Q1 2023 Monro Inc Earnings Call
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Turning to funding and as a reminder, this conference call is being recorded and may not be reproduced in whole or in part without permission from the company I would now like to introduce Felix effects seen that director of Investor Relations at Monroe. Please go ahead.
Thank you Hello, everyone and thank you for joining us on this morning's call before we get started please note that as part of this call. We will be referencing a presentation that is available on the investors section of our website at corporate that Monroe Dot com forward slash investors forward Slash investor resources, if I could.
Draw your attention to the Safe Harbor statement on slide two I would like to remind participants that our presentation includes some forward looking statements about <unk> future performance actual results may differ materially from those suggested by our comments today. The most significant factors that could affect future results are outlined in monroe's filings with the SEC.
And in our earnings release, the company disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise except as required by law. Additionally on today's call management's statements include a discussion of certain non-GAAP financial measures.
Which are intended to supplement and not be substitutes for comparable GAAP measures reconciliations of such supplemental information to the comparable GAAP measures will be included as part of today's presentation and in our earnings release with that I would like to turn the call over to Monroe's, President and Chief Executive Officer, Michael Broderick.
Thank you Felix and good morning, everyone.
I'll spend the first part of our call. This morning recapping our strategy.
We've made as evidenced by our first quarter's results.
I'll, then discuss the divestiture of our noncore wholesale entire distribution assets completed in the quarter as well as provide an update on our capital allocation.
We are a leader in the highly resilient and largely non discretionary auto service aftermarket industry.
Given the resiliency of our business model and the robust demand for our products and services our success remains in our hands.
We are intently focused on continuous improvement in store execution.
Over the last 12 months, we have increased staffing levels in our stores in order to meet the needs of our customers.
We are focused on productivity improvement plans to drive more sales and profit at our locations.
We are also executing our strategy to improve our underperforming stores, which represent about a quarter of our overall store base.
Our first quarter results for this group of stores show that this strategy is working.
In the first quarter, our retail comp store sales grew approximately 3%.
Comp store sales and our 300 small or underperforming stores increased 15% in the quarter.
As a reminder, comp store sales at these stores decreased by 8% in fiscal 2022 compared to fiscal 2020.
The acceleration in sales at these 300 stores was the result of improved technician staffing levels and trading to meet customer demand.
Comp sales in our remaining stores were approximately flat.
These stores experienced softer consumer demand in the quarter.
While a number of factors can impact demand. This softness was at least partly due to our broad based inflationary pressures impacting the consumer including higher fuel prices and the negative impact on miles driven.
We are not satisfied with our top line results, but we are encouraged that our tire unit market share increased in the quarter.
Regarding staffing we are in the final stages of right sizing our store labor and believe we have built the labor capacity in our stores to meet customer demand.
These investments in additional head count inflationary wage pressures increased our technician labor cost as a percentage of sales in the quarter by 200 basis points versus the same period last year.
This was up 50 basis points sequential improvement, resulting from an increase in sales protect an hour and a 9% reduction in overtime hours.
Our first quarter demonstrates clear progress in order to meet our mid single digit comp store sales growth expectations, we still have important work to do.
It is now about properly training of our technicians and reallocating resources between the front of shop and packet shop investments to maximize store productivity.
We are focused on training, our new and existing teammates on the key in store processes that drive sales and delivering outstanding guest experience.
This includes store scheduling phone skills, courtesy inspections, and becoming our customers most trusted advisor.
We continue to improve and these operational areas.
While comparable store sales in our 300 small or underperforming locations were up nearly 10%.
Continued softness in consumer demand in our remaining locations resulted in a decrease in preliminary comp store sales for fiscal July of less than 1%.
Now that our staffing initiatives are almost complete we are carefully managing expenses in the business, which we expect to drive profitably.
As we continue to capture productivity improvements from our technician staffing investments, we expect to deliver better sales and gross margin results as fiscal 2023 progresses.
Now turning to the divestiture, we announced last quarter.
In June we successfully completed the divestiture of our wholesale entire distribution assets to American tire distributors for a total transaction value of $102 million.
We received $62 million at closing and the remaining $40 million will be paid to us quarterly over approximately two years based on our tire purchases from or through ATV in connection with the supply agreement, we entered into with them.
We are pleased to report that our partnership with HEB is off to a great start, giving us much better availability quicker delivery and better pricing.
Aside from the cash flow generated from this transaction. It has sharpened our focus on our retail store operations. This is our core strength and where we will concentrate all of our energy and resources.
I'd like to thank all of our teammates for their hard work in bringing this transaction over the finish line and for their ongoing dedication to our customers I would also like to wish those teammates who transitioned over to our partner at ATV all the best in the future.
Lastly, an update on our capital allocation.
The proceeds received from the completed divestiture excess cash being generated by our retail operations and the strength of our balance sheet allows us to continue to return capital to our shareholders at the same time as we pursue our growth strategy.
During the first quarter, we expanded our long standing policy of sharing our results with our shareholders through an increase in our dividend.
And we began executing on our share repurchase program, which authorizes us to repurchase up to $150 million of the company's common stock.
As part of our growth strategy, we continue to carefully review value enhancing acquisitions, while maintaining our disciplined approach in evaluating multiples. We believe we have significant capacity to acquire businesses, which fit into our overall strategic plan.
In summary, as we continue to navigate an uncertain macro environment. There is robust demand for our products and services in store execution is our greatest opportunity for improving results and is firmly in our control.
Our staffing initiatives and focus on our small or underperforming stores delivered retail comp store sales growth in the first quarter as our training and productivity initiatives take hold we expect to deliver continued improvements in sales and earnings.
The best picture of our noncore wholesale entire distribution assets will allow for a sharper focus on our retail operations.
Significant cash flow generation will allow us to return capital to shareholders through healthy dividend and share repurchase programs as well as capitalize on acquisitions.
With that I'll now turn the call over to Brian who will provide an overview of <unk> first quarter's performance strong financial position and additional color regarding fiscal 2023, Brian .
Thank you, Mike and good morning, everyone.
Before getting into the specific details of the quarter note that the discussion of our first quarter financial performance includes the results of the divested wholesale tire and distribution assets through June 16th.
Turning to slide eight sales increased two 3% year over year to $349 $5 million in the first quarter.
Total comparable store sales increased 4%, while sales from new stores increased $11 million.
Excluding the divested assets retail comparable store sales increased two 8%.
Gross margin decreased 180 basis points from the prior year to 35% a.
The year over year decrease was primarily due to an incremental investment and technician head count and wages to support current and future topline growth.
We estimate that this incremental investment impacted gross margin by 200 basis points in the quarter.
Lower than expected comparable store sales growth also resulted in higher fixed distribution and occupancy costs as a percentage of sales.
Material costs as a percentage of sales improved year over year, driven by higher selling prices and a mix shift towards our higher margin service categories. Total operating expenses were $95 9 million or 27, 4% of sales as compared to $98 million or 28, 7% of sales and.
In the prior year period.
The decrease was principally due to a $1 $2 million gain on the sale of our wholesale tire locations and distribution assets.
Net of closing costs as well as costs associated with the closing of our related warehouse in the quarter.
And $3 $9 million and onetime litigation settlement costs in the prior year period.
Operating income for the first quarter declined to $26 3 million or seven 5% of sales.
This is compared to $27 9 million.
Or eight 2% of sales in the prior year period.
Net interest expense decreased to $5 7 million as compared to $6 9 million in the same period last year.
This was principally due to a decrease in weighted average debt.
Income tax expense was $8 1 million.
Or an effective tax rate of 39, 6%.
Compared to $5 3 million or an effective tax rate of 25, 4% in the prior year period.
The increase in the effective tax rate was due to the tax impacts related to the divestiture of our wholesale tire locations and tire distribution operations as well as the revaluation of deferred tax balances due to changes in mix of pre tax income in various U S state jurisdictions because of the divestiture.
Net income was $12 5 million.
As compared to $15 7 million in the same period last year <unk>.
Diluted earnings per share was <unk> 37 <unk>.
Compared to <unk> 46 for the same period last year.
Adjusted diluted earnings per share a non-GAAP measure was <unk> 42 in the quarter and excluded <unk> <unk> per share of gain on the sale of our wholesale tire locations and tire distribution assets net of closing costs and costs associated with the closing of our related warehouse and excluded <unk> <unk> per share of certain discrete tax item.
Related to the sale as well as the revaluation of deferred tax balances due to changes in the mix of pretax income in various U S state jurisdictions again because of the divestiture.
This compares to adjusted diluted earnings per share of <unk> 55 for the same period last year, which excluded <unk> <unk> per share of costs related to onetime litigation settlement costs <unk> <unk> per share of acquisition due diligence and integration costs and <unk> per share of benefit from an adjustment to the estimate for prior year store closing costs.
As highlighted on slide nine we continue to maintain a very solid financial position, we generated a record $77 million of cash from operations during the first quarter, including $48 million and working capital reductions, we received $62 million in divestiture proceeds of which 5 million.
Are currently being held in escrow, we invested $8 million in capital expenditures spent $10 million in principal payments for financing leases and distributed $9 million in dividends Lastly, under our board authorized share repurchase program, we repurchased approximately $17 million of our common stock at.
The end of the first quarter, we had bank debt of $110 million cash and cash equivalents of $31 million and a net bank debt to EBITDA ratio of four times.
While we are not providing guidance for fiscal 2023, we are providing color to assist in your modeling.
Note that our comments for the remainder of fiscal 2023 factor and a divestiture, which generated about $115 million in sales in fiscal 2022.
We expect the ongoing impact from the divestiture to be accretive to overall gross and operating margin and neutral to earnings per share.
As we have made investments in store labor to drive higher year over year sales. This will continue to put pressure on our gross margins in fiscal 2023, which should be more than offset by the divestiture of our lower margin wholesale tire locations.
A higher percentage of service sales in our retail locations and pricing actions.
Total operating expenses are expected to be slightly higher as a percentage of sales on a year over year basis. As a result of that divestiture of the wholesale player locations.
Our tax rate should be approximately 25% for the remainder of fiscal 2023.
Regarding our capital expenditures, we expect to spend approximately $40 million to $50 million in fiscal 2023.
In addition to the operational improvements that we expect to benefit our sales and earnings. We also expect an improvement in our operating cash flow generation. This improvement will be driven by improved profitability as well as continued working capital reductions, we believe that our balanced approach of returning capital to shareholders as well as completing <unk>.
<unk> enhancing acquisitions will meaningfully increase our return on invested capital.
And with that I will now turn the call back over to Mike for some closing remarks.
Thanks, Brian we're optimistic about our outlook for the remainder of fiscal 2023 and beyond.
Although we still have important work to do we strongly believe that we remain well positioned to execute our growth strategy and deliver long term value creation for our shareholders.
Before we move to questions two topics I wanted to briefly address.
First our governance structure.
We have been consistent in our disclosures regarding the company's dual class capital structure and the fact that the company does not have the right nor powered to unilaterally recapitalized its equity capital structure.
Second I wanted to be clear that the board is more than aware of its fiduciary duties as well advised and we will continue to act in the best interest of all shareholders and in compliance with securities laws.
With that I will now turn it over to the operator for questions on our quarter.
Thank you Andrew.
To ask a question that you can press star one on your telephone keypad.
So its drilling a question you May press star two piece and show you Amit it likely when asking your question and please Tonight, we will be limiting each analyst to one question and one follow up question. Thank you.
Yeah.
First question for say comes from Daniel <unk> from Stephens, Inc. Daniel Your line is open.
Yeah, Hey, good morning, guys. Thanks for taking my question.
Good morning morning.
I wanted to start on the tire category you saw a nice acceleration on a one and two year stack and I think in the prepared remarks, you mentioned that unit market share increase could you break down that comp increase and talking about how much of that was ticket.
Versus price inflation and on share how are your strongest markets doing unit share increasing in all your markets or I'm, just curious kind of how that how ubiquitous that unit market share growth has been across the country.
Thanks, Glenn let me on.
On the market share and I'll speak specifically around tires, but I also would like to introduce parts.
At the same time, because there might be other follow up question on market share. So I separate market share. We have good data industry data all about tires. So I have a good how we're doing with tires. We don't have that same view with parts and service categories, but to be going in trying to answer all your questions around tire category. We saw we saw growth.
Thank you if you'd like to ask a question that you can press star one on your telephone keypad to withdraw. Your question you May Press Star two please ensure you're on mute locally when asking your question I am pleased Tonight, we will be limiting each analyst to one question and one follow up question. Thank you.
Across the market across the country, but we really saw a nice.
I would say a significant change in the south southeast and also the northeast.
Our first question for today comes from Daniel <unk> from Stephens, Inc. Daniel Your line is now open.
<unk> had a nice.
First quarter so.
Now looking at overall market share the industry units wise were significantly down in the first quarter.
Yeah, Hey, good morning, guys. Thanks for taking my question.
Good morning morning.
We were down also we were able to optimize with price. It was we don't want to get into the specifics, but it was all driven through price. So when I look at the 5% comp.
Mike I wanted to start actually on the tire category you saw a nice acceleration on a one or two years back and I think in the prepared remarks, you mentioned that unit market share increase could you break down the comp in Greece and talking about how much of that was ticket versus price inflation and on share how are your strongest markets doing unit share increasing it.
I am happy with the 5% comp I was expecting much better numbers. It seemed like we were moving through the month of May.
A good way and then all of a sudden things slowed down and I feel like the customer was definitely affected.
All your markets or I'm, just curious kind of how that how ubiquitous that unit market share growth has been across the country.
Starting in the early parts of June .
I do believe that's deferred maintenance and very much way I mean, we started seeing customers trade down from four <unk> to two times to one tier I do believe that just like in servicing all of that is going to be deferred and I look forward to those customers coming back because those services still need to be provided.
Thanks, Dan let me.
On the market share and I'll speak specifically their own tires, but I also would like to introduce parts at.
At the same time, because there might be other follow up question on market share. So I separate market share. We have good data industry data all about tires. So I have a good how we're doing with ours. We don't have that same view with parts and service categories, but to be trying to answer all your questions around tire category. We saw we saw growth.
Got it that's really helpful. And then on the kind of initiatives and staffing you mentioned you are towards the tail end of staffing, but then Mike you talked a little bit about employee training you guys are working on kind of in store training curious where we're at in that initiative.
Across the market across the country, but we really saw a nice.
I would say a significant change in the south southeast and also the northeast.
And then what are the margin implications, we should think about.
As you guys rolled that out and how does the team responding how are the teammates responding to being asked to do more kind of changed their day to day operations in the stores. Thanks, so much.
Really had a nice <unk>.
First quarter. So now looking at overall market share the industry units wise were significantly down in the first quarter.
Yes.
Really a question because it is a big portion of us.
We were down also we were able to optimize with price wars.
What we're trying to do here is really be a best in class service retailer and it's all about having trained associates to be able to take care of our customers. The first time properly.
We don't want to get into the specifics, but it was all driven through price. So when I look at the 5% comp.
Although I'm happy with the 5% comp I was expecting much better numbers. It seemed like we were moving through the month of May.
Just like any retailer that's a challenge to make people do different things and actually expand something out of their comfort level.
And a good way and then all of a sudden things slowed down and I feel like the customer was definitely affected.
It's been part of our agenda for a longtime I would say, it's really coming to life recently, everybody on one consistent way of how we greet a customer how we answer the phone how we service a vehicle I've talked about in the past a courtesy inspection how do we perform a courtesy inspection on every vehicle.
Starting in the early parts of June .
I do believe that's deferred maintenance and very much wait I mean, we started seeing customers trade down from four tires to two tires to one tier I do believe that just like in servicing all of that's going to be deferred and I look forward to those customers coming back because those services still need to be provided.
<unk> and <unk>.
I don't think we have a lot more work to do there we really do I would say that's a significant opportunity for us we're investing in technology to help augment that.
Got it that's really helpful. And then on the kind of initiatives and staffing you mentioned you are towards the tail end of staffing, but then Mike you talked a little bit about employee training you guys are working on kind of in store training curious where we're at in that initiative.
Really start focusing on people who are not following them on rollout.
The good news is I would say that the majority of our teams see where we're going there are actually benefiting from the training. They are actually doing additional services like check engine light.
And then what are the margin implications, we should think about.
As you guys rolled that out and how is the team responding how are the teammates responding to being asked to do more kind of changed their day to day operations in stores. Thanks, So much.
Monro has not been a destination in the past, but it's coming to life in a better way.
Anything that we touch with regards to service categories has a significant positive improvement in our gross profit.
Yes.
That's a really question because it's a big portion.
And it flows right through to the bottom line.
What I, what we're trying to do here is really be a best in class service retailer and it's all about having trained associates to be able to take care of our customers. The first time properly. So just like any retailer that is a challenge.
That is our focus having a nice balanced approach really focusing on new categories.
And it all comes to life with our training initiatives.
Great well best of luck. Thanks for the question Ben.
People do different things and actually expand something out of their comfort level.
Thank you.
Question comes from Brian Nagel from Oppenheimer, Brian Your line is now open.
It's been part of our agenda for a long time I would say, it's really coming to life recently, everybody on one consistent way of how we agree to customer how we answer the phone how we service a vehicle I've talked about in the past the courtesy inspection how do we perform a courtesy inspection on every vehicle I mean.
Hi, good morning.
Good morning, Steve.
So a few questions on top line kind of maybe merge them together, but.
If I can so firstly.
Mike going back to the prepared comments in talking about the initiatives I just want make sure I kind of understand correctly. So.
I don't think we are.
A lot more work to do there we really do I would say that's a significant opportunity for us we're investing in technology to help augment that.
I think I hear you, saying.
The historically underperforming stores, where you put these labor labor initiatives in there you've seen a nice response in sales performing well with the laggards are now.
We're really start.
Focusing on people who are not following them on rollout.
Better.
The good news is I would say that the majority of our teams see where we're going there are actually benefiting from the training. They are actually doing additional services like check engine light Monro.
Performance historically better performance towards so I just wanted to understand that dynamic correctly and then my question on that would be that is that so as you look at that are there.
Are there other initiatives you can put in place in the stores that had historically been better performing to drive a better performance there.
Monro has not been a destination in the past, but it's coming to life in a better way and.
Anything that we touch with regards to service categories has a significant positive improvement in our gross profit.
You got it Brian So all of our stores actually saw deceleration we were coming off a strong growth in may.
And it flows right through the bottom line.
That is our focus having a nice balanced approach really focusing on new categories.
And I was really optimistic about.
Where the customer where the company was going so we saw a lot of these come to light led by our small stores and it's all about the small stores really changing year over year declines and we talked about staffing and we've talked about training really emphasizing that these stores are good stores. They just have they need more attention. So we put more attention and they responded and our customers responded.
And it all comes to life with our training initiatives.
Great well best of luck. Thanks for your question Daniel.
Thank you. Your next question comes from Brian that Nagel from Oppenheimer, Brian . Your line is now open.
Hi, good morning.
Good morning, Steve So a few questions on top line kind of maybe merge them together, but.
Immediately.
Now coming into June I would say.
If I can so firstly this is Mike.
It's just the challenge that.
The consumer base when we look at vehicle miles traveled I think the consumer.
Mike going back to the prepared comments in talking about the initiatives I just want make sure I kind of understand correctly. So.
Our prepared remarks, I do reflect back I mean, the consumer definitely started changing their buying behaviors from may to June and then into July I do believe all of that is going to come back. The good news about our the automotive aftermarket we still going to have to service your vehicle.
I think I hear you, saying.
Historically underperforming stores, where you put these labor labor initiatives I mean, there you've seen a nice response in sales performing well with the laggards are now.
The better the better performance than historically better performing doors. So I just wanted to understand that dynamic correctly and then my question on that would be that is that so as you look at that.
So that's all going to be deferred and we're very much prepared and focused on getting ready for that we're putting our marketing initiatives, whether we're focusing on training, we're focusing on are properly staffing our stores.
Are there are there are there initiatives you've been putting in place in the stores that had historically been better performing to drive a better performance there.
<unk>.
And we wanted to take advantage of when that customer comes back and all of our stores.
Got it Okay and then my father, so with regard to inflation and clearly Thats a.
You got it Brian So all of our stores actually saw deceleration we were coming off a strong growth in may.
Topic that we're discussing across across consumer at this point because you look at maybe the impacts you're starting to see more.
And I was really optimistic about.
Where the customer where the company was going so we saw a lot of these come to life led by our small stores and it's all about the small stores really changing year over year declines and we talked about staffing and we talked about training really emphasizing that these stores are good stores. They just have they need more attention. So we put more attention and they responded and their customers.
Intensifying impact you're seeing on your business do you think it's more of the consumer reacting to broadly based inflation or is it inflation specifically within.
Your category Youre pricing and then I guess my question would be there are there actions you could take to help offset that.
Yes.
Absolutely believe its broad based because in our purchasing actions, we've actually gone the opposite direction, we're actually offering and I've talked about this in the past offering good better best introducing value, where we didn't have before so I actually I am trying to meet that.
Funded immediately.
Now coming into June I would say it.
It's just the challenge that.
The consumer base when we look at vehicle miles traveled I think the consumer in my prepared remarks, I do reflect back on I mean, the consumer definitely started changing their buying behaviors from may to June and then into July I do believe all of that is going to come back. The good news about the automotive aftermarket you're still going to have to service your vehicle.
They are 40% of the customer base that we.
It could be really effective increase in gas.
They are very similar customer to most of the retailers that are going hopefully right. Now. So we are very focused on driving value and making sure that we have a value offering for all of our categories tires brakes be oil it would be the three that I can easily talk about.
So thats all going to be deferred and we're very much prepared and focused on getting ready for that we're putting our marketing initiatives, whether we're focusing on training, we're focusing on are properly staffing our stores and.
But what we're looking at really is I would say, especially with the syndicated data they have on tires things changed around the tire comp and I think that is very much in parallel to service categories.
And we wanted to take advantage of when that customer comes back and all of our stores.
Got it Okay and then my father, so with regard to inflation and clearly Thats a.
Topic that we're discussing across across consumer at this point because you look at maybe the impacts you're starting to see more.
Okay and then one final question I'll keep it quick I, Chris Albrecht colors.
I know we're watching this.
Intensifying impacts you're seeing on your business do you think it's more of the consumer reacting to broadly based inflation or is it inflation specifically within.
Painful real time, frankly, but with regard to gas prices gas prices starting to moderate off recent recent peaks or is that are you seeing any type of.
Your category your pricing and I guess the question would be there are there actions you could take to help offset that.
So to say improvement or is it.
Yep.
Yes.
Absolutely believe its broad based because in our purchasing actions, we've actually gone the opposite direction, we're actually offering and I've talked about this in the past offering good better best introducing value, where we didn't have before so I actually im trying to meet that.
Brian maybe I can ask maybe you can jump in on this one.
I would say Brian that we are certainly I think you can see vehicle miles traveled responding generally to gas prices, we've seen that kind of along the way, but as Mike. There is general inflationary pressures on the consumer more share of their wallet is going to food to shelter and certainly still.
They are 40% of the customer base that we have could be really affected increase in gas.
Theyre very similar customer to most of the retailers that are going hopefully right. Now. So we are very focused on driving value and making sure that we have a value offering for all of our categories tires brakes be oil would be the three that I can easily talk about.
Year over year gas, even though it has come down sequentially. So.
I think have created some pressure as Mike said on some of our larger ticket categories, certainly tire being the largest.
Got it thanks, guys appreciate all the color.
But what we're looking at really is I would say, especially with the syndicated data.
Alright, thank you.
Thank you.
Have on tires things changed around the tire.
If you'd like to ask a question Thats star one on your telephone keypad.
I think that is very much in parallel to service categories.
Our next question comes from Bret Jordan of Jefferies. Bret Your line is now open.
Okay and then one final question I'll keep it quick I, Chris Albrecht colors look I know we're watching this thing.
Hey, good morning, guys.
Good morning.
Painful real time, frankly, but with regard to gas prices gas prices have started to moderate off recent recent peaks.
Good morning, you commented about tire share gain in that in that comp could you talk about I guess within the broader comp other categories, how you see yourselves versus from a market share standpoint.
Are you seeing any type of.
So to see improvement or is it been step.
Yep.
Yes.
Just like our responded.
Brian maybe I can ask maybe you can jump in on this one.
I'm happy that we took comp I'm not happy with our overall number so even though we definitely had higher expectations I don't really have any strong comp.
Yes, I would say Brian that we are certainly I think you can see vehicle miles traveled responding generally to gas prices, we've seen that kind of along the way, but as Mike. There is general inflationary pressures on the consumer more share of their wallet is going to food to shelter and certainly still.
Anything to look at market share on the other service categories.
I can only say that we're not happy with our results.
And we're very much focused on mid single digits, so anything less than mid single digits I'm not happy.
Year over year gas, even though it has come down sequentially. So.
And I look at that for basically across all major categories, including batteries, including breaks including oil change I mean, that's what we're focused on and last but not least it needs to be a balanced approach I want more ticket.
I think it created some pressure as Mike said on some of our larger ticket categories, certainly tire being the largest.
Got it thanks, guys appreciate all the color.
Like ticket, but I also want a balanced approach with customers and I really do we have an opportunity at monro to get a consistent both in customer ticket at the same time and I shared with you in the future.
Alright, thank you.
Thank you.
If you'd like to ask a question Thats star one on your kind of thing keypad.
Our next question comes from Bret Jordan of Jefferies Bret your.
How was that $2 eight stacked ticket versus versus traffic count.
Your line is now open.
Hey, good morning, guys.
Without getting into.
Good morning.
Good morning, you commented about tire share gain.
Specifics it was led by an increase in ticket.
And a decrease in traffic.
In that in that comp could you talk about I guess within the broader comp other categories, how you see yourselves versus from a market share standpoint.
Okay, and then I guess a question on the cat in the working capital reduction.
Picked up 48 million Bucks on working capital you talked about more could you sort of give us a ballpark size of it.
Yes.
Just like our responded I'm happy that we took Tom I'm not happy with our overall number so even though we definitely had higher expectations I don't really have any strong comp.
Left in working capital that we could see in the cash flow this year.
Yes.
A lot of work there.
In order to capture additional working capital improvements and we are certainly.
The thing to look at market share on the other service categories.
<unk>.
Committed to driving that and expect to do it but I'm not going to provide a.
I can only say that we're not happy with our results.
And we're very much focused on mid single digits, so anything less than mid single digits.
A range or a guide on that but what I would say is we saw record cash flow in Q1.
Happy.
And I look at that for basically across all major categories, including batteries, including breaks including oil change I mean, that's what we're focused on and last but not least it needs to be a balanced approach I want more ticket.
Record operating cash flow driven by that working capital reduction and we expect that.
Continued improvements there will continue to benefit and we would expect to put up near or record cash flow number.
Ticket, but I also want a balanced approach with customers and I really do we have an opportunity at monro to get a consistent both in customer and ticket at the same time and sharing that with you in the future.
We move through fiscal 2023.
Okay, and then Brian can I get the housekeeping question of the quarterly I'm, sorry, the monthly comps in the quarter.
Yes, it was about flat in April almost six <unk> and two in June .
How was that $2 eight stacked ticket versus versus traffic count.
Okay, great. Thank you.
Thanks, Brian .
Without getting into.
Thank you we have no further questions for today, so I'll hand back to the management team for any further remarks.
Specifics it was led by an increase in ticket.
And a decrease in traffic.
Okay, and then I guess a question on the cabinet working capital reduction.
Thank you for joining US today. This continues to be an exciting time to be part of Monro. We have a strong foundation to build upon to create long term value for all our stakeholders I look forward to keeping you updated on our progress have a great day.
Picked up 48 million Bucks in working capital and you talked about more could you sort of give us a ballpark size of it.
Often working capital that we could see in the cash flow this year.
Yes.
A lot of work there.
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In order to capture additional working capital improvements and we're certainly.
Committed to driving that and expect to do it but I'm not going to provide us.
Our Ranger a guide on that but what I would say is we saw record cash flow in Q1.
Record operating cash flow driven by that working capital reduction and we expect that.
Continued improvements there will continue to benefit and we would expect to put up near or record cash flow numbers.
Move through fiscal 2023.
Okay, and then Brian can I get the housekeeping question on the quarterly I'm, sorry, the monthly comps in the quarter.
Yes, it was about flat in April almost six <unk> and two in June .
Okay, great. Thank you.
Thanks, Brian .
Thank you we have no further questions for today, so I'll hand, it back to the management team for any further remarks.
Thank you for joining US today. This continues to be an exciting time to be part of Monroe, we have a strong foundation to build upon to create long term value for all our stakeholders I look forward to keeping you updated on our progress have a great day.
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Okay.