Monro, Inc. (NASDAQ:MNRO) Q3 2023 Earnings Call Transcript

Michael Broderick: John, I’ll take care of that. I’ll take that one. It’s Mike. I think it’s less about the manufacturers. It’s all about Monro. We were — as we really become a bigger customer with fewer suppliers, they’re investing behind us. And that’s not only on the tire side, but the parts side. So what we deployed in the fourth quarter is really we took advantage of what they normally have in the marketplace for our competitors, but Monro really stepped up, activated against it, really partnered with fewer suppliers, and we just became more relevant. And it really benefited us. On top of that, we actually lived into what we committed to. We deployed tires. We really gave our teams the assortment that they need to compete in the marketplace.

We kept them in stock. And these are the things that our suppliers are looking for from a large customer like Monro. So I really have to give credit to not only the field team, but the merchandising organization, our inventory teams really making ourselves getting ourselves ready for basically a winter season that came over 10 days.

John Healy: Great. And then I just want to ask just — I feel like the commentary on the M&A pipeline was maybe a little bit different than I was expecting. So I just love to hear what you guys are seeing there? Is it sellers come to you? Are you looking at anything that maybe would be bigger in size than what you’ve kind of normally looked at? Or just kind of — any color on how the M&A pipeline has seemed to fill up here, because I thought maybe we were taking a little bit more of a conservative tone there, at least — that’s what I thought at least.

Brian D’Ambrosia: Yes. No. I mean there’s really — as we look at our M&A opportunity, the activity that we’ve been working, we have more than 10 NDAs signed. We continue to evaluate deals. We’ve always been a very disciplined financial buyer. And I think adding to that now, we’re a very disciplined operational buyer, meaning, that we’re going to take on stores that have a really clear path to quick accretion for us with limited kind of investments in our team’s time for needing to improve those stores immediately. We have a lot of focus on our bottom 300 stores like we talked about. We need to continue that focus. We have a real focus on improving our business, delivering those mid-single-digit comps and improving our profitability across all of our categories.

So with that focus, we want to be really disciplined in our acquisition approach. We had a deal that we announced this quarter. It was one of those that met all of the criteria that allowed for a nice acquisition and a nice integration, and we look forward to closing that in Q4. But there will be continued M&A as we move forward for the deals that make sense for us operationally and financially.

John Healy: Great. Thank you guys.

Michael Broderick: Thank you.

Operator: Thank you. Our next question comes from Bret Jordan of Jefferies. Bret, your line is now open.

Bret Jordan: Hi, good morning, guys.

Michael Broderick: Good morning, Bret.

John Healy: To adjust for, I guess, sort of a lot of the pricing moving pieces, do you have a day adjusted car count comp that we could look at just sort of to think about traffic versus the lower price point tires and sort of the other moving parts?

Brian D’Ambrosia: Yes. We don’t provide — we have provided kind of a traffic number even unadjusted for days. So the quarter was continued to be led by ticket. And tire units, we said were positive. Those were positive, both reported and adjusted