Monro Muffler Brake, Inc. F1Q09 (Qtr End 06/28/08)Earnings Call Transcript

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2008-07-24 14:40:22.0

Tags: Monro Muffler Brake Inc.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Scott Stember, from Sidoti & Company. Please go ahead.

Scott Stember- Sidoti & Company

You talked about the price increases; can you just give us a little bit of a timeline? I think you guys are scheduled for another price increase with oil changes in December if I’m not mistaken.

Robert Gross

We are constantly evaluating everything. The September fliers went out with moving. I believe it was about a 100 stores up in oil to 2499 from 1999, everything else stayed the same with a number of stores staying at 1999. Now again a 100 more stores at the 2499 level and additional stores at a 2499 level with $5 mainland rebates which we continue to test and make sure again, very cognizant of not wanting to do anything to negatively impact the store traffic that we think the advertising programs are generating. So, that would be what is coming down the pipe and what's occurring this year.

Scott Stember- Sidoti & Company

Alright, and just moving over to book there it’s nice to see that you guys are making a good traction there on the operating line. Could you maybe talk about some of the areas where you’re noticing success and maybe talk about future opportunities to expand markets there?

Robert Gross

ProCare you’re talking about?

Scott Stember- Sidoti & Company

Yes.

Robert Gross

Yes, I think the starting point is the guys have done a real good job finally, getting the right people working in the stores and while we’ve been dissatisfied and feel it’s underperforming, remember it was other bankruptcy running minus 30 constantly, we’ve only owned it for two years so, the people are in place now.

If you remember we advertised in November for the first time when we thought we had the right people in place and we did. Those advertising programs went over the new name on the outside of the location and it takes some advertising to get the name recognition out there and to get customers back into those locations and we’ve really started that processes and earned it in April through June continuing now until the second quarter where we are comfortable driving the traffic into the store.

The labor productivity is better, the sales volumes are now starting to go up, so it reduces our occupancy cost and I think as Cathy said that’s where we picked up the 100 basis points in margin improvement.

 

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