Monro, Inc.

Good morning, ladies and gentlemen, and welcome to Munro Inc's earnings conference call for the third quarter of fiscal 2026. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the call, please press star followed by zero on your touch-tone phone. 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 Wechsler, Vice President 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 investor section of our website at corporate.monroe.com forward slash investors. If I could draw your attention to the Safe Harbor Statement on slide two, I'd like to remind participants that our presentation includes some forward-looking statements about Monroe's 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 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 are included as part of today's presentation and in our earnings release. With that, I'd like to turn the call over to Monroe's President and Chief Executive Officer, Peter Fitzsimmons.

Thank you, Felix, and thanks to everyone for joining us. Great to be with you today. This morning, I'd like to update you on our progress and the momentum we've continued to build at Monroe during our fiscal third quarter. As we have done before, I will focus on the four key areas identified as opportunities for performance improvement, which are shown on slide three of our presentation materials. As a reminder, these are driving profitable customer acquisition and activation, improving our store-based customer experience and selling effectiveness, increasing merchandising productivity, which includes mitigating tariff risk, and real estate dispositions related to the previous closure of 145 underperforming stores. After that, I'll briefly touch upon our fiscal third quarter results, which represent another step forward as we continue to implement our performance improvement plan to enhance Monroe's operations, drive profitability, and increase total shareholder returns. Let's start with driving customer acquisition and activation. During the third quarter, we continued to advance our acquisition marketing efforts through the expansion of a multi-channel digital media plan to target high value potential audiences. We expanded marketing to more than 340 additional store locations in the third quarter while maintaining a disciplined phase rollout to ensure appropriate returns. We also completed an operational readiness assessment to determine which stores were best positioned to receive marketing support. As part of these efforts, we implemented a measurement framework that provides visibility into marketing's impact on key performance indicators, including calls, sales, and gross profit dollars. We also continued to activate Monroe's Customer Relationship Marketing, or CRM, database to attract existing customers to revisit our stores through specific offers for additional services that would improve the overall safety of their vehicles. And as a third component of our marketing efforts, we have added call center support to 114 additional store locations. We now have more than 830 stores benefiting from our customer call center, and we expect to add the remainder of our stores in the near future. Now let's discuss the things we are doing to improve the customer experience and selling effectiveness in our stores. As we've previously communicated, during the third quarter, we continued to work toward expanding the usage of our Confidrive inspection tool on every customer vehicle visiting our stores. We worked closely with all of our technicians to ensure the accuracy and full completion of every inspection, every time. This has allowed our store managers to provide our customers with a window into the overall condition of their vehicle, both from the standpoint of what is operating well and what things might need some attention. Our goal is to provide transparency and ensure that we hand back the keys to a safer vehicle when we return it to the customer. Last quarter, we indicated that we had completed a field realignment to right size and streamline our field management following the closure of 145 underperforming stores. While this resulted in an overall reduction of district managers, it has also resulted in an overall increase in the quality of district managers across the chain. Our streamlined and agile field organization enables us to communicate faster within our field network, which has improved our ability to serve guests more quickly and more effectively. Further, we've created and now implemented useful analytical tools, such as the district manager toolkit, as well as a labor force optimization capability that enables our field leaders to better develop our store-based teammates. Finally, We've made an investment in a team of field compliance support specialists whose work enables us to reduce the volume of certain administrative tasks previously handled by our district managers. This allows our field leadership to focus more of their time on training and coaching our store teams. Now let's turn to merchandising, including mitigating tariff risk. In the third quarter, we continued to build out our foundational vendor and assortment strategy. In our tire category, we focused heavily on ensuring inventory availability to present a well-developed product assortment to our guests during the fall and early winter selling season. As the weather changed, we leveraged our strong supplier and distributor relationships to expand availability where needed, to deliver the right products to our customers in each of our tire tiers. As we approach mid-winter, we are refining our tire assortment for the next selling season with an emphasis on achieving our objective to narrow our overall tire assortment to better serve customer needs. At the same time, we also continue to modify our assortment and availability of stock parts so that we can continue to be well prepared to grow our service business. As it relates to tariffs, we continue to carefully manage their impact on our overall product acquisition cost and on our market pricing. So far, and as communicated earlier, tariffs have not been as significant on either our customer pricing or our product cost as we anticipated when higher tariffs were first announced. Generally, we've been able to strike the right balance between costs and price adjustments, which has enabled us to maintain solid gross margins in an uncertain economic environment. We believe this positions us well moving forward. And finally, just to provide an update on closed store real estate dispositions, following the closure of 145 underperforming stores in the early part of this fiscal year, we initiated a process to exit the real estate at these locations, which included 40 stores that we own. During the third quarter, we exited 32 leases and sold 20 owned locations, which resulted in proceeds of $17.3 million. This brings us to a total of 57 leases exited and 25 locations sold, resulting in cumulative proceeds of $22.8 million fiscal year to date. As a reminder, this process is expected to generate positive cash flow and be largely completed during the next few quarters. Importantly, and as discussed previously, this enables us to focus on improving performance in our continuing locations in the fourth quarter of fiscal 2026. Now, let me briefly touch on several key highlights of our fiscal third quarter results, which Brian will cover in more specific detail in just a few moments. Turning to slide four of our presentation materials, after we saw some softness in consumer demand in October, the Monroe team drove growth in comparable store sales in November and December. Further, when adjusting for a shift in the timing of the Christmas holiday in the prior year, The months of November and December, as well as the third quarter, marked the first time we delivered positive comps on a two-year stack in over two years. This has also enabled us to report our fourth consecutive quarter of positive comps for the first time in several years. We believed we were able to take share in our tire category as soon as winter hit, as our stores were well prepared with proper staffing, an updated tire assortment, and additional marketing spent. In addition, for the second quarter in a row, we delivered solid gross margin performance, this time with a gross margin rate that expanded 60 basis points year over year to 34.9%. We also reinvested the selling, general, and administrative expense savings from our closed stores into additional marketing to support top-line growth. Lastly, for the third quarter in a row, we reduced inventory levels across the system, this time by over $7 million. We've now achieved an overall inventory reduction of more than $28 million, which is 16% since the end of March, just nine months ago. This is a clear indication of how we've continued to manage our inventories more efficiently in fiscal 2026. Our sales momentum has continued into fiscal January with preliminary comp store sales up almost 1%. Looking forward and coupled with our increased marketing spend, we believe higher expected consumer tax refunds should provide a tailwind to top line trends for the remainder of fiscal 2026. We continue to expect to deliver positive comp store sales for the full fiscal year. To summarize, We are pleased with the progress we've made implementing our four key areas of focus, which is allowing us to build momentum in our business. Two of the key areas of focus for fiscal 2026 are largely complete, with the successful closing of 145 underperforming stores and associated real estate monetization, as well as the strengthening of our merchandising team. Optimizing our marketing investment in improving our store performance will remain important activities for the remainder of fiscal 2026. Our fiscal third quarter results serve as another positive step toward accelerating the pace of the company's performance improvement, as well as better capitalizing on positive industry trends to unlock Monroe's full potential. Before I hand the call over to Brian, I want to thank our more than 6,000 valued Monroe teammates in our 1,115 stores for their hard work every day and night serving our customers. I also want to recognize and thank our leadership team. During the last nine months, we have meaningfully added or promoted talented colleagues in nearly every critical area, among them merchandising, marketing, stores, and finance. we are well positioned to continue our positive momentum. And with that, I'll now turn it over to Brian, who will provide an overview of Monroe's third quarter performance, strong financial position, and additional color regarding the remainder of fiscal 2026. Brian?