MONRO, INC.
For the period ended Sep 26, 2026. Filed Oct 29, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 26, 2026 · Filed Oct 29, 2026
MNRO$10.95-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-27; filed 2026-07-29.
0000876427-26-000010
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-26; filed 2026-10-29.
0000876427-26-000012
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 103 current paragraphs.
63 unchanged; 30 reworded; 10 added; 7 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 23 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
On October 23, 2026, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, as borrower, the lenders party thereto (the “Lenders”) and Ares Capital Corporation (“Ares”), as administrative agent for the Lenders (the senior secured credit facilities provided thereunder, the “New Credit Facilities”).
Current report
The Credit Agreement replaced the Company’s former Credit Facility (the “Credit Facility”) and the related credit agreement with nine banks, dated April 25, 2019. On October 23, 2026, the Company repaid in full all outstanding obligations under the Credit Facility and terminated all commitments thereunder.
Current report
See further detail in Item 5.,"Other Information" below and Note 13 of our consolidated financial statements.
Current report
Sales decreased 1.8 percent, due entirely to lower comparable store sales.
Current report
Operating income was $2.6 million.
Current report
Net loss was $1.6 million.
Current report
The sales decrease was due toa decrease in comparable store sales and, for the six month period, closed stores. The comparable store sales decrease was driven by a decrease in traffic, partially offset by an increase in average ticket. The following table shows the primary drivers of the change in sales for the three months and six months ended September 26, 2026, as compared to the same periods ended September 27, 2025.
Current report
(a)We reopened a store that was temporarily closed in a prior year during the three months ended September 27, 2025.
Current report
Net interest expense of $9.3 million for the six months ended September 26, 2026 increased $0.2 million compared to the prior year period, and increased as a percentage of sales from 1.5 percent to 1.6 percent. Weighted average debt outstanding for the six months ended September 26, 2026 increased by approximately $0.3 million as compared to the six months ended September 27, 2025. The weighted average interest rate for the six months ended September 26, 2026 increased approximately 10 basis points as compared to the same period of the prior year.
Current report
Cash provided by operating activities
Removed paragraphs (7)
Previous report
On May 12, 2023, we entered into a reclassification agreement (the “Reclassification Agreement”) with the holders (the “Class C Holders”) of our Class C Convertible Preferred Stock (the “Class C Preferred Stock”) to reclassify our equity capital structure to eliminate the Class C Preferred Stock. In accordance with the Reclassification Agreement, on June 18, 2026, one business day prior to the record date for the Company’s 2026 annual meeting, all outstanding shares of the Class C Preferred Stock automatically converted into Common Stock. A total of 19,664 shares of Class C Preferred Stock, with a par value of $1.50 per share and a conversion ratio of 61.275 shares of Common Stock per preferred share, were converted into 1,204,908 shares of Common Stock. Any fractional shares resulting from the conversion were settled in cash. See additional discussion in Note 10 of our consolidated financial statements.
Previous report
On May 21, 2026, we entered into an amendment (the “Sixth Amendment”) to our Credit Facility, which, among other things, amends the terms of certain of the financial and restrictive covenants in the Credit Facility to provide us with additional flexibility to operate our business. See additional discussion related to the Sixth Amendment in Note 7 to our consolidated financial statements.
Previous report
Sales decreased 4.6 percent, due to closed stores and lower comparable store sales.
Previous report
Comparable store sales decreased 1.7 percent from the prior year period.
Previous report
Operating income was $3.7 million.
Previous report
Net loss was $2.1 million.
Previous report
Cash used for operating activities
Reworded paragraphs (30)
Previous wording
First quarter 2027 included the following notable items:
Current wording
Second quarter 2027 included the following notable items:
Previous wording
Diluted loss per common share was $0.08.
Current wording
Diluted loss per common share was $0.05.
Previous wording
Adjusted diluted loss per common share, a non-GAAP measure, was $0.09.
Current wording
Adjusted diluted loss per common share, a non-GAAP measure, was $0.01.
Previous wording
Adjusted operating income, a non-GAAP measure, was $2.2 million.
Current wording
Adjusted operating income, a non-GAAP measure, was $4.4 million.
Previous wording
Adjusted net loss, a non-GAAP measure, was $2.3 million.
Current wording
Adjusted net loss, a non-GAAP measure, was $0.2 million.
Previous wording
Adjusted operating income, adjusted net (loss) income and adjusted diluted (loss) earnings per share, each of which is a measure not derived in accordance with GAAP, exclude the impact of certain items. Management believes that adjusted operating income, adjusted net (loss) income and adjusted diluted (loss) earnings per share are useful in providing period-to-period comparisons of the results of our operations by excluding certain items that are not part of our core operations, such as pension settlement expense, consulting costs related to the Company’s Operational Improvement Plan, transition costs related to back-office optimization, write-off of debt issuance costs, costs related to shareholder matters, and store closing costs, net of gains (losses) on sales of closed stores, lease assignments and early lease terminations. Reconciliations of these non-GAAP financial measures to GAAP measures are provided onpage 19 under “Non-GAAP Financial Measures.”
Current wording
Adjusted operating income, adjusted net (loss) income and adjusted diluted (loss) earnings per share, each of which is a measure not derived in accordance with GAAP, exclude the impact of certain items. Management believes that adjusted operating income, adjusted net (loss) income and adjusted diluted (loss) earnings per share are useful in providing period-to-period comparisons of the results of our operations by excluding certain items that are not part of our core operations, such as litigation reserve costs, consulting costs related to the Company’s Operational Improvement Plan, pension settlement expense, costs related to shareholder matters, transition costs related to back-office optimization, write-off of debt issuance costs and store closing costs, net of gains (losses) on sales of closed stores, lease assignments and early lease terminations. Reconciliations of these non-GAAP financial measures to GAAP measures are provided onpage 20 under “Non-GAAP Financial Measures.”
Previous wording
Sales include automotive undercar repair, tire replacement and tire related service sales, net of discounts, returns, and revenue from the sale of warranty agreements and commissions earned from the delivery of tires. See Note 6 to our consolidated financial statements for further information. We use comparable store sales to evaluate the performance of our existing stores by measuring the change in sales for a period over the comparable, prior-year period. There were 90 selling days in each of the three months ended June 27, 2026 and June 28, 2025.
Current wording
Sales include automotive undercar repair, tire replacement and tire related service sales, net of discounts, returns, and revenue from the sale of warranty agreements and commissions earned from the delivery of tires. See Note 6 to our consolidated financial statements for further information. We use comparable store sales to evaluate the performance of our existing stores by measuring the change in sales for a period over the comparable, prior-year period. There were 91 selling days in each of the three months ended September 26, 2026 and September 27, 2025, and 181 selling days in each of the six months ended September 26, 2026 and September 27, 2025.
Previous wording
The sales decrease was due toclosed stores and lower comparable store sales. The following table shows the primary drivers of the change in sales for the three months ended June 27, 2026, as compared to the same period ended June 28, 2025.
Current wording
The following table shows the primary drivers of the comparable store product category sales change for the three months and six months ended September 26, 2026, as compared to the same periods ended September 27, 2025.
Previous wording
(a)All 145 stores were closed in the first quarter of fiscal 2026 as a result of the Store Closure Plan.
Current wording
(b)Stores closed in the first quarter of fiscal 2026 as a result of the Store Closure Plan.
Previous wording
Gross profit, as a percentage of sales, decreased 50 basis points (“bps”) for the three months ended June 27, 2026, as compared to the prior year comparable period. Occupancy costs, as a percentage of sales, increased as we lost leverage on these largely fixed costs. Partially offsetting this was a decrease in technician labor costs, as a percentage of sales, due primarily to improvements in labor productivity and efficiency.
Current wording
Gross profit, as a percentage of sales, decreased 50 basis points (“bps”) for the three months ended September 26, 2026, as compared to the prior year comparable period. Occupancy costs increased, as a percentage of sales, as we lost leverage on these largely fixed costs. Partially offsetting this was a decrease in material costs, as a percentage of sales. Gross profit, as a percentage of sales, decreased 50 basis points for the six months ended September 26, 2026, as compared to the prior year comparable period. The decrease in gross profit, as a percentage of sales, was primarily due to increased occupancy costs, partially offset by a decrease in technician labor costs and material costs.
Previous wording
Thedecrease of $16.3 million in operating, selling, general and administrative (“OSG&A”) expenses for the three months ended June 27, 2026, from the comparable prior year period is primarily due to a decrease instore closing costs, net of gains (losses) on sales of closed stores, lease assignments and early lease terminations. The following table shows the impact of these costs on the change in OSG&A expenses for the three months ended June 27, 2026, as compared to the same period ended June 28, 2025.
Current wording
Theincrease of $7.0 million in operating, selling, general and administrative (“OSG&A”) expenses for the three months ended September 26, 2026, from the comparable prior year period is primarily due to an increase instore closing costs, net of gains (losses) on sales of closed stores, comparable stores costs, primarily front shop labor, and store advertising costs. The following table shows the impact of these costs on the change in OSG&A expenses for the three months and six months ended September 26, 2026, as compared to the same periods ended September 27, 2025.
Previous wording
Net interest expense of $4.6 million for the three months ended June 27, 2026 decreased $0.1 million as compared to the prior year period, and remained as a percentage of sales at 1.6 percent. Weighted average debt outstanding for the three months ended June 27, 2026 decreased by approximately $14.1 million as compared to the three months ended June 28, 2025. This decrease is primarily related to lower finance lease debt related to our stores. The weighted average interest rate increased approximately 10 basis pointsas compared to the same period of the prior year.
Current wording
Net interest expense of $4.7 million for the three months ended September 26, 2026 increased $0.3 million as compared to the prior year period, and increased as a percentage of sales from 1.5 percent to 1.7 percent. Weighted average debt outstanding for the three months ended September 26, 2026 increased by approximately $15.1 million as compared to the three months ended September 27, 2025. This increase is primarily related to higher debt outstanding under our Credit Facility. The weighted average interest rate increased approximately 20 basis pointsas compared to the same period of the prior year.
Previous wording
For the three months ended June 27, 2026, our effective income tax rate was (7.7) percent compared to 24.8 percent for the three months ended June 28, 2025. The year-over-year difference in effective tax rate is primarily related to a decrease in unrecognized tax benefits as well as the impact from other adjustments, none of which are significant, on the change in pre-tax loss.
Current wording
For the three months and six months ended September 26, 2026, our effective income tax rate was 17.0 percent and 4.5 percent, respectively, compared to 32.9 percent and (5.4) percent for the three months and six months ended September 27, 2025. The year-over-year difference in effective tax rate is primarily due to the impact of discrete tax expense related to share-based awards and other adjustments, none of which are individually significant.
Previous wording
In addition to reporting operating income (loss), net loss and diluted loss per share, which are GAAP measures, this Form 10-Q includes adjusted operating income, adjusted net (loss) income and adjusted diluted (loss) earnings per share, which are non-GAAP financial measures. We have included reconciliations to adjusted operating income, adjusted net (loss) income and adjusted diluted (loss) earnings per share from our most directly comparable GAAP measures, operating income (loss), net loss, and diluted loss per share below. Management views these non-GAAP financial measures as indicators to better assess comparability between periods because management believes these non-GAAP financial measures reflect our core business operations while excluding certain items that are not part of our core operations, such as pension settlement expense, consulting costs related to the Company’s Operational Improvement Plan, transition costs related to back-office optimization, write-off of debt issuance costs, costs related to shareholder matters, and store closing costs, net of gains (losses) on sales of closed stores, lease assignments and early lease terminations.
Current wording
In addition to reporting operating income, net (loss) income and diluted (loss) earnings per share, which are GAAP measures, this Form 10-Q includes adjusted operating income, adjusted net (loss) income and adjusted diluted (loss) earnings per share, which are non-GAAP financial measures. We have included reconciliations to adjusted operating income, adjusted net (loss) income and adjusted diluted (loss) earnings per share from our most directly comparable GAAP measures, operating income, net (loss) income, and diluted (loss) earnings per share below. Management views these non-GAAP financial measures as indicators to better assess comparability between periods because management believes these non-GAAP financial measures reflect our core business operations while excluding certain items that are not part of our core operations, such as litigation reserve costs, consulting costs related to the Company’s Operational Improvement Plan, pension settlement expense, costs related to shareholder matters, transition costs related to back-office optimization, write-off of debt issuance costs and store closing costs, net of gains (losses) on sales of closed stores, lease assignments and early lease terminations.
Previous wording
The other adjustments to diluted (loss) earnings per share reflect estimated annual effective income tax rates of 26.0 percent for the three months ended June 27, 2026 and June 28, 2025. This represents the tax effect of non-GAAP adjustments calculated at an estimated blended statutory tax rate. See adjustments from the Reconciliation of Adjusted Net (Loss) Income table above for pre-tax amounts.
Current wording
The other adjustments to diluted (loss) earnings per share reflect estimated annual effective income tax rates of 26.0 percent for the three and six months ended September 26, 2026 and September 27, 2025. This represents the tax effect of non-GAAP adjustments calculated at an estimated blended statutory tax rate. See adjustments from the Reconciliation of Adjusted Net (Loss) Income table above for pre-tax amounts.
Previous wording
We expect to continue to generate positive operating cash flow as we have done in each of the last three fiscal years. We believe the cash we generate from our operations will allow us to continue to support business operations and pay down debt. Additionally, we intend to return cash to our shareholders through our dividend program.
Current wording
We expect to continue to generate positive operating cash flow as we have done in each of the last three fiscal years. We believe the cash we generate from our operations will allow us to continue to support business operations and pay down debt.
Previous wording
In addition, because we believe a large portion of our future expenditures will be to fund our growth, through acquisition of retail stores and/or opening greenfield stores, we continually evaluate our cash needs and may decide it is best to fund the growth of our business through borrowings on our Credit Facility. Conversely, we may also periodically determine that it is in our best interests to voluntarily repay certain indebtedness early.
Current wording
In addition, because we believe a large portion of our future expenditures will be to fund our growth, through acquisition of retail stores and/or opening greenfield stores, we continually evaluate our cash needs and may decide it is best to fund the growth of our business through borrowings on our New Credit Facilities. Conversely, we may be required to make prepayments under the New Credit Facilities, or we may periodically determine that it is in our best interests to voluntarily repay certain indebtedness early.
Previous wording
We currently expect our capital expenditures to support our projects, including upgrading our facilities and systems, to be $25 million to $35 million in the aggregate in fiscal 2027. Additionally, we have contractual finance lease and operating lease commitments with landlords through October 2040 for $430.2 million in lease payments, of which $92.4 million is due within one year. For details regarding these lease commitments, see Note 8 to our consolidated financial statements.
Current wording
We currently expect our capital expenditures to support our projects, including upgrading our facilities and systems, to be $25 million to $35 million in the aggregate in fiscal 2027. Additionally, we have contractual finance lease and operating lease commitments with landlords through October 2040 for $418.9 million in lease payments, of which $90.9 million is due within one year. For details regarding these lease commitments, see Note 8 to our consolidated financial statements.
Previous wording
As of June 27, 2026 we had $108.4 million outstanding under the Credit Facility, none of which is due in the succeeding 12 months. For details regarding our indebtedness that is due, see Note 7 to our consolidated financial statements.
Current wording
As of September 26, 2026 we had $100.0 million outstanding under the Credit Facility, none of which was due in the succeeding 12 months, but which was repaid in full on October 23, 2026, in connection with the New Credit Facilities. For details regarding our indebtedness that is due, see Note 7 to our consolidated financial statements.
Previous wording
We declared and paid dividends of $0.28 per share totaling $8.7 million for each of the three months ended June 27, 2026 and June 28, 2025.
Current wording
We declared and paid dividends of $0.28 per share totaling $8.8 million and $8.7 million during the three months ended September 26, 2026 and September 27, 2025, respectively, and $0.56 per share totaling $17.5 million during each of the six months ended September 26, 2026 and September 27, 2025.
Previous wording
As of June 27, 2026, we had a working capital deficit of $241.1 million, a decrease of $40.1 million from a deficit of $281.2 million as of March 28, 2026. The overall working capital deficit is a result of our supply chain finance program. We have agreed to contractual payment terms and conditions with our suppliers. As part of our working capital management, we facilitate a voluntary supply chain finance program to provide our suppliers with the opportunity to sell receivables due from the Company to a participating financial institution subject to the independent discretion of both the supplier and participating financial institution. For details regarding our supply chain finance program, see Note 9 to our consolidated financial statements.
Current wording
As of September 26, 2026, we had a working capital deficit of $257.7 million, a decrease of $23.5 million from a deficit of $281.2 million as of March 28, 2026. The overall working capital deficit is a result of our supply chain finance program. We have agreed to contractual payment terms and conditions with our suppliers. As part of our working capital management, we facilitate a voluntary supply chain finance program to provide our suppliers with the opportunity to sell receivables due from the Company to a participating financial institution subject to the independent discretion of both the supplier and participating financial institution. For details regarding our supply chain finance program, see Note 9 and Note 13 to our consolidated financial statements.
Previous wording
Our sources to fund our material cash requirements are predominantly cash from operations, availability under our Credit Facility, and cash and equivalents on hand.
Current wording
Our sources to fund our material cash requirements are predominantly cash from operations, availability under the New Credit Facilities, and cash and equivalents on hand.
Previous wording
As of June 27, 2026, we had $9.5 million of cash and equivalents. In addition, we had $261.5 million available under the Credit Facility as of June 27, 2026, subject to compliance with our covenants.
Current wording
As of October 24, 2026, we had approximately $27.3 million in cash on hand. In addition, we had $60.0 million available under the New Credit Facilities, subject to compliance with covenants under the Credit Agreement.
Previous wording
For the three months ended June 27, 2026, cash used for operating activities was $30.4 million, which consisted of a net loss of $2.1 million and a change in operating assets and liabilities of $44.6 million, partially offset by non-cash adjustments of $16.3 million. The change in operating assets and liabilities was largely driven by timing of payments that caused accounts payable and accrued expenses to be a use of cash of $43.2 million. The non-cash charges were largely driven by $15.7 million of depreciation and amortization, $1.6 million in share-based compensation expenses and $1.2 million in pension settlement expense, offset by a $2.3 million net gain on disposal of assets.
Current wording
For the six months ended September 26, 2026, cash provided by operating activities was $4.2 million, which consisted of a net loss of $3.8 million and a change in operating assets and liabilities of $23.8 million, offset by non-cash adjustments of $31.8 million. The non-cash charges were largely driven by $30.9 million of depreciation and amortization, as well as $3.6 million in share-based compensation expense, $1.2 million in pension settlement expense, partially offset by a $3.8 million net gain on disposal of assets. The change in operating assets and liabilities was primarily driven by timing of payments that caused accounts payable and accrued expenses to be a use of cash of $24.6 million.
Previous wording
For the three months ended June 28, 2025, cash used for operating activities was $1.9 million, which consisted of a net loss of $8.1 million and a change in operating assets and liabilities of $9.2 million, partially offset by non-cash adjustments of $15.4 million. The change in operating assets and liabilities was driven by timing of payments that caused accounts payable to be a use of cash of $21.3 million. This was partially offset by our inventory being a source of cash of $7.4 million and accrued expenses being a source of cash of $4.3 million. The non-cash charges were driven by $15.6 million of depreciation and amortization, $1.5 million in loss on disposal of assets and $1.0 million in share-based compensation expense, offset by $2.7 million in deferred income tax expense.
Current wording
For the six months ended September 27, 2025, cash provided by operating activities was $30.4 million, which consisted of a net loss of $2.4 million, offset by non-cash adjustments of $27.1 million, and a change in operating assets and liabilities of $5.7 million. The non-cash charges were largely driven by $30.9 million of depreciation and amortization, as well as $1.2 million in share-based compensation expense, partially offset by a $5.1 million net gain on disposal of assets. The change in operating assets and liabilities was primarily driven by our inventory balance providing a source of cash of $18.0 million. This was partially offset by timing of payments that caused accounts payable and accrued expenses to be a use of cash of $13.4 million.
Previous wording
For the three months ended June 27, 2026, cash used for investing activities was $4.5 million. This was primarily due to cash used for capital expenditures, including property and equipment, of $7.5 million, partially offset by proceeds from the disposal of property and equipment of $3.0 million.
Current wording
For the six months ended September 26, 2026, cash used for investing activities was $7.3 million. This was primarily due to cash used for capital expenditures, including property and equipment, of $13.3 million, partially offset by proceeds from the disposal of property and equipment of $6.0 million.
Previous wording
For the three months ended June 28, 2025, cash used for investing activities was $2.4 million. This was primarily due to cash used for capital expenditures, including property and equipment, of $7.4 million, partially offset by subsequent proceeds from the sale of our wholesale tire locations and distribution assets and proceeds from the disposal of property and equipment of $3.5 million and $1.6 million, respectively.
Current wording
For the six months ended September 27, 2025, cash used for investing activities was $2.4 million. This was primarily due to cash used for capital expenditures, including property and equipment, of $13.1 million, partially offset by subsequent proceeds from the sale of our wholesale tire locations and distribution assets and proceeds from the disposal of property and equipment of $3.5 million and $7.2 million, respectively.
Previous wording
For the three months ended June 27, 2026, cash provided by financing activities was $29.8 million. This was primarily due to amounts borrowed on our Credit Facility, net of payments made during the period, of $48.4 million. This was offset by payment of finance lease principal and dividends of $9.3 million and $8.7 million, respectively, as well as deferred financing costs of $0.6 million.
Current wording
For the six months ended September 26, 2026, cash provided by financing activities was $3.4 million. This was primarily due to proceeds on our Credit Facility, net of amounts paid during the period, of $40.0 million, offset by payment of finance lease principal and dividends of $18.5 million and $17.5 million, respectively, and deferred financing costs of $0.6 million.
Previous wording
For the three months ended June 28, 2025, cash used for financing activities was $8.7 million. This was primarily due to payment of finance lease principal and dividends of $9.8 million and $8.7 million, respectively, as well as deferred financing costs of $0.5 million. These were offset by amounts borrowed on our Credit Facility, net of payments made during the period, of $10.3 million.
Current wording
For the six months ended September 27, 2025, cash used for financing activities was $38.3 million. This was primarily due to payment of finance lease principal and dividends of $19.1 million and $17.5 million, respectively, deferred financing costs of $0.5 million, and payments on our Credit Facility, net of amounts borrowed during the period, of $1.2 million.
Previous wording
•our ability to generate sufficient cash flows from operations and service our debt obligations, including our expected annual interest expense, fund our capital expenditures and working capital requirements, and to comply with the debt covenants of our Credit Facility;
Current wording
•our ability to generate sufficient cash flows from operations and service our debt obligations, including our expected annual interest expense, fund our capital expenditures and working capital requirements, and to comply with the debt covenants of our Credit Agreement;
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
During the three months ended June 27, 2026, comparable store sales increased in our batteries, front end/shocks and alignment categories. The following table shows the primary drivers of the comparable store product category sales change for the three months ended June 27, 2026, as compared to the same period ended June 28, 2025.