MNRO
#I think coming off of last year and Q4 with the start we have had, we are trying to put a number out there that we can hit.
I think that is a big piece of it.
And what I am looking for is to show that the inflation that we have on the tire side will stick, and that the initiatives that we've got underway will help us produce traffic and sales.
So I guess we're going to make sure that we are reasonably conservative given what we have got at the start of this year, which is a April that is down on top of a positive last year, and May that is ahead.
Yes.
They are within our markets.
And they, as I have said in the past, that 10 level has represented more than one year of growth, and certainly us having more than that still qualifies as well more than one year of growth.
We see a lot of interest from independent dealers right now in transactions.
Yes, generally that is the case.
Yes, <UNK>, I would tell you that as we have said in the past, we are interested in anything that is at the right value for our shareholders.
But we don't comment on rumors that might be swirling around.
It is more of a shift.
We are shifting ---+ what we're finding in the digital area is that we are getting more efficiency out of our spend.
We certainly needed to add some resources in terms of capability to our team, and we have done that.
Again, globally, as more of a shift in spend than an increase.
I think when you look at it, that relates to the FY14 and 2015 acquisitions.
The 2013 are within, sorry, the FY13 acquisitions were in our comps this year.
So perhaps a bit of that is some comp pressure on those.
But if you look at the 5% that we did in FY14 and the 10% that we did in FY15.
And you look at those numbers, I think you will find it ties into the $0.09 to $0.12 accretion.
It's that accretion standard that we give for the 10% acquisition growth.
Sorry, I need to be specific in that.
If you want to think about it that way, we again, this year have a 1% comp hurdle rate for accretion on the comp store sales side.
So we are ---+ the business is producing that 1% hurdle rate instead of the 2% to 2.5% rate, and that is a follow-on benefit from those prior acquisitions.
So with regard to the purchase price, we do not disclose that.
We do have to file reports and things where some of that information may be a part of.
But with regard to the opportunities with franchise locations going forward, our primary objective is to go in, improve the business with what we have developed for our 1,000 stores.
I think one of the difficulties of franchise systems themselves is that from time to time, there is a need to operate stores.
And I think, certainly, as we look at it, we view ourselves as much better place to do that effectively than at least the prior situation with regard to the Car-X stores.
Tire units were down 1% in the fourth quarter.
Flat.
It is about $11 million, <UNK>.
In general, for the 5 to 40 store deals that we have been executing on, there is no change in the multiples that we've seen.
No.
I'm sorry, I said there was no change in the multiples that we've seen.
Maybe I didn't understand your question.
For those deals, we haven't seen anything significant in terms of new entrants into that consolidation area.
First of all, that, I guess the way we see growing profit there is primarily through opening new locations.
There is interest in the franchisee group to open new locations.
We can support that, and we can have a significant impact on the EBITDA out of that business by opening a reasonable number of new locations.
Again, leveraging what we've built and we maintain here for our 1,000 store chain.
So very efficient for us, and a very high return for us.
So with regard to where we stand versus the competition, of course, we see a lot of details from competitors in the acquisitions or the NDAs that we are involved with.
So no, I don't think we're losing ground to the competition.
Again, the building block for me is oil change traffic, and that has been positive for the last two years.
What we are looking at is the opportunity to really offset some of that ---+ some of those dynamics in the marketplace that cause choppier sales.
And frankly, I think we can do a better job.
We recognized that in order to get there, we needed some additional experience and help internally.
And our team has really come together around that.
With some of those firsts for Monro, they will definitely put us ahead of most of our competitors.
So it is really more than anything a reaction to the fact that we operate in a fragmented market.
And we never ---+ we've had deflation over the last couple years, and we just haven't produced ---+ that's held back the comps some.
I think with that deflation turning around, we can build off the positive oil change traffic that we have had that produced positive comps this year.
They've maintained a steady state where they are right now.
Again, we think that there is opportunity to expand from there.
It was mostly traffic, overall traffic was down in the quarter due to the disruption that we talked about.
So that was the biggest piece for the quarter.
For next year, like we said, most of the comp is pricing, and ticket is basically flat to slightly positive with tires, as I said earlier, being flat as a part of it.
No, it was basically flat.
It was really mostly traffic in the fourth quarter.
I think you should focus ---+ again, we made the comment that the fourth quarter was the highest gross profit dollar quarter for us.
And I think again, we've given you the profitability metrics and some of what I gave in the script.
$1 of gross profit is equal to $0.05, 1% value is equal to $0.025.
You've got the operating margins at the midpoint.
So I think you have got ---+ those are the elements we were looking to give you to allow you to build it from there.
No.
So, yes, those stores are on the average of what our service stores are, which is between $600,000 and $700,000 a store.
We gave you an EBITDA number, so the EBIT margin is high.
You can probably back into what our revenue might be or in that range and use that EBITDA to get there.
We also said it's going to be slightly accretive this year, so you shouldn't be building in significant contribution this coming year from Car-X.
If you look at what I gave you in the script, I think you'll have the elements to come back to a revenue number.
The royalty there will be basically all of our revenue.
So it's not more ---+ it's that simple.
We do have some opportunities going forward to sell some parts based on our ability to source at very attractive costs for them.
But really, the most significant piece of the revenue will be the royalty.
The first was ---+ we don't have a contract requiring them to buy.
They are free to buy from whom they choose.
We think we have a lot of compelling things to offer them.
Secondly, we do not have any dollars baked in to next year.
And I wouldn't suggest that any significant number of dollars be baked in to next year.
So that guidance will ---+ it doesn't incorporate that.
And third, because we're not working in numbers for the guidance, we're not going to talk about what we would sell to them.
And I think you could expect that we might have transfer costs that will be similar to what we have to our own stores [which are] attractive.
Thank you.
Thank you all for your time this morning.
I am looking forward to sharing our successes in driving traffic and sales through our new initiatives with you, as well as the growth we expect through acquisition opportunities we are actively working on.
Our business model should produce another year of double digit EPS growth, on top of the 40% increase over the past two years.
We appreciate your continued support and the efforts of our employees that work hard to take care of our customers every day.
Thanks again, and have a great day.
