sales in the prior year period. The increase on a dollar basis was principally due to $1.6 million of higher non-recurring costs in the quarter compared to the prior year period.

毛利率比上年增長 210 個基點，主要是由於技術人員勞動力成本下降，包括加班時間減少 15%，以及材料成本佔銷售額的百分比降低，但固定佔用成本百分比上升部分抵消了這一影響的銷售量。總營運費用為 9,970 萬美元，佔銷售額的 32.2%，而去年同期為 9,760 萬美元，佔銷售額的 31.4%。以美元計算的成長主要是由於本季非經常性成本比去年同期增加了 160 萬美元。

Excluding these costs, total operating expenses, inclusive of an extra week, increased $500,000 compared to the prior year. Operating income for the fourth quarter increased to $10.3 million or 3.3% of sales. This is compared to $6.2 million or 2% of sales in the prior year period. Net interest expense decreased to $5 million as compared to $5.9 million in the same period last year. This was principally due to a decrease in weighted average debt. Income tax expense was $2 million or an effective tax rate of 35%, which as compared to $200,000 or an effective tax rate of 35.2% in the prior year period.

排除這些成本，總營運費用（包括額外一周的費用）比前一年增加了 50 萬美元。第四季營業收入增至 1,030 萬美元，佔銷售額的 3.3%。相比之下，去年同期銷售額為 620 萬美元，佔銷售額的 2%。淨利息支出從去年同期的 590 萬美元減少至 500 萬美元。這主要是由於加權平均債務減少。所得稅費用為 200 萬美元，有效稅率為 35%，而去年同期為 20 萬美元，有效稅率為 35.2%。

Net income was $3.7 million as compared to $400,000 in the same period last year. Diluted earnings per share was $0.12. This is compared to $0.01 for the same period last year. Adjusted diluted earnings per share, a non-GAAP measure, was $0.21. This is compared to adjusted diluted earnings per share of $0.08 in the fourth quarter of fiscal 2023. Please refer to our reconciliation of adjusted diluted EPS in this morning's earnings press release and on slide 13 in the appendix to our earnings presentation for further details regarding excluded items in the fourth quarter of both fiscal years.

淨利為 370 萬美元，去年同期為 40 萬美元。稀釋後每股收益為 0.12 美元。相比之下，去年同期為 0.01 美元。調整後稀釋每股盈餘（非公認會計準則衡量標準）為 0.21 美元。相比之下，2023 財年第四季調整後稀釋每股收益為 0.08 美元。請參閱我們今天上午的收益新聞稿中的調整後攤薄每股收益調節表以及收益報告附錄中第 13 張幻燈片，以了解有關兩個財年第四季度排除項目的更多詳細信息。

As highlighted on slide 9, we continue to maintain a very solid financial position. We generated $125 million of cash from operations during fiscal 2024. This has reduced our cash conversion cycle by 37 days at the end of the fourth quarter compared to the prior year period. Our AP-to-inventory ratio at the end of fiscal 2024 was 164% versus 178% at the end of fiscal 2023. We received $21 million in divestiture proceeds, we invested $25 million in capital expenditures, spent $39 million in principal payments for financing leases and distributed $36 million in dividends.

正如投影片 9 所強調的，我們繼續保持非常穩健的財務狀況。2024 財年，我們透過營運產生了 1.25 億美元的現金。與去年同期相比，第四季末我們的現金週轉週期縮短了 37 天。2024 財年末我們的應付帳款與庫存比率為 164%，而 2023 財年末為 178%。我們收到了 2,100 萬美元的剝離收益，投資了 2,500 萬美元的資本支出，花費了 3,900 萬美元的融資租賃本金，並分配了 3,600 萬美元的股息。

Lastly, repurchases of our common stock were $44 million under our share repurchase program, which authorizes us to repurchase up to $150 million of the company's common stock. We have used our significant cash flow to reduce invested capital by $89 million during fiscal 2024. At the end of the fourth quarter, we had net bank debt of $95 million, a net bank debt to EBITDA ratio of 0.7 times and total liquidity of $475 million.

最後，根據我們的股票回購計劃，我們的普通股回購金額為 4,400 萬美元，該計劃授權我們回購最多 1.5 億美元的公司普通股。2024 財年，我們利用大量現金流減少了 8,900 萬美元的投資資本。截至第四季末，我們的銀行淨債務為 9,500 萬美元，銀行淨債務與 EBITDA 比率為 0.7 倍，流動性總額為 4.75 億美元。

Now, turning to our expectations for the first quarter as well as the full year of fiscal 2025 on slide 10. As previously discussed in our commentary on the fourth quarter, we delivered an additional $0.13 of adjusted diluted earnings per share on flat top line sales in the fourth quarter, driven by variable margin expansion and prudent cost control. Although our preliminary comp store sales are down approximately 12% in the first quarter of fiscal 2025 to date, we expect to continue to deliver higher levels of profitability relative to sales in the quarter.

現在，轉向投影片 10 上我們對 2025 財年第一季和全年的預期。正如我們之前在第四季度評論中所討論的，在可變利潤率擴張和審慎成本控制的推動下，第四季度營收持平，我們額外交付了 0.13 美元的調整後稀釋每股收益。儘管我們的初步比較店銷售額在 2025 財年第一季迄今下降了約 12%，但我們預計相對於本季的銷售額將繼續實現更高水準的獲利能力。

If current top line trends continue, we would expect approximately breakeven adjusted diluted earnings per share for the first quarter of fiscal 2025. Note that every 1% change in comp store sales from our first quarter to date run rate represents more than $0.03 in adjusted diluted earnings per share in the quarter. Our earnings in fiscal 2025 will largely depend on where comp store sales land for the full fiscal year. Note that every 1% change in comps from the prior year represents about a $0.14 increase or decrease in adjusted diluted earnings per share from the prior year.

如果目前的營收趨勢持續下去，我們預計 2025 財年第一季調整後稀釋每股盈餘將達到收支平衡。請注意，從我們第一季至今的營運率來看，比較商店銷售額每發生 1% 的變化，就代表該季度調整後的稀釋每股收益超過 0.03 美元。我們 2025 財年的收入將在很大程度上取決於整個財年的比較店銷售情況。請注意，與前一年相比，比較每發生 1% 的變化，就意味著調整後的稀釋每股收益比上一年增加或減少約 0.14 美元。

This assumes our fixed occupancy costs within cost of goods and operating expenses will be flat on a dollar basis when compared to the prior year. Please note that fiscal 2025 is a 52-week year while fiscal 2024 was a 53-week year that benefited from an extra week of sales in the fourth quarter. We expect to generate at least $100 million of operating cash flow, inclusive of continued working capital reductions in fiscal 2025. The strength of our financial position, including our cash flow, positions us to maintain our dividend during what we believe to be a temporary period of challenges to our top line. Regarding our capital expenditures, we expect to spend $25 million to $35 million in fiscal 2025.

假設我們的商品成本和營運費用中的固定佔用成本以美元計算與前一年相比持平。請注意，2025 財年是 52 週的一年，而 2024 財年是 53 週的一年，這得益於第四季度額外一周的銷售。我們預計將產生至少 1 億美元的營運現金流，其中包括 2025 財年持續削減的營運資本。我們的財務狀況（包括現金流）使我們能夠在我們認為營收面臨暫時挑戰的時期維持股利。關於我們的資本支出，我們預計 2025 財年將支出 2,500 萬至 3,500 萬美元。

And with that, I will now turn the call back over to Mike for some closing remarks.

現在，我將把電話轉回給麥克，讓他發表一些結束語。

Thanks, Brian. Our industry remains fundamentally strong. Our business has been disadvantaged by temporary challenges in the tire category. Our actions to navigate the consumer deferral and trade-down dynamics, as well as our initiatives to offset weakness in the tire market and our progress to improve margins and improve cash flow will enable Monro to reap benefits when tire volumes recover. We are poised to win with our scale, strategic relationships and our experienced management team.

謝謝，布萊恩。我們的行業仍然保持強勁。我們的業務因輪胎類別的暫時挑戰而處於不利地位。我們為應對消費者延期和降價動態而採取的行動，以及抵消輪胎市場疲軟的舉措，以及我們在提高利潤率和改善現金流方面取得的進展，將使 Monro 在輪胎銷量恢復時獲得收益。我們準備好憑藉我們的規模、策略關係和經驗豐富的管理團隊贏得勝利。

With that, I will now turn it over to the operator for questions.

現在我將把它交給接線員詢問。

(Operator Instructions)

（操作員說明）

David Lantz, Wells Fargo.

大衛‧蘭茨，富國銀行。

Hey, good morning, guys. Thanks for taking our questions. I guess first one from me. Tires have been under pressure for several quarters now. So curious if you can parse out the drivers of the weaker comps in March, April and May to date in a bit more detail? And have you've seen us change in deferrals are trading down relative to a few months ago?

嘿，早上好，夥計們。感謝您回答我們的問題。我猜第一個是我的。輪胎已經承受了幾個季度的壓力。很好奇您是否能更詳細地解析出迄今為止 3 月、4 月和 5 月較弱競爭的驅動因素？您是否看到我們的延期交易相對於幾個月前有所下降？

David, good morning, this is Mike. I would say very clearly it is a tire story and it just accelerated or decelerated depending how you want to look at it coming out of February. When you look at the other categories, there's -- the service categories, you had some improvement in batteries, but everything else, since it's a very high attach category really follow along with the trends of tires when you look at brakes, especially.

大衛，早安，我是麥克。我想說得很清楚，這是一個輪胎的故事，它只是加速或減速，這取決於你如何看待二月的情況。當你看其他類別時，有——服務類別，電池方面有一些改進，但其他一切，因為它是一個非常高附加類別，當你看剎車時，特別是在關注輪胎時，它確實遵循了輪胎的趨勢。

So when I look at the comp deceleration, I would say it's really just nothing's changed. We're very focused on our initiatives. It's not something that we've done. We're priced, right. We're sort of better than ever before and we're very focused on driving value at this point in time with -- where with customers actually telling us what they're looking for.

所以當我看到補償減速度時，我會說它實際上什麼都沒有改變。我們非常專注於我們的舉措。這不是我們做過的事。我們定價了，對吧。我們比以往任何時候都更好，我們現在非常專注於透過客戶實際告訴我們他們正在尋找什麼來推動價值。

Got it. That's helpful. And then you're accelerating your OPP tire. So curious if you can help us think through the dynamics with regards to gross margins? And then do you have any visibility into when the oversupply of these tires could be totally worked through?

知道了。這很有幫助。然後你就加速你的 OPP 輪胎。很好奇您能否幫助我們思考毛利率的動態？那麼您是否知道何時可以完全解決這些輪胎的供應過剩問題？

Unfortunately, don't have a crystal ball on the oversupply of tires, but I'm very focused on making sure that if the customer is looking for value that we're driving value, my emphasis still stays with Tier 1, 2, 3 because that's the right assortment for our customers, right quality of tire. When I look at the OPP decisions that we've made, it was never an issue of not meeting the customers where they wanted where they need -- where they were expecting. We want to drive value at Monro. That's been something that we've stood behind for many, many years.

不幸的是，對於輪胎供應過剩，我沒有水晶球，但我非常專注於確保如果客戶正在尋找我們正在推動的價值，我的重點仍然是 1、2、3 級因為這對我們的客戶來說是正確的品種和正確的輪胎品質。當我審視我們所做的 OPP 決策時，發現問題從來都不是無法在客戶想要的地方滿足他們的需求，也就是他們期望的地方。我們希望推動門羅的價值。這是我們多年來一直支持的事情。

And we're using promotional dollars just to make sure they understand there's a choice. Fortunately, or unfortunately, our tire mix really didn't change. Our tire units didn't change. We didn't see anything in the industry data that told us that we lost market share, even with Tier 4. At this point in time, there's a lot of noise in the syndicated data. We're just very focused on getting more customers through the door. It wasn't that long ago David, where we were actually positive in units and tires, and we were actually really demonstrating that we can grow mid-single digits and that's what we're focused on.

我們使用促銷資金只是為了確保他們明白有一個選擇。幸運的是，或者不幸的是，我們的輪胎組合確實沒有改變。我們的輪胎單位沒有改變。我們在行業數據中沒有看到任何資訊表明我們失去了市場份額，即使是在 Tier 4 中也是如此。目前，聯合數據中有很多噪音。我們只是非常專注於讓更多的客戶進來。就在不久前，大衛，我們實際上對單位和輪胎持樂觀態度，我們實際上正在證明我們可以實現中個位數的成長，這就是我們所關注的。

Got it. That's helpful. And then just one quick one from one last one is you noted breakeven EPS for Q1 if top line trends continue. So curious if you can help parse out, you know, some SG&A and gross margin bucket expectations?

知道了。這很有幫助。然後，如果營收趨勢持續下去，您會注意到第一季的損益平衡每股盈餘。很好奇您是否可以幫助解析一些 SG&A 和毛利率預期？

Yeah, absolutely, David. So we've done a really good job, as you can see in our Q4 of increasing variable margins and also prudent cost control. So when we look at the outlook for our first quarter, it certainly can expects that variable margin expansion and prudent cost control to continue. What we have baked into the breakeven is basically flattish SG&A, flattish fixed costs within SG -- within our cost of goods, consistent tax rate, consistent interest. So really what you're seeing come through in the breakeven, as well as the sensitivity we gave on comps, is the flow-through of the top line.

是的，絕對是，大衛。因此，我們做得非常好，正如您在第四季度看到的那樣，我們不斷增加可變利潤以及審慎的成本控制。因此，當我們展望第一季的前景時，我們肯定可以預期可變利潤率擴張和審慎的成本控制將繼續下去。我們實現損益平衡的基本上是持平的SG&A、SG內持平的固定成本——在我們的商品成本範圍內、一致的稅率、一致的利息。因此，您真正看到的損益平衡以及我們對比較的敏感度是營收的流量。

Bret Jordan, Jefferies.

布雷特·喬丹，杰弗里斯。

Hey, good morning, guys, this is Patrick Buckley on for Brett. Thanks for taking our question. Taking a look at the new disclosure on franchise royalty revenue in last quarter's 10-Q, we saw a pretty significant increase. Was there anything notable to call out there? And I guess what should we expect for a normal run rate moving forward?

嘿，早上好，夥計們，我是帕特里克·巴克利 (Patrick Buckley) 替補布雷特 (Brett)。感謝您提出我們的問題。看看上一季 10 季特許經營權使用費收入的新揭露，我們看到了相當顯著的成長。那裡有什麼值得注意的地方嗎？我想我們應該對未來的正常運作率有何期望？

Yeah, that was really just related to timing of the recognition of royalties related to one of our franchisees. We don't expect there to be any meaningful change in our historical run rate going forward.

是的，這確實與我們的特許經營商之一相關特許權使用費的確認時間有關。我們預計未來的歷史運行率不會發生任何有意義的變化。

Got it. That's helpful. Thank you. And then as you look at the weather impact, were there any notable regional callouts there?

知道了。這很有幫助。謝謝。然後，當您查看天氣影響時，是否有任何值得注意的區域標註？

Patrick, good morning, this is Mike. I would say our sales performance, if you're looking at where we had a weakness, I would say it was led by the South. I would say, the Northeast and West actually performed better for us, and the Midwest was in line.

派崔克，早上好，我是麥克。我想說的是我們的銷售業績，如果你看看我們的弱點在哪裡，我會說它是由南方領先的。我想說的是，東北部和西部地區實際上對我們來說表現更好，而中西部地區也表現不錯。

Got it. That's all for us. Thanks, guys.

知道了。這就是我們的全部。多謝你們。

Thank you.

謝謝。

Thank you.

謝謝。

Brian Nagel, Oppenheimer.

布萊恩·內格爾，奧本海默。

Hey, good morning. This is William Dawson on for Brian. Thanks for taking my question.

嗨，早安。這是布萊恩的威廉道森。感謝您提出我的問題。

Good morning.

早安.

Good morning.

早安.

So our first question was on the initiatives to offset tire market weakness. How do you assess the return on these initiatives? How should they impact the P&L? And how long should they be in place?

因此，我們的第一個問題是關於抵消輪胎市場疲軟的措施。您如何評估這些舉措的回報？它們應該如何影響損益表？它們應該就位多久？

William, so we're very focused on growing top line sales. That's our greatest opportunity to drive profitability cash flow. From a margin perspective, we're relying on our vendor partners to support us and we're very focused on, obviously on making sure we drive productivity in our shops. And that's what you've seen. For the last three years, at least, we've really created a P&L that's variabilize. We've done a lot of work on working capital.

威廉，所以我們非常注重增加營收。這是我們推動獲利現金流的最佳機會。從利潤角度來看，我們依靠供應商合作夥伴來支持我們，我們非常專注於確保提高商店的生產力。這就是你所看到的。至少在過去三年裡，我們確實創建了一個可變的損益表。我們在營運資金方面做了很多工作。

And I would say from a margin front, we have a very healthy portfolio. We make money on everything that we sell. We have a lot of flexibility to be incredibly competitive. And we're going to continue to rely on our vendor partners to step up and help us drive sales. And that's where we are right now. Although we don't see ourselves losing market share, we do see ourselves very focused on gaining market share and getting back to positive unit growth on tires, which leads to a strong service category improvement.

我想說，從利潤率來看，我們擁有非常健康的投資組合。我們出售的所有產品都可以賺錢。我們擁有很大的靈活性，可以保持令人難以置信的競爭力。我們將繼續依靠我們的供應商合作夥伴來幫助我們推動銷售。這就是我們現在的處境。儘管我們不認為自己會失去市場份額，但我們確實認為自己非常專注於獲得市場份額並恢復輪胎銷量的正增長，從而帶來服務類別的強勁改善。

I Appreciate that. And to follow up a bit on a comment earlier about market share. So you provided some color on this with a higher price, I guess, higher margins. You mentioned that your market share was in line. Can you just discuss kind of across other tiers to -- would you expect this to change near term with these new initiatives? And I guess, in particular, over the course of this year, thinking about Monro versus like any base case industry trend assumptions that you have. Thank you.

我很感激。並跟進一下之前關於市場份額的評論。所以你在這方面提供了一些顏色，我想，更高的價格，更高的利潤。您提到您的市場佔有率是一致的。您能否討論一下其他層面的問題—您認為這些新舉措短期內會改變這種情況嗎？我想，特別是在今年，考慮 Monro 與你所擁有的任何基本案例行業趨勢假設。謝謝。

Yeah, William, I'll take that. This is Mike. Just to be very clear, we're not going to continue giving up market share, and we're very focused on growing units. For the last couple of years, we've done a lot of work getting our assortment, right. Obviously, with the divestiture of wholesale and the distribution centers, we have a lot of flexibility to be incredibly competitive in the marketplace. We aren't worried as potentially prices come down or more promotional activity that's happening with our Tier 1, 2, 3 vendors, we're very prepared taking advantage of those dollars to support our margin and also the value proposition for our consumer.

是的，威廉，我會接受的。這是麥克。需要明確的是，我們不會繼續放棄市場份額，我們非常專注於成長單位。在過去的幾年裡，我們做了很多工作來確保我們的產品種類正確。顯然，隨著批發和配送中心的剝離，我們擁有很大的靈活性，可以在市場上保持難以置信的競爭力。我們並不擔心潛在的價格下降或我們的 1、2、3 級供應商正在進行更多促銷活動，我們已經做好充分準備，利用這些美元來支持我們的利潤以及對消費者的價值主張。

So at this point in time, when I look at the data, and that's been always very important to me, I never expected Tier 1, 2, 3, to be as negative as it is right now. I expect that to come back, and I expect our participation to Tier 4 to be very healthy. Just like we demonstrated in the quarter, where we started out low-20%, then we moved to a mid-20% in February to a high-20% in March. And that's our attempt to staying very competitive. And at the same time, we're managing our productivity, which is flowing through to our margins.

因此，在這個時候，當我查看數據時，這對我來說一直非常重要，我從未預料到 1、2、3 級的數據會像現在這樣負面。我預計這種情況會回來，我預計我們對第 4 級的參與將非常健康。就像我們在本季度所展示的那樣，我們從 20% 的低水平開始，然後在 2 月份達到 20% 的中水平，在 3 月份達到 20% 的高水平。這就是我們保持競爭力的努力。同時，我們正在管理我們的生產力，這會影響我們的利潤。

Appreciate the color. Good luck.

欣賞顏色。祝你好運。

Thank you.

謝謝。

Thank you. We currently have no further questions, so I'll hand back to Mr. Broderick for closing remarks.

謝謝。目前我們沒有其他問題了，所以我將請布羅德里克先生做結束語。

Thank you for joining us today. This continues to be an exciting time to be part of Monro. We have a strong foundation to build upon to create long-term value for all of our stakeholders. I look forward to keeping you updated on our progress. Have a great day.

感謝您今天加入我們。作為 Monro 的一員，這仍然是一個激動人心的時刻。我們擁有堅實的基礎，可以為所有利害關係人創造長期價值。我期待著向您通報我們的最新進展。祝你有美好的一天。

Thank you, Mr. Broderick. This concludes today's call. Thank you for joining. You may now disconnect your lines.

謝謝你，布羅德里克先生。今天的電話會議到此結束。感謝您的加入。現在您可以斷開線路。