Monro : Investor Presentation - March 2024

Monro, Inc. Investor Presentation March 2024

Safe Harbor Statement and Non-GAAP Measures

Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to our business plans and operating results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Monro has identified some of these forward-looking statements with words such

as "believes," "expects," "estimates," "outlook," "strive," "anticipates," "could," "may," "will," and the negative of these words

or other comparable terminology. These forward-looking statements are based on Monro's current expectations, estimates, projections and assumptions as of the date such statements are made, and are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. Additional information regarding these risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our most recently filed periodic reports on Forms 10-K and Form 10-Q, which are available on Monro's website at https://corporate.monro.com/investors/financials/sec-filings/default.aspx. Monro assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

In addition to including references to diluted earnings per share ("EPS"), which is a generally accepted accounting principles ("GAAP") measure, this presentation includes references to adjusted diluted earnings per share, which is a non- GAAP financial measure. Monro has included a reconciliation from adjusted diluted EPS to its most directly comparable GAAP measure, diluted EPS in Slide 8. Management views this non-GAAP financial measure as a way to better assess comparability between periods because management believes the non-GAAP financial measure shows the Company's core business operations while excluding certain non-recurring items such as costs related to shareholder matters from the Company's equity capital structure recapitalization, transition costs related to the Company's back-office optimization, corporate headquarters relocation costs, and items related to store closings, as well as acquisition initiatives.

This non-GAAP financial measure is not intended to represent, and should not be considered more meaningful than, or as an alternative to, its most directly comparable GAAP measure. This non-GAAP financial measure may be different from similarly titled non-GAAP financial measures used by other companies.

2

Company Overview

A Leading Chain of Independently Owned and Operated Tire and Auto Service Locations

Dominant in the Northeastern U.S.

Store locations as of 12/23/23

Expanding in Southern and Western markets

Fiscal 2023 sales of $1,325.4 million

1,296
company operated
stores in 32 states
51
franchised locations
33
acquisitions in the past
9 years adding
429 locations
and
$626M in revenue
and entry into
10 new states	3

Investment Thesis

Leading national

automotive service and tire

provider with 1,296 locations in 32 states

Well-positioned to

capitalize on a favorable

industry backdrop

Focus on operational	Scalable platform with
excellence to increase	significant growth
customer lifetime value	opportunity in acquisitions

Low-cost operator with	Strong balance sheet and
solid operating margins	operating cash flow

Commitment to driving

Monro.Forward

Responsibly

Delivering consistent shareholder returns through dividends & share repurchases

4

A Favorable Industry Backdrop

Favorable Industry Backdrop for Automotive Services

Despite a Decrease in Miles Traveled in 2020 Resulting from the COVID-19 Pandemic

U.S. Annual Light Vehicle Sales

20

18

16

14

12

10

8

6

4

2

0 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Source: FRED Economic Data, Light weight Vehicle Sales: Autos and Light Trucks (annual data)

Annual Vehicles Miles Traveled

3,300,000

3,225,000

3,150,000

3,075,000

3,000,000

2,925,000

2,850,000

2,775,000

2,700,000 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23

U.S. Light Vehicles in Operation (VIO)

290,000

280,000

270,000

260,000

250,000

240,000

230,000

220,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Auto Care Association Factbook

Key Highlights

• An overall growing trend in total vehicle population related to consumers owning vehicles longer
• 280+ million vehicles on the road
• Increasing age of vehicles (average of ~12 years)
• Increasing complexity of vehicles
• Vehicle miles traveled recovering from 2020 lows

Source: Office of Highway Policy Information Traffic Volume Trends Data, Moving 12-Month Total Vehicle Miles Traveled

5

A Favorable Industry Backdrop

Monro Operates in the $311 Billion Do-It-For-Me* Segment of $389 Billion U.S. Automotive Aftermarket Industry

Automotive Aftermarket DIFM vs. DIY Sales

450,000

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

2017	2018	2019	2020	2021	2022	2023
				DIFM		DIY
Source: Auto Care Association Factbook	Census data for 2017; estimates for 2018-2022; 2023 forecast

DIFM vs. DIY Trends

• DIFM continues to account for a significant percentage of the automotive aftermarket
• Vehicle complexity continues to drive shift to DIFM from
  DIY
• Future technology advances expected to accelerate shift to DIFM

		2014	%	2022	%	CAGR
		(outlets)	(outlets)
	Motor Vehicle Dealers	16,396	12.6%	16,773	12.3%	0.3%
	General Repair Garages	79,240	60.7%	85,424	62.7%	0.9%
	Tire Dealers	19,931	15.3%	20,424	15.0%	0.3%
	Specialty Repair	7,534	5.8%	5,795	4.3%	(3.2%)
	Oil Change/Lube	7,368	5.6%	7,693	5.7%	0.5%
	Total	130,469	100.0%	136,109	100.0%
Source: Auto Care Association Factbook	For 2022, all data are as of Q3 2022, except for Tire Dealers and Specialty Repair

Key Highlights

• Industry still highly fragmented, with significant opportunities for further consolidation

* Includes Replacement Tire Segment

6

Third Quarter Fiscal 2024 Highlights

Comparable Store Sales Decline Due to Customer Deferrals Causing Industry-Wide Slowdown in Tire Unit Sales

Quarterly Comparable Store Sales Trends

10%

5.6%

Monthly Comparable Store Sales Trends

15%
10.5%	FY23

5%

0%

4.5%

0.5%

10%	3.7%	7.9%		FY24
5%	3.5%
0%

-5%

-10%

-2.3%

-6.1%

-5%
-5.7%	-6.6%	-5.6%	-6.0%
-10%
		1

Q3FY23

Q4FY23

Q1FY24

Q2FY24

Q3FY24

Q3FY24

Key Highlights

• Sales decreased 5.2% to $317.7M, primarily due to lower tire unit sales
• Comp store sales decreased 6.1%
• Sales from new stores increased $1.0M
• Generated operating cash flow of ~$130M driven by profitability and working capital reductions

October

November

December

January MTD

Q3FY24

Key Highlights

• Product and service category performance:
• • Batteries: flat
  • Brakes: -1%
  • Service: -3%
  • Front End/Shocks: -5%
  • Alignments: -5%
  • Tires: -9%
• Service categories ~49% of sales compared to ~47% in the prior year period

1 Preliminary results through January 20, 2024

7

Third Quarter Fiscal 2024 Results

Laser Focused on Maximizing Profitability through Prudent Cost Control

		Q3FY24	Q3FY23	Δ
Sales (millions)		$317.7	$335.2	(5.2%)
Same Store Sales	(6.1%)	5.6%	(1,170) bps
Gross Margin		35.5%	33.8%	170 bps
Operating Margin	6.7%	7.1%	(40) bps
Diluted EPS		$.38	$.41	(7.3%)
Excluded Costs1	$.01	$.02
Adjusted Diluted EPS2		$.39	$.43	(9.3%)

1. Please refer to the reconciliation of adjusted diluted EPS in our earnings release for further details regarding excluded items in Q3FY24 and Q3FY23.
2. Adjusted Diluted EPS is a non-GAAP measure that excludes certain non-recurring items such as costs related to shareholder matters from our equity capital structure recapitalization, transition costs related to our back-office optimization, corporate headquarters relocation costs, and items related to store closings, as well as acquisition initiatives. A reconciliation of net income to adjusted net income and diluted EPS to adjusted diluted EPS is included in our earnings release dated January 24, 2024.

8

Solid Financial Position

Operating Cash Flow Supports Growth Strategy and Capital Return to Shareholders

Disciplined Capital Allocation

YTD Fiscal 2024

• Received ~$16M of divestiture proceeds
• Capex of ~$19M
• Spent ~$29M in principal payments for financing leases
• Paid ~$27M in dividends
• Repurchased ~1.5M shares of common stock at an average price of $28.50 for ~$44M

Strong Balance Sheet and Liquidity

• Generated operating cash flow of ~$130M during YTD fiscal 2024
• Net bank debt of ~$70M as of December 2023
• Net bank debt-to-EBITDA ratio as of December 2023 of 0.5x

9

Strategic Priorities

Capitalize on Growing Retail Demand to Sustain Long Term Growth

Driving productivity improvements and delivering sales growth in all Retail locations with a focus on ~300 of our small or underperforming stores

Generate significant cash flow through improved profitability and working capital reductions Continue to evaluate M&A opportunities as we invest for growth in our existing stores Capital return to shareholders through a healthy dividend program and share repurchases Further integrate ESG and Corporate Responsibility efforts into our strategy and operations

10