Monro : Second Quarter Fiscal 2021 Earnings Presentation

SECOND QUARTER FISCAL 2021 EARNINGS CALL OCTOBER 28, 2020

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 "anticipates," "believes," "expects," "estimates," "is likely," "predicts," "projects," "forecasts," "may," "will," "should," and

"intends" 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, to include the significant uncertainty relating to the duration and scope of the COVID-19 pandemic and its impact on our customers, executive officers and employees. 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/financial-information/. 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 and items related to our Monro.Forward or 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

Second Quarter Fiscal 2021 Overview

Executing Our Strategy To Position Monro For Long-Term Success

Given continued challenges in the operating environment, focused on profit and cash flow through:

Right-sizing the business to
	Driving variable margin			Executing targeted cost
match demand:			improvement:			reductions:
 Store hours of operation			Tire category			Store management staffing
 Store staffing levels			Service labor productivity			Marketing efficiency
						Overhead reductions

Generated strong cash flow to support business operations and growth strategy

Resumed store rebrand and reimage initiative with the transformation of approximately 40 stores Executed M&A strategy with definitive agreement to acquire 17 stores

3

Second Quarter Fiscal 2021 Sales Highlights

Focused on Aspects of The Business Within Our Control as Demand Remains Soft

Quarterly Comps Trends

5%
0%
	Q2FY20		Q3FY20		Q4FY20		Q1FY21		Q2FY21
-5%
-10%
-15%
-20%
-25%
-30%

Q2FY21

Key Highlights

• Comparable store sales of -11.4% due to ongoing COVID-19 headwinds
• Sales from new stores added $9.4M, including sales from recent acquisitions of $8.4M
• Generated strong operating cash flow of ~$126M in the first half of fiscal 2021 driven by profitability and strong working capital management

1Preliminary results through fiscal October ended October 24, 2020

Monthly Comparable Store Sales

0%
-2%		Jul-20		Aug-20		Sep-20		Oct-201
-4%
-6%
-8%
-10%
-12%
-14%

Q2FY21

Key Highlights

• Sequential comps improvement in all product and service categories, with tires outperforming all other categories
• • Tires: -3%
  • Alignments: -16%
  • Maintenance: -19%
  • Front End/Shocks: -19%
  • Brakes: -24%

4

Market Backdrop

Monro Comp Sales and Tire Units Have Correlated with VMT as Well as U.S. Tire Retail Industry (Units)

15%	Monro Comp Sales	Monro Tire Units	Veh. Miles Traveled (U.S.)	U.S. Tire Retail Industry (Units)

5%

-5%

-15%

-25%

7/11

7/18

7/25

8/1

8/8

8/15

8/22

8/29

9/5

9/12

9/19

9/26

10/3

10/10

Week Ending

Data Sources:
	Vehicle Miles Traveled - Arity	5
	U.S. Tire Retail Industry (Units) - GfK

Monro.Forward Progress Update

Demonstrated Progress on Monro.Forward Initiatives Will Position Us Well to Emerge Stronger Post-Crisis

Improve Customer Experience

Enhance Customer- Centric Engagement

Optimize Product & Service Offering

Accelerate Productivity & Team Engagement

• Substantially completed the rebrand and reimage of approximately 40 stores in attractive markets
• Outperformance of rebranded stores reinforces strength of strategy
• On track to complete the transformation of ~100 to ~150 stores during FY21
• Modernized store infrastructure and digital phone system driving better customer execution
• Higher ROI marketing spend contributing to improved store traffic trends
• Rollout of new tire pricing and category management technology progressing as planned and on track to be completed by end of Q3FY21
• Leveraging price elasticity analytics to dynamically respond to demand trends
• Ramped store staffing with the right mix of skills to drive top line and labor efficiency
• Leveraging Monro University to facilitate onboarding and training of new teammates
• Utilizing technology-based labor model, with data-drivencloud-based store staffing and scheduling software rollout progressing as planned and expected to be completed by end of Q3FY21

6

A Scalable Platform: Recent Acquisitions

Executing Disciplined M&A Strategy to Capitalize on Significant Opportunities for Consolidation in the Aftermarket

Announced Acquisitions

• Announced definitive agreement to acquire 17 stores in Southern California
• Further expands the Company's geographic footprint in the Western United States
• Represents $20M in annualized sales, slightly dilutive to EPS in FY21
• Sales mix of 60% tires and 40% service

Fiscal 2021 Acquisition Outlook

• Resumed acquisition activity as M&A remains a critical pillar of Monro's growth strategy
• Evaluating a robust pipeline of attractive M&A opportunities that support our strategy while maintaining strong financial discipline in the face of an uncertain environment

7

Second Quarter Fiscal 2021 Results

Managing Business For Profit in a Challenging Demand Environment

		Q2FY21	Q2FY20			1HFY21	1HFY20
Sales (millions)		$288.6	$324.1	(11.0%)		$535.6	$641.2	(16.5%)
Same Store Sales	-11.4%	0.0%	(1,140 bps)		-18.7%	0.4%	(1,910 bps)
Gross Margin		36.2%	37.7%	(150 bps)		35.8%	39.0%	(320 bps)
Operating Margin	8.5%	10.3%	(180 bps)	6.7%	10.9%	(420 bps)
Diluted EPS		$.38	$.60	(36.7%)		$.47	$1.26	(62.7%)
Excluded Costs1	$.01	$.02			$.07	$.05
Adjusted Diluted EPS2		$.39	$.62	(37.1%)		$.54	$1.31	(58.8%)

1Excluded costs in Q2FY21 include $.01 per share in Monro.Forward initiatives and management transition costs. Excluded costs in Q2FY20 include $.02 per share of costs related to Monro.Forward initiatives and acquisition due diligence and integration costs. Excluded costs in 1HFY21 include $.06 per share related to store closing costs and approximately $.01 related to management transition and Monro.Forward costs. Excluded costs in 1HFY20 include $.03 per share of costs related to Monro.Forward initiatives and $.02 per share of costs related to acquisition due diligence and integration.

2Adjusted diluted EPS is a non-GAAP measure that excludes certain non-recurring items and items related to our Monro.Forward or 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	8
October 28, 2020.

Second Quarter Fiscal 2021 EPS Bridge

$0.70			Other includes the benefit of cost
			reductions and lower expenses due
	$.60	($.34)	to a year-over-year reduction in the
$0.60	number of stores as well as the
		positive impact of non-comp stores,
			partially offset by higher recruiting
			expenses
$0.50
$0.40			$.13	$.39	($.01)	$.38
$0.30
$0.20
$0.10
$0.00

Q2FY20 Diluted Earnings	Impact of -11.4%	Other	Q2FY21 Adjusted Diluted	Non-GAAP Adjustments 1 Q2FY21 Diluted Earnings
Per Share - GAAP	Comp Sales		Earnings Per Share - Non-	Per Share - GAAP
			GAAP

1Non-GAAP adjustments in Q2FY21 include $.01 per share in Monro.Forward initiatives and management transition costs.

9

Solid Financial Position and Flexibility

We Remain Well Positioned to Support Our Ongoing Business Operations and Growth Strategy

Disciplined Capital Allocation

First Half of Fiscal 2021

• Reduced bank debt, net of cash by $71M
• Capex of $24M
• Paid $15M in dividends
• Strategically reduced cost structure

Strong Balance Sheet and Liquidity

• Generated strong $126M of operating cash flow during 1HFY21
• Net bank debt of $150M as of September 2020
• Net bank debt-to-EBITDA ratio as of September 2020 of 1.1x
• Liquidity position of ~$420M as of October 24, 2020

10

Fiscal 2021 Outlook - Financial Assumptions

Financial Assumptions as of October 28, 2020

Tire and Oil Costs	Stable y/y
Interest Expense	~$28M to ~$30M
Depreciation and Amortization	~$76M to ~$80M
Tax Rate	~24%
Capital Expenditures	~$40M to ~$50M
Weighted Average Number of Diluted	~34M
Shares Outstanding
Store Closure Operating Income Benefit	~$3.8M
Cost Reductions	~$25M to $30M

Additional Assumptions

• CapEx range accounting for rebrand of ~100 to 150 stores
• Realized ~$5M in cost savings in Q2 and expect additional savings of ~$5M to $10M in 2HFY21
• Anticipate lower cost savings in 2HFY21 when reinvesting portion of savings to drive top line growth

11

Second Quarter Fiscal 2021 Key Takeaways

Despite the Challenging Environment, We Are Focused on the Elements of Our Business Under Our Control and Making

Strong Progress Executing Our Monro.Forward Strategy

• Focused on driving profit and cash flow by right-sizing the business to match demand, expanding variable margins and executing targeted cost reductions
• Significant cash flow generation positions us well to implement our strategic initiatives, execute attractive acquisition opportunities, pay down debt and return cash to shareholders
• Top-lineresults continue to be impacted by ongoing COVID-19 headwinds, in-line with broader industry trends
• Resumed store rebrand and reimage initiative with the transformation of approximately 40 stores
• Executed M&A strategy with definitive agreement to acquire 17 stores
• Maintaining strong commitment to Monro.Forward strategy as transformation initiatives continue to gain traction

12

Appendix

13

Store Refresh Transformation Timeline

7 Stage Transformation Process from Beginning to End Takes ~17 Weeks

BEFORE	AFTER

Store Readiness	Parts Inventory	Store Inventory Storage	Inventory Assortment	Store Team Trained	Store Interior Remodel	Store Exterior Painted
on New Operating	and Technology	and New Signage
for Change	Rebalanced1	Configured for Tires1	Reset for Tire Focus1
Procedures	Installed	Installed

~17 WEEKS

1Steps are only required for stores that are being rebranded from service format to tire format

14

Monro.Forward: Investments in Technology

Significant Investments in Technology to Support Monro.Forward Strategy

Area	Strategic Rationale	Timing

Business Intelligence	• KPI dashboards for stores and management
Monro University	• Ensures consistent onboarding and teammate training
• Develop clear career paths
Learning Management System
• Deliver standard operating procedure training
Store Network	• Enable and support cloud based merchandising strategy
Infrastructure Upgrade	• Enable customer-facing technology
Digital Phone and Customer	• Eliminate cost of analog phone system
• Simplify phone execution for store personnel
Communication System
• Enable customer-centric call and text messaging management

• Launched in Q4 FY18
• Ongoing company-wide expansion
• Launched in Q3 FY19
• Ongoing expansion across store base
• Completed installation across base in Q2 FY21
• Completed installation across base in Q2 FY21

Store Staffing Model &	• Eliminate paper-based scheduling	• Installed in more than 1,050 stores
• Optimizes store staffing and day part scheduling	• To be implemented across base by Q3
Scheduling System
• Improves part-time scheduling capabilities	FY21
Tire Category Management &	• Enterprise solution to dynamically manage pricing at the SKU level	• Installed in more than 800 stores
• Partially automates optimization of tire volume/margins by providing	• To be implemented across base by Q3
Pricing System
real-time elasticity	FY21
Cloud-Based Car Inspection	• State of the art technology for technicians to provide industry-
leading service	• In pilot stages
Scanning Tool
• Provides efficient tool for actively managing customer needs

15

Monro.Forward Strategic Initiatives

FY19

Q2 FY19

Q3 FY19

Q4 FY19

FY20

Q2 FY20

Q3 FY20

Q4 FY20

FY21

Q2FY21

Q3FY21

Improve

Customer

Experience

Enhance

Customer-Centric

Engagement

Optimize

Product &

Service Offering

Accelerate

Productivity

• Team Engagement

Foundational

Technology &

Tools

Pilot store refresh &	Scale store refresh & operational
operational excellence	excellence

Scheduled maintenance in-store selling

Data-driven CRM	Digital phone and customer
	communication system
New websites	Data-driven "new customer"
	marketing
New in-store sales	Optimize tire assortment
packages

New store comp plans	Monro University (includes
career path, LMS)

Store staffing & scheduling system

Store network infrastructure upgrade

Tire category management & pricing system

Cloud based car inspection tool

= Completed Initiatives	16