Monro, Inc. (NASDAQ:MNRO) Reports Q2 Fiscal 2027 Sales Decline of 1.8%

Sonal Goyal

30 October 2026 09:16 PM AEDT

Monro, Inc. (NASDAQ:MNRO) Reports Q2 Fiscal 2027 Sales Decline of 1.8%

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Key Highlights

Q2 fiscal 2027 sales declined 1.8% to $283.6 million, entirely driven by a 1.8% drop in comparable store sales
Batteries (+8%) and maintenance services (+3%) were positive contributors, offset by declines in tires and other categories
Net loss of $1.6 million, or $0.05 diluted loss per share, compared to Net Income of $5.7 million in the prior-year period
Adjusted diluted loss per share of $0.01, down from adjusted diluted EPS of $0.21 in Q2 fiscal 2026

Sales Decline Led by Comparable Store Weakness

Monro, Inc. (NASDAQ:MNRO), a leading provider of automotive repair and tire services, reported sales of $283.6 million for the second quarter of fiscal 2027, ended September 26, 2026, compared to $288.9 million in the same period of fiscal 2026. The 1.8% year-over-year decline was driven entirely by a 1.8% decrease in comparable store sales from continuing store locations.

Category performance was mixed during the quarter. Comparable store sales grew 8% for batteries and 3% for maintenance services, reflecting positive consumer Demand in those areas. Offsetting these gains were declines of 2% in alignments, 4% in tires and brakes, and 5% in front-end and shock services compared to the prior year.

Margin Compression Weighs on Profitability

Gross Margin decreased 50 basis points year-over-year, driven primarily by higher occupancy costs as a percentage of sales. Lower material costs partially offset this headwind. Total operating expenses for Q2 fiscal 2027 were $97.4 million, or 34.3% of sales, up from $90.4 million, or 31.3% of sales, in the prior year.

The increase in operating expenses was driven by a $6.1 million increase in store closing costs net of gains or losses on closed store sales, $3.4 million of higher costs at continuing locations primarily related to front shop labor, $3.2 million of higher Marketing costs, and $1.7 million of higher litigation reserve costs. These were partially offset by $7.1 million of lower consulting costs associated with the company's operational improvement plan and other cost reductions.

Operating income for Q2 fiscal 2027 was $2.6 million, or 0.9% of sales, compared to $12.8 million, or 4.4% of sales, in the prior year. Adjusted Operating Income was $4.4 million, or 1.6% of sales, compared to $14.0 million, or 4.8% of sales.

Interest and Tax Expenses

Interest expense increased to $4.7 million from $4.4 million, principally due to a higher weighted average Debt balance. Income tax benefit for Q2 fiscal 2027 was $0.3 million, or an effective tax rate of 17.0%, compared to income tax expense of $2.8 million, or an effective tax rate of 32.9% in the prior year. The improvement in the effective rate reflected the impact of discrete tax items related to share-based awards.

Bottom Line and Per Share Results

Monro reported a net loss of $1.6 million for Q2 fiscal 2027, compared to net income of $5.7 million in the same period of fiscal 2026. Diluted loss per share was $0.05, compared to Diluted Earnings per Share of $0.18 in the prior-year period. Adjusted diluted loss per share was $0.01, compared to adjusted diluted earnings per share of $0.21 in Q2 fiscal 2026.

The quarter reflected ongoing challenges in certain service categories, elevated cost pressures, and the continuing impact of the company's store optimization program that included closing 145 underperforming locations in Q1 of fiscal 2026. The operational improvement initiatives underway are intended to position the company for improved profitability over time as the cost savings take fuller effect.

Monro's second quarter of fiscal 2027 highlighted a Business navigating a challenging environment in which higher operating costs and softer demand in core categories like tires and brakes offset gains in batteries and maintenance services. The reduced consulting costs tied to the operational improvement plan signal some progress, and management's focus on cost discipline will be essential for restoring stronger profitability in the coming periods.

What caused Monro's comparable store sales decline in Q2 fiscal 2027?

Comparable store sales fell 1.8%, primarily driven by declines in tires and brakes (-4%), alignments (-2%), and front-end and shocks (-5%), partially offset by gains in batteries (+8%) and maintenance services (+3%).

Why did Monro's net income turn negative in Q2 fiscal 2027?

Net loss of $1.6 million reflected higher operating expenses, including increased store closing costs, higher labor costs, and marketing expenses, which more than offset operating income from the period.

What is Monro's adjusted diluted EPS for Q2 fiscal 2027?

Adjusted diluted loss per share was $0.01 for Q2 fiscal 2027, compared to adjusted diluted earnings per share of $0.21 in the same period of fiscal 2026.

What are the key cost drivers impacting Monro's operating expenses?

The main drivers were store closing costs of $6.1 million higher than the prior year, higher front shop labor costs, increased marketing expenses, and higher litigation reserves. These were partially offset by $7.1 million in savings from lower consulting costs tied to the operational improvement plan.

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