Monro (MNRO) Q1 2027 loss $2,149K with sales down 4.6%
Rhea-AI Filing Summary
Monro, Inc. reported Q1 fiscal 2027 sales of $287,129 thousand, down 4.6% from a year earlier, as closed stores reduced sales by 2.9% and comparable store sales fell 1.7%. Gross margin slipped to 35.0%, while lower store closing and consulting costs cut OSG&A to 33.7% of sales.
Operating income was $3,695 thousand versus a $6,075 thousand loss a year ago, but after interest and other items Monro posted a net loss of $2,149 thousand, or $0.08 per diluted share; adjusted diluted loss was $0.09. Operating activities used $30,388 thousand of cash, funded mainly by $48,435 thousand of net Credit Facility borrowings, lifting long‑term debt to $108,435 thousand.
The company previously closed 145 underperforming stores and continues to monetize related assets, recording net gains of $2,960 thousand this quarter within store closing costs, net. All 19,664 Class C preferred shares converted into 1,204,908 common shares, simplifying equity, and a Sixth Credit Facility Amendment reduced capacity to $400 million while easing certain covenants through November 2027.
Positive
- None.
Negative
- None.
Filing Explained
At June 27, Monro had $9,526 thousand cash, $108.4 million debt, $261.5 million facility availability, and $205.9 million of supplier obligations.
A Form 10-Q is an unaudited quarterly report; this filing covers the quarter ended
Monro also disclosed
The shareholder rights plan remains in place through
The filing lists
It also corrects the prior-period presentation of Credit Facility borrowings and repayments in interim cash-flow statements without changing total cash flows; comparable future interim filings will be corrected as applicable.
Key Figures
Key Terms
Store Closure Plan financial
Further Extended Covenant Relief Period financial
EBITDAR financial
supplier finance program financial
Rights Plan regulatory
pension settlement expense financial
Earnings Snapshot
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Monro (MNRO) perform financially in Q1 fiscal 2027?
What drove the sales decline for Monro (MNRO) in the quarter ended June 27, 2026?
What is Monro’s (MNRO) debt and liquidity position under its Credit Facility?
What were Monro’s (MNRO) cash flows and dividend payments in Q1 fiscal 2027?
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM
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(Mark One)
For the quarterly period ended
OR
For the transition period from _____________ to _____________
Commission File Number:
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(Exact name of registrant as specified in its charter)
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incorporation or organization) | Identification No.) |
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Registrant’s telephone number, including area code: 1 (
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ¨ x Non-accelerated filer ¨ Smaller reporting company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes
As of July 18, 2026,
Table of Contents
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION |
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Item 1. Financial Statements (Unaudited) |
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Consolidated Balance Sheets | 3 |
Consolidated Statements of Loss and Comprehensive Loss | 4 |
Consolidated Statements of Changes in Shareholders’ Equity | 5 |
Consolidated Statements of Cash Flows | 6 |
Notes to Consolidated Financial Statements | 8 |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 16 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 24 |
Item 4. Controls and Procedures | 24 |
PART II. OTHER INFORMATION |
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Item 1. Legal Proceedings | 25 |
Item 6. Exhibits | 26 |
Signatures | 27 |
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
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Assets |
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Inventory |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Finance lease and financing obligation assets, net |
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Operating lease assets, net |
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Goodwill |
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Total assets |
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Liabilities and shareholders' equity |
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Current liabilities |
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Accounts payable |
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Accrued payroll, payroll taxes and other payroll benefits |
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Deferred revenue |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Long-term finance leases and financing obligations |
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Long-term operating lease liabilities |
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Long-term deferred income tax liabilities |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies - Note 8 |
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Shareholders' equity: |
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Treasury stock |
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Accumulated other comprehensive loss |
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Retained earnings |
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Total shareholders' equity |
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Total liabilities and shareholders' equity |
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Class C convertible preferred stock Authorized
Serial preferred stock Authorized
Common stock Authorized
Treasury stock
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Loss and Comprehensive Loss
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Sales |
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Cost of sales, including occupancy costs |
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Gross profit |
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Operating, selling, general and administrative expenses |
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Operating income (loss) |
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Interest expense, net of interest income |
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Other expense (income), net |
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Loss before income taxes |
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Net loss |
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Other comprehensive income: |
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Other comprehensive income |
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Comprehensive loss |
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Loss per share: |
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Basic |
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Diluted |
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Weighted average common shares outstanding: |
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Changes in Shareholders’ Equity
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Balance at March 29, 2025 |
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Net loss |
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Other comprehensive income: |
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Dividends declared: |
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Preferred |
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Common |
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Dividend payable |
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Stock options and restricted stock |
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Stock-based compensation |
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Balance at March 28, 2026 |
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Net loss |
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Other comprehensive income: |
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Pension liability adjustment |
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Dividends declared: |
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Common |
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Dividend payable |
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Stock-based compensation |
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Balance at June 27, 2026 |
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(a)
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See accompanying Notes to Consolidated Financial Statements
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Cash Flows
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Operating activities |
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Net loss |
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Adjustments to reconcile net loss to cash used for operating activities: |
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(Gain) loss on disposal of assets |
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Pension settlement expense |
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Deferred income tax expense (benefit) |
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Change in operating assets and liabilities: |
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Inventory |
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Accounts payable |
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Accrued expenses |
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Other long-term liabilities |
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Cash used for operating activities |
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Investing activities |
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Financing activities |
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Principal payments on long-term debt |
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Principal payments on finance leases and financing obligations |
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Dividends paid |
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Deferred financing costs |
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Cash provided by (used for) financing activities |
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Decrease in cash and equivalents |
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Cash and equivalents at beginning of period |
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Supplemental information: |
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Leased assets obtained (reduced) in exchange for new (reduced) finance lease liabilities |
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Leased assets obtained in exchange for new operating lease liabilities |
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
NOTES
INDEX TO NOTES
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Notes to Consolidated Financial Statements (unaudited) |
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Note 1 Description of Business and Basis of Presentation | 8 |
Note 2 Loss per Common Share | 10 |
Note 3 Income Taxes | 11 |
Note 4 Fair Value | 11 |
Note 5 Dividends | 11 |
Note 6 Revenues | 11 |
Note 7 Long-term Debt | 12 |
Note 8 Commitments and Contingencies | 13 |
Note 9 Supplier Finance Program | 13 |
Note 10 Shareholder Governance Matters | 13 |
Note 11 Segment Reporting | 14 |
Note 12 Related Parties and Transactions | 15 |
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
NOTES
Monro, Inc. and its direct and indirect subsidiaries (together, “Monro”, the “Company”, “we”, “us”, or “our”), are engaged principally in providing automotive undercar repair and tire replacement sales and tire related services in the United States. Monro had
A certain number of our retail locations also service commercial customers. Our locations that serve commercial customers generally operate consistently with our other retail locations, except that the sales mix for these locations includes a higher number of commercial tires.
Monro’s operations are organized and managed as
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. While these statements reflect all adjustments (consisting of items of a normal recurring nature) that are, in the opinion of management, necessary for a fair statement of the results of the interim period, they do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statement presentation. The consolidated financial statements should be read in conjunction with the financial statement disclosures in our Form 10-K for the fiscal year ended March 28, 2026.
We use the same significant accounting policies in preparing quarterly and annual financial statements. For a description of our significant accounting policies followed in the preparation of the financial statements, see Note 1 of our Form 10-K for the fiscal year ended March 28, 2026.
Due to the seasonal nature of our business, quarterly operating results and cash flows are not necessarily indicative of the results that may be expected for other interim periods or the full year.
Fiscal year
We operate on a
Correction of previously issued financial statements
While preparing the 2026 consolidated financial statements, the Company identified a prior period error in the financing activities section of our Consolidated Statements of Cash Flows for the years ended March 29, 2025 and March 30, 2024 and the quarters ended June 28, 2025, September 27, 2025 and December 27, 2025, related to the presentation of proceeds from borrowings and principal payments on borrowings associated with the Company’s Credit Facility. The error did not have an impact to our Consolidated Balance Sheets, Consolidated Statement of Income and Comprehensive Income or Consolidated Statement of Changes in Shareholders’ Equity for any of the impacted periods, nor did it have any impact on total cash flows from operating, investing, or financing activities.
Although the Company determined that the error did not have a material impact on its previously issued annual and quarterly consolidated financial statements, the Company corrected the error on the affected annual statements of cash flow, as shown in Note 1 of our Form 10-K for fiscal 2026. Additionally, the Company is correcting the error on the affected interim statement of cash flows for the quarter ended June 28, 2025 herein and will correct the affected interim statements of cash flows in future filings of quarterly reports on Form 10-Q, as applicable, to reflect proceeds from borrowings under the credit facility as cash inflows from financing activities and repayments of borrowings under the credit facility as cash outflows from financing activities, without affecting any cash flow totals. Our interim Consolidated Statement of Cash Flows reflect the changes in proceeds from borrowings under the credit facility as cash inflows (outflows) from financing activities for the quarter ended June 28, 2025 as shown in the chart below.
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
NOTES
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Changes in Consolidated Statement of Cash Flows |
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Proceeds from borrowings on long-term debt, net principal payments |
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Proceeds from borrowings on long-term debt |
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Cash used for financing activities |
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In November 2024, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance, ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and operating, selling, general and administrative expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact of adopting this guidance.
In September 2025, the FASB issued new accounting guidance, ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes references to prescriptive software development stages and includes an updated framework for capitalizing internal software costs. The guidance is effective for annual reporting periods beginning after December 15, 2027, and for interim periods within that fiscal year. We are currently evaluating the impact of adopting this guidance.
In December 2025, the FASB issued new accounting guidance, ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements, which clarifies the scope and requirements for interim financial statement disclosures. The amendments create a comprehensive list of required interim disclosures and introduce a disclosure principle requiring entities to disclose, in interim periods, any event or change since the previous year-end that has a material effect on the entity. The guidance is effective for annual reporting periods beginning after December 15, 2027, and for interim periods within that fiscal year. We are currently evaluating the impact of adopting this guidance.
Other recent authoritative guidance issued by the FASB (including technical corrections to the Accounting Standards Codification (“ASC”) and the SEC did not or are not expected to have a material effect on our consolidated financial statements.
Supplemental information
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
NOTES
On May 23, 2025, following an evaluation of market segmentation and demographic data specific to geographic areas where our stores are located, our Board of Directors approved a plan to close
During the three months ended June 27, 2026, the Company sold
All losses (gains) related to store closings are included in in our Consolidated Statements of Loss and Comprehensive Loss.
We classify long-lived assets to be sold as held for sale in the period in which all of the required criteria are met. We initially measure a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held-for-sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset until the date of sale. Upon determining that a long-lived asset meets the criteria to be classified as held for sale, we cease depreciation and report long-lived assets, if material, as Assets held for sale in our Consolidated Balance Sheets.
We completed the closure of
Basic loss per common share amounts are calculated by dividing loss available to common shareholders, after deducting preferred stock dividends, by the weighted average number of shares of common stock outstanding. Diluted loss per common share amounts are calculated by dividing net loss by the weighted average number of shares of common stock outstanding adjusted to give effect to potentially dilutive securities.
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Loss per Common Share |
| Three Months Ended | ||||
(thousands, except per share data) |
| June 27, 2026 |
| June 28, 2025 | ||
Numerator for loss per common share calculation: |
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Net loss |
| $ | ( |
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Less: Preferred stock dividends |
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Loss available to common shareholders |
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Denominator for loss per common share calculation: |
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Weighted average common shares - basic |
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Effect of dilutive securities(a): |
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Preferred stock |
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Stock options |
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Restricted stock |
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Weighted average common shares - diluted |
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Basic loss per common share |
| $ | ( |
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Diluted loss per common share |
| $ | ( |
| $ | ( |
(a)For the three months ended June 27, 2026 and June 28, 2025, the computation of diluted loss per common share excludes the effect of approximately
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
NOTES
conversions, respectively, as the impact of these items is generally anti-dilutive during periods of net loss. Because of this, there is no difference between basic and diluted loss per common share for periods with net losses.
For the three months ended June 27, 2026, our effective income tax rate was (
Long-term debt had a carrying amount that approximates a fair value of $
We declared and paid dividends of $
Automotive undercar repair, tire replacement sales and tire related services represent the vast majority of our revenues. We also earn revenue from the sale of tire road hazard warranty agreements, commissions earned from the delivery of tires on behalf of certain tire vendors, as well as franchise royalties.
Revenue from automotive undercar repair, tire replacement sales and tire related services is recognized at the time the customers take possession of their vehicle or merchandise. For sales to certain customers that are financed through the offering of credit on account, payment terms are established for customers based on our pre-established credit requirements. Payment terms may vary depending on the customer and generally are
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Revenues |
| Three Months Ended | ||||
(thousands) |
| June 27, 2026 |
| June 28, 2025 | ||
Tires (a) |
| $ | |
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Maintenance |
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Brakes |
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Steering |
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Batteries |
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Exhaust |
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Franchise royalties |
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Total |
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(a) Includes the sale of tire road hazard warranty agreements and tire delivery commissions.
Revenue from the sale of tire road hazard warranty agreements is initially deferred and is recognized over the contract period as costs are expected to be incurred in performing such services, typically
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
NOTES
Changes in Deferred Revenue |
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Balance at March 28, 2026 |
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Deferral of revenue |
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Recognition of revenue |
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Balance at June 27, 2026 |
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As of June 27, 2026, we expect to recognize $
Under various arrangements, we receive from certain tire vendors a delivery commission and reimbursement for the cost of the tire that we may deliver to customers on behalf of the tire vendor. The commission we earn from these transactions is as an agent and the net amount retained is recorded as sales.
Credit Facility
In April 2019, we entered into a $
On May 23, 2024, we entered into a Fourth Amendment to the Credit Facility (the “Fourth Amendment”). Among other changes, the Fourth Amendment modified the definition of “EBITDAR” to permit add-backs relating to expenses, and restrict add-backs related to gains, associated with store closures of (a) all non-cash items and (b) cash items up to
On May 23, 2025, we entered into a Fifth Amendment to the Credit Facility (the “Fifth Amendment”). Among other changes, the Fifth Amendment further modified the definition of “EBITDAR” to permit add-backs relating to non-cash impairment and other expenses, with the restriction for add-backs of certain cash expense items up to
See Note 6 of our Form 10-K for the fiscal year ended March 28, 2026 for additional information.
On May 21, 2026, we entered into a Sixth Amendment to our Credit Facility (the “Sixth Amendment”). The Sixth Amendment 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 to the Credit Facility maturity date or November 10, 2027 (the “Further Extended Covenant Relief Period”). During the Further Extended Covenant Relief Period, the minimum interest coverage ratio will be reduced from
During the Further Extended Covenant Relief Period, the interest rate spread charged on borrowings is
During the Further Extended Covenant Relief Period, the restrictions on our ability to declare dividends were modified to reduce the cushion inside the threshold required for us to be able to declare dividends without restriction from
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
NOTES
the Credit Facility immediately before or after giving effect to the repurchase. During the Further Extended Covenant Relief Period, we may acquire stores or other businesses as long as we have minimum liquidity of at least $
In addition, the Sixth Amendment permanently reduces the Credit Facility from $
Except as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment and Sixth Amendment, the remaining terms of the Credit Facility remain in full force and effect.
We were in compliance with all debt covenants at June 27, 2026.
Within the Credit Facility, we have a sub-facility of $
Note 8 – Commitments and Contingencies
Commitments
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Commitments Due by Period |
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Principal payments on long-term debt |
| $ | |
| $ | — |
| $ | |
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| $ | — |
Finance lease commitments/financing obligations (a) |
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Operating lease commitments (a) |
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Total |
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(a)Finance and operating lease commitments represent future undiscounted lease payments and include $
Contingencies
We are currently a party to various claims and legal proceedings incidental to the conduct of our business. If management believes that a loss arising from any of these matters is probable and can reasonably be estimated, we will record the amount of the loss, or the minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable than another.
As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Litigation is subject to inherent uncertainties, and unfavorable rulings could occur and may include monetary damages. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which any such ruling occurs, or in future periods.
We facilitate a voluntary supply chain financing program to provide our suppliers with the opportunity to sell receivables due from us (our accounts payable) to a participating financial institution subject to the independent discretion of both the supplier and the participating financial institution. Should a supplier choose to participate in the program, it may receive payment from the financial institution in advance of agreed payment terms; our responsibility is limited to making payments to the respective financial institution on the terms originally negotiated with our supplier, which are generally for a term of up to
Our outstanding supplier obligations eligible for advance payment under the program totaled $
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CONSOLIDATED FINANCIAL STATEMENTS
NOTES
Rights Plan
On November 9, 2025, the Board of Directors approved the adoption of a limited-duration shareholder rights plan (the “Rights Plan”), intended to protect the best interests of all Company shareholders. Pursuant to the Rights Plan, the Company issued
Under the Rights Plan, any person that owns more than the triggering percentage as of the adoption of the Rights Plan may continue to own its shares of common stock but may not acquire any additional shares without triggering the Rights Plan. The Rights Plan has a duration, expiring on November 6, 2026. The Board of Directors may consider an earlier termination of the Rights Plan as circumstances warrant.
Equity Capital Structure Reclassification
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.
Under the Reclassification Agreement, after receiving shareholder approval on August 15, 2023, we filed amendments to our certificate of incorporation (the “Certificate of Incorporation”) to create a mandatory conversion of any outstanding shares of Class C Preferred Stock prior to an agreed sunset date of the earliest of (i) August 15, 2026; (ii) the first business day immediately prior to the record date established for the determination of the shareholders of the Company entitled to vote at the Company’s 2026 annual meeting of shareholders; and (iii) the date on which the Class C Holders, in the aggregate, cease to beneficially own at least
At the end of the sunset period, all shares of Class C Preferred Stock remaining outstanding will be automatically converted into shares of common stock at the adjusted conversion rate. In addition, the liquidation preference for the Class C Preferred Stock was amended to provide that, upon a liquidation event, each holder of Class C Preferred Stock would be entitled to receive, for each share of Class C Preferred Stock held by the holder upon a liquidation, dissolution, or winding up of the affairs of the Company, an amount equal to the greater of $
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 Class C Preferred Stock automatically converted into Common Stock. A total of
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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
NOTES
The Company has a reportable operating segment “Monro, Inc.” The accounting policies of the operating segment are the same as those described in Note 1 of our Form 10-K. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer, who regularly reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance for the Company’s single reportable segment. The CODM primarily focuses on consolidated net income to evaluate its reportable segment. The CODM also uses consolidated net income for evaluating pricing strategy and to assess the performance for determining the compensation of certain employees. All segment expenses reviewed, which represent the difference between segment revenue and segment net loss, consisted of the following:
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Segment Reporting |
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(thousands) |
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| June 27, 2026 |
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| June 28, 2025 |
Sales |
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Less: |
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Cost of sales, including occupancy costs |
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Operating, selling, general and administrative expenses |
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Depreciation and amortization expenses |
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Interest expense, net of interest income |
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Other segment items (a) |
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Provision for (benefit from) income taxes |
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Net loss |
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(a)Other segment items consist of other expense (income), net, included in the accompanying Consolidated Statements of Loss and Comprehensive Loss.
As of June 27, 2026 and June 28, 2025, assets held in the U.S. accounted for
There were no major customers individually accounting for 10% or more of consolidated net revenues.
The Board of Directors of the Company appointed Peter D. Fitzsimmons to serve as the President and Chief Executive Officer as of March 28, 2025. At this time, Mr. Fitzsimmons was serving as a partner and managing director of AlixPartners, LLP (“AlixPartners”). In connection with Mr. Fitzsimmons’ appointment, the Company entered into a consulting agreement with AP Services, LLC (“APS”), an affiliate of AlixPartners, pursuant to which APS provided for Mr. Fitzsimmons to serve as the Company’s Chief Executive Officer and for the additional resources of APS personnel as required. On December 2, 2025, the Company entered into an employment agreement with Peter Fitzsimmons, whereby he continues to serve as our President and Chief Executive Officer, and appointed him as a member of the Board of Directors at which time Mr. Fitzsimmons ceased serving as partner and managing director of AlixPartners and the consulting agreement with APS was terminated.
On December 23, 2025, the Company entered into a new consulting agreement with AlixPartners pursuant to which AlixPartners will provide consulting services to the Company under various statements of work at standard engagement rates to support the Operational Improvement Plan.
See Note 16 of our Form 10-K for the fiscal year ended March 28, 2026 for additional information.
The Company recorded total expenses related to AlixPartners and APS of $
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Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Recent Developments
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.
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.
Financial Summary
First quarter 2027 included the following notable items:
Diluted loss per common share was $0.08.
Adjusted diluted loss per common share, a non-GAAP measure, was $0.09.
Sales decreased 4.6 percent, due to closed stores and lower comparable store sales.
Comparable store sales decreased 1.7 percent from the prior year period.
Operating income was $3.7 million.
Adjusted operating income, a non-GAAP measure, was $2.2 million.
Net loss was $2.1 million.
Adjusted net loss, a non-GAAP measure, was $2.3 million.
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(Loss) Earnings Per Common Share |
| Three Months Ended | ||||||
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| June 27, 2026 |
| June 28, 2025 | Change | |||
Diluted loss per common share |
| $ | (0.08) |
| $ | (0.28) | 71.4 | % |
Adjustments |
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| (0.01) |
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Adjusted diluted (loss) earnings per common share |
| $ | (0.09) |
| $ | 0.22 | (140.9) | % |
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 on page 19 under “Non-GAAP Financial Measures.”
We define comparable store sales as sales for locations that have been opened or owned at least one full fiscal year. We believe this period is generally required for new store sales levels to begin to normalize. Management uses comparable store sales to assess the operating performance of the Company’s stores and believes the metric is useful to investors because our overall results are dependent upon the results of our stores. Comparable sales measures vary across the retail industry. Therefore, our comparable store sales calculation is not necessarily comparable to similarly titled measures reported by other companies.
Analysis of Results of Operations
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Summary of Operating Income (Loss) |
| Three Months Ended | ||||||
(thousands) |
| June 27, 2026 |
| June 28, 2025 | Change | |||
Sales |
| $ | 287,129 |
| $ | 301,035 | (4.6) | % |
Cost of sales, including occupancy costs |
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| 186,734 |
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| 194,129 | (3.8) |
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Gross profit |
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| 100,395 |
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| 106,906 | (6.1) |
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Operating, selling, general and administrative expenses |
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| 96,700 |
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| 112,981 | (14.4) |
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Operating income (loss) |
| $ | 3,695 |
| $ | (6,075) | 160.8 | % |
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Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS
Sales
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.
Sales growth – from both comparable store sales and new stores – represents an important driver of our long-term profitability. We expect that comparable store sales growth will significantly impact our total sales growth. We believe that our ability to successfully differentiate our customers’, often referred to as “guests”, experience through a careful combination of merchandise assortment, price strategy, convenience, and other factors will, over the long-term, drive both increasing guest traffic and the average ticket amount spent.
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Sales |
| Three Months Ended | |||||
(thousands) |
| June 27, 2026 |
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| June 28, 2025 | ||
Sales |
| $ | 287,129 |
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| $ | 301,035 |
Dollar change compared to prior year |
| $ | (13,906) |
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Percentage change compared to prior year |
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The sales decrease was due to closed 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.
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Sales Percentage Change | Three Months Ended | |||
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| June 27, 2026 |
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Sales change |
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Primary drivers of change in sales |
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Closed store sales |
| (2.9) | % |
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Comparable store sales |
| (1.7) | % |
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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.
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Comparable Store Product Category Sales Change | Three Months Ended | |||
| June 27, 2026 | June 28, 2025 | ||
Batteries | 8 | % | 9 | % |
Front end/shocks | 1 | % | 26 | % |
Alignment | 1 | % | 0 | % |
Tires | (1) | % | 4 | % |
Brakes | (1) | % | 9 | % |
Maintenance service | (5) | % | 4 | % |
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Sales by Product Category | Three Months Ended | |||
| June 27, 2026 | June 28, 2025 | ||
Tires | 46 | % | 46 | % |
Maintenance service | 27 |
| 28 |
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Brakes | 15 |
| 15 |
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Steering (a) | 9 |
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Batteries | 2 |
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Other | 1 |
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Total | 100 | % | 100 | % |
(a)Steering product category includes front end/shocks and alignment product category sales.
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Change in Number of Company-Operated Retail Stores | Three Months Ended | |
| June 27, 2026 | June 28, 2025 |
Beginning store count | 1,115 | 1,260 |
Closed (a) | — | (145) |
Ending store count | 1,115 | 1,115 |
(a)All 145 stores were closed in the first quarter of fiscal 2026 as a result of the Store Closure Plan.
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Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS
Cost of Sales and Gross Profit
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Gross Profit | Three Months Ended | |||||
(thousands) | June 27, 2026 | June 28, 2025 | ||||
Gross profit | $ | 100,395 |
| $ | 106,906 |
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Percentage of sales |
| 35.0 | % |
| 35.5 | % |
Dollar change compared to prior year | $ | (6,511) |
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Percentage change compared to prior year |
| (6.1) | % |
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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.
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Gross Profit as a Percentage of Sales Change | Three Months Ended | |||
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Gross profit change |
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Primary drivers of change in gross profit as a percentage of sales: |
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Occupancy costs |
| (90) | bps |
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Technician labor costs |
| 40 | bps |
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OSG&A Expenses
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OSG&A Expenses | Three Months Ended | |||||
(thousands) | June 27, 2026 | June 28, 2025 | ||||
OSG&A Expenses | $ | 96,700 |
| $ | 112,981 |
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Percentage of sales |
| 33.7 | % |
| 37.5 | % |
Dollar change compared to prior year | $ | (16,281) |
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Percentage change compared to prior year |
| (14.4) | % |
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The decrease 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 in store 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.
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OSG&A Expenses Change | Three Months Ended | |||
(thousands) |
| June 27, 2026 |
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OSG&A expenses change |
| $ | (16,281) |
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Drivers of change in OSG&A expenses: |
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Decrease in store closing costs, net |
| $ | (17,776) |
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Decrease from closed stores |
| $ | (4,136) |
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Decrease in consulting costs related to the Operational Improvement Plan |
| $ | (3,713) |
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Decrease from transition costs related to back-office optimization |
| $ | (238) |
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Increase from costs related to shareholder matters |
| $ | 80 |
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Increase from comparable stores |
| $ | 4,581 |
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Increase in store advertising costs |
| $ | 4,921 |
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Other Performance Factors
Net Interest Expense
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 points as compared to the same period of the prior year.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
Provision for Income Taxes
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.
Non-GAAP Financial Measures
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.
These non-GAAP financial measures are not intended to represent, and should not be considered more meaningful than, or as an alternative to, their most directly comparable GAAP measures. These non-GAAP financial measures may be different from similarly titled non-GAAP financial measures used by other companies.
Adjusted operating income is summarized as follows:
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Reconciliation of Adjusted Operating Income | Three Months Ended | ||||
(thousands) | June 27, 2026 |
| June 28, 2025 | ||
Operating income (loss) | $ | 3,695 |
| $ | (6,075) |
Consulting costs related to the Operational Improvement Plan |
| 1,009 |
|
| 4,722 |
Transition costs related to back-office optimization |
| 333 |
|
| 571 |
Costs related to shareholder matters |
| 80 |
|
| — |
Store closing costs, net (a) |
| (2,960) |
|
| 14,816 |
Adjusted operating income | $ | 2,157 |
| $ | 14,034 |
(a)Amounts include the closing costs and asset write-offs related to the closure of 145 underperforming stores, in accordance with the Store Closure Plan, net of related gains on the sale of owned locations, lease assignments and early lease terminations.
Adjusted net (loss) income is summarized as follows:
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Reconciliation of Adjusted Net (Loss) Income | Three Months Ended | ||||
(thousands) | June 27, 2026 |
| June 28, 2025 | ||
Net loss | $ | (2,149) |
| $ | (8,050) |
Pension settlement expense |
| 1,171 |
|
| — |
Consulting costs related to the Operational Improvement Plan |
| 1,009 |
|
| 4,722 |
Transition costs related to back-office optimization |
| 333 |
|
| 571 |
Write-off of debt issuance costs |
| 221 |
|
| 263 |
Costs related to shareholder matters |
| 80 |
|
| — |
Store closing costs, net (a) |
| (2,960) |
|
| 14,816 |
Provision for (benefit from) income taxes on pre-tax adjustments |
| 38 |
|
| (5,297) |
Adjusted net (loss) income | $ | (2,257) |
| $ | 7,025 |
(a)Amounts include the closing costs and asset write-offs related to the closure of 145 underperforming stores, in accordance with the Store Closure Plan, net of related gains on the sale of owned locations, lease assignments and early lease terminations.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
Adjusted diluted (loss) earnings per share is summarized as follows:
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Reconciliation of Adjusted Diluted (Loss) Earnings per Share | Three Months Ended | ||||
| June 27, 2026 |
| June 28, 2025 | ||
Diluted loss per share | $ | (0.08) |
| $ | (0.28) |
Pension settlement expense |
| 0.03 |
|
| — |
Consulting costs related to the Operational Improvement Plan |
| 0.02 |
|
| 0.12 |
Transition costs related to back-office optimization |
| 0.01 |
|
| 0.01 |
Write-off of debt issuance costs |
| 0.01 |
|
| 0.01 |
Costs related to shareholder matters (b) |
| 0.00 |
|
| — |
Store closing costs, net (a) |
| (0.07) |
|
| 0.37 |
Adjusted diluted (loss) earnings per share | $ | (0.09) |
| $ | 0.22 |
(a)Amounts include the closing costs and asset write-offs related to the closure of 145 underperforming stores, in accordance with the Store Closure Plan, net of related gains on the sale of owned locations, lease assignments and early lease terminations.
(b)Amounts, in the periods presented, may be too minor in amount, net of the impact from income taxes, to have an impact on the calculation of adjusted diluted (loss) earnings per share.
Note: The calculation of the impact of non-GAAP adjustments on diluted (loss) earnings per share is performed on each line independently. The table may not add down +/- $0.01 due to rounding.
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.
Analysis of Financial Condition
Liquidity and Capital Resources
Capital Allocation
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.
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.
Future Cash Requirements
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.
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.
Dividends
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.
Working Capital Management
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.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
Sources and Conditions of Liquidity
Our sources to fund our material cash requirements are predominantly cash from operations, availability under our Credit Facility, and cash and equivalents on hand.
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.
We believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following June 27, 2026, as well as in the long-term.
Summary of Cash Flows
The following table presents a summary of our cash flows from operating, investing and financing activities.
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Summary of Cash Flows |
| Three Months Ended | ||||
(thousands) |
| June 27, 2026 |
| June 28, 2025 | ||
Cash used for operating activities |
| $ | (30,388) |
| $ | (1,939) |
Cash used for investing activities |
|
| (4,546) |
|
| (2,366) |
Cash provided by (used for) financing activities |
|
| 29,827 |
|
| (8,656) |
Decrease in cash and equivalents |
|
| (5,107) |
|
| (12,961) |
Cash and equivalents at beginning of period |
|
| 14,633 |
|
| 20,762 |
Cash and equivalents at end of period |
| $ | 9,526 |
| $ | 7,801 |
Cash used for operating activities
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.
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.
Cash used for investing activities
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.
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.
Cash provided by (used for) financing activities
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.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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.
Critical Accounting Estimates
The consolidated financial statements are prepared in accordance with GAAP. The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. We base our estimates on historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows may be affected.
For a description of our critical accounting estimates, refer to Part II, Item 7., “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended March 28, 2026. There have been no material changes to our critical accounting estimates since our Form 10-K for the year ended March 28, 2026 was filed.
Recent Accounting Pronouncements
See “Recent Accounting Pronouncements” in Note 1 to our consolidated financial statements for a discussion of the impact of recently issued accounting standards on our consolidated financial statements as of June 27, 2026 and the expected impact on the consolidated financial statements for future periods.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments, and results and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by, or including words such as “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “strategy,” “will,” “would” and variations thereof and similar expressions. Forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed. For example, our forward-looking statements include, without limitation, statements regarding:
•the impact of competitive services and pricing;
•the effect of economic conditions and geopolitical uncertainty, seasonality, and the impact of weather conditions and natural disasters on customer demand;
•advances in automotive technologies including adoption of electronic vehicle technology;
•our dependence on third-party vendors for certain inventory;
•the risks associated with vendor relationships and international trade, particularly goods sourced from countries targeted with import tariffs;
•the impact of changes in U.S. trade relations and ongoing trade disputes between the United States, China, and other countries and other potential impediments to imports;
•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;
•our anticipated sales, comparable store sales, gross profit margin, costs of goods sold (including product mix), OSG&A expenses and other fixed costs, and our ability to leverage those costs;
•management’s estimates and expectations as they relate to income tax liabilities, deferred income taxes, and uncertain tax positions;
•management’s estimates associated with our critical accounting policies, including insurance liabilities, income taxes, and valuations for our goodwill and long-lived assets impairment analyses;
•the impact of industry regulation, including changes in environmental, consumer protection, and labor laws;
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MANAGEMENT’S DISCUSSION AND ANALYSIS
•potential outcomes related to pending or future litigation matters;
•business interruptions;
•risks relating to disruption or unauthorized access to our computer systems;
•our ability to protect customer and employee personal data;
•risks relating to acquisitions and the integration of acquired businesses with ours;
•our growth plans, including our plans to add, renovate, re-brand, expand, remodel, relocate, or close stores and any related costs or charges, our leasing strategy for future expansion, and our ability to renew leases at existing store locations;
•the impact of costs related to planned store closings or potential impairment of goodwill, other intangible assets, and long-lived assets;
•expected dividend payments;
•our ability to protect our brands and our reputation; and
•our ability to attract, motivate, and retain skilled field personnel and our key executives.
Any of these factors, as well as such other factors as discussed in Part I, Item 1A., “Risk Factors” of our Form 10-K for the fiscal year ended March 28, 2026 as well as in our periodic filings with the SEC, could cause our actual results to differ materially from our anticipated results. The information provided in this report is based upon the facts and circumstances known as of the date of this report, and any forward-looking statements made by us in this report speak only as of the date on which they are made. Except as required by law, we undertake no obligation to update these forward-looking statements after the date of this Form 10-Q to reflect events or circumstances after such date, or to reflect the occurrence of unanticipated events.
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DISCLOSURES ABOUT MARKET RISK & CONTROLS AND PROCEDURES
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk from potential changes in interest rates. As of June 27, 2026, excluding finance leases and financing obligations, we had no debt financing at fixed interest rates, for which the fair value would be affected by changes in market interest rates. Our cash flow exposure on floating rate debt would result in annual interest expense fluctuations of approximately $1.1 million based upon our debt position at June 27, 2026 and approximately $0.6 million based upon our debt position at March 28, 2026, respectively, given a change in SOFR of 100 basis points.
Debt financing had a carrying amount that approximates a fair value of $108.4 million as of June 27, 2026, as compared to a carrying amount and a fair value of $60.0 million as of March 28, 2026.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports that we file or submit to the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
In conjunction with the close of each fiscal quarter and under the supervision of our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), we conduct an update, a review and an evaluation of the effectiveness of our disclosure controls and procedures. It is the conclusion of our Chief Executive Officer and Chief Financial Officer, based upon an evaluation completed as of the end of the most recent fiscal quarter reported on herein, that our disclosure controls and procedures were effective.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 27, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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SUPPLEMENTAL INFORMATION
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
From time to time we are a party to or otherwise involved in legal proceedings arising out of the normal course of business. Legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of one or more of these matters could have a material adverse impact on the Company, its financial condition and results of operations.
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EXHIBITS
Item 6. Exhibits
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Exhibit Index |
10.22f – Amendment No. 6 to Amended and Restated Credit Agreement, dated as of May 21, 2026. (2026 Form 10-K, Exhibit No. 10.22f)** |
31.1 – Certification of Peter D. Fitzsimmons pursuant to Section 302 of the Sarbanes – Oxley Act of 2002 |
31.2 – Certification of Brian J. D’Ambrosia pursuant to Section 302 of the Sarbanes – Oxley Act of 2002 |
32.1 – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002 |
101.INS – XBRL Instance Document |
101.LAB – XBRL Taxonomy Extension Label Linkbase |
101.PRE – XBRL Taxonomy Extension Presentation Linkbase |
101.SCH – XBRL Taxonomy Extension Schema Linkbase |
101.DEF – XBRL Taxonomy Extension Definition Linkbase |
101.CAL – XBRL Taxonomy Extension Calculation Linkbase |
104 – Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
**Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K of the Securities Act of 1933, as amended. The Company will furnish a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| MONRO, INC. | |
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DATE: July 29, 2026 |
| By: | /s/ Peter D. Fitzsimmons |
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| Peter D. Fitzsimmons |
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| President and Chief Executive Officer |
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DATE: July 29, 2026 |
| By: | /s/ Brian J. D’Ambrosia |
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| Brian J. D’Ambrosia |
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| Executive Vice President – Finance, Chief Financial Officer and Treasurer |
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| (Principal Financial Officer and Principal Accounting Officer) |
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