Good morning ladies and gentlemen and welcome to Monro Inc.'s earnings Conference Call for the Fourth Quarter and Full Year Fiscal 2020. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder ladies and gentlemen 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 Ms. Maureen Mulholland, Senior Vice President, General Counsel, and Secretary at Monro. 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 the call this morning, we will be referencing a presentation that is available on the Investors section of our website at corporate.monro.com/investor/investor-resources. If I could draw your attention to the Safe Harbor statement on slide two of the presentation, I'd like to remind participants on this morning's call that our presentation includes some forward-looking statements about Monro'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 Monro's filings with the SEC and in our earnings release and 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. 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's statements include a discussion of certain non-GAAP financial measures which are intended to supplement and not to be substitute for comparable GAAP measures. Reconciliations of such supplemental information to the comparable GAAP measures will be included as part of today's presentation and in our earnings release. With that I'd like to turn the call over to our President and Chief Executive Officer, Brett Ponton. Brett?

Thank you, Maureen and good morning everyone. Thanks for joining us. Before we begin, I would like to take a moment to thank all those on the front lines including healthcare and other essential workers who are working to keep our community safe and functioning during the COVID-19 pandemic. Our thoughts are also with all those who have been impacted by this unprecedented health and economic crisis. As our stores remain open as essential businesses during these difficult times, I would like to extend my sincere appreciation to all our teammates who continue to work hard to provide our customers with the quality service they expect for Monro. As highlighted on slide three, we are committed to three priorities while navigating through this period of volatility and uncertainty. First and foremost, the safety and well-being of our teammates, customers, and communities remain our top priority. Second, we are focused on maintaining business continuity to support our customers' needs. And lastly, we continue to execute on our Monro.Forward strategic initiatives and continue to adjust operations to emerge stronger from this crisis. Turning to slide four, as we work to prioritize health and safety in all aspects of our business, we have implemented stringent safety protocols including social distancing and enhanced cleaning procedures in all our stores. We are monitoring the COVID-19 situation closely and continue to follow guidance from local, state, and federal officials. Our stores are operating on a reduced schedule, while our support staff is working remotely where possible. As evidence of our ability to quickly adjust our operations to best serve our customers in the current environment, we now offer key drop and contactless services to our guests. Importantly, our teammates are our biggest asset and we have taken a number of actions intended to protect and support…

Thank you Brett and good morning everyone. Turning to Slide 8, I'd like to provide a more detailed overview of our performance this quarter. Sales fell 0.4% year-over-year to $286.1 million, primarily driven by the 9.5% decline in same-store sales. As Brett mentioned we had a slow start to the quarter with mild winter weather conditions in our northern markets during January and February, and while we saw an improvement in comparable store sales with the onset of spring weather in early March, our performance was substantially impacted by COVID-19 restrictions that began in the middle of the month. Sales from new stores increased $23.5 million including $21.9 million from recent acquisitions, partially offset by a decrease in sales from closed stores of approximately $1.1 million. The fourth quarter of fiscal 2020 had 91 selling days in line with the previous year period. Gross margin decreased 260 basis points to 35.7% in the fourth quarter of fiscal 2020 from 38.3% in the prior year period. This decrease was primarily due to an increase in distribution and occupancy costs as a percentage of sales, as we lost leverage on these largely fixed costs with lower comparable store sales. Additionally, we were impacted by lower vendor rebates recognized during the quarter due to slower inventory turns compared to the prior year period. Operating expenses for the quarter increased $20.1 million to $101.7 million or 35.5% of sales as compared with $81.6 million or 28.4% of sales for the prior year period. The year-over-year increase primarily reflects $4.3 million in store closure impairment costs related to our planned portfolio optimization which Brett previously mentioned, $2.3 million in additional store impairment costs, as well as increased costs related to our Monro Forward initiatives, incremental costs related to COVID-19 and the expense of 86 net…

Thanks, Brian. Before moving to Q&A, I wanted to take a few moments to discuss the accomplishments we made in fiscal 2020, as well as our broader outlook for fiscal 2021. 2020 was an instrumental year in our company transformation. We accomplished a number of key initiatives and made fundamental changes across our organization that will position us to capitalize on long-term growth opportunities once the COVID-19 crisis subsides. Our largest accomplishment during the year was the significant progress we made on our store rebrand and refresh initiative. While we are still very much in the early innings of this initiative, we completed the transformation of more than 200 stores in a number of key markets to date, including rebranding 71 stores from service branded stores to tire branded stores. While we are pausing this initiative for the time being to focus on driving business continuity during COVID-19, we firmly believe we have a strong opportunity to continue to streamline our brand portfolio and drive long-term sustainable same-store sales growth. Additionally, during the year we made critical investments in technology that will support our future operations. We launched our network infrastructure upgrade including a new digital phone system, as well as the pilot programs of our new tire category management and pricing tool and cloud-based store staffing model, which we believe will be instrumental in driving long-term margin expansion. Acquisitions remain a pillar of our growth strategy, and during the year we made impressive strides in expanding and diversifying our geographic footprint. Our acquisitions in California, Idaho and Nevada represent entry into the attractive and dynamic Western United States, better positioning us to service national accounts, as well as benefit from the high concentration of vehicles in this market and the potential long-term consumer shift to ride-sharing. We also acquired…

Thank you. We’ll now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of Brian Nagel with Oppenheimer. Please proceed with your question.

Good morning.

Good morning Brian.

Good morning Brian.

Thank you for taking my questions. So, I wanted to really just dive deeper into the recent sales trend that Monro is seeing here. So, Brett I think the last number you gave us was down 22% which I think was the most recent weekly figure if I heard that correctly. So, the questions I have if we look at that trend is there anything -- are you seeing different sales run rate so to say depending on geography particularly those that may have been opening sooner than other markets. Also we've had a lot of companies and some in your broader space call out stimulus as -- the stimulus payments as a driver of an uptick in sales. Are you seeing that? And then thirdly, you've always done a good job really keeping an ear to the ground, particularly with your acquisition efforts and seeing what other companies are doing. How would you view Monro in market share against this current backdrop? Thanks.

Thanks Brian for the questions. Let me start with giving you a little more color on the cadence of our comp performance within the quarter. As you mentioned, we exited March running down about 45%. Now, the first half of April was our clear low point in the pandemic or the crisis that we're dealing with. We're down just south I guess down 50%. We saw a recovery in the second half of April and then in the first half of May. And I think as you characterized, Brian we would attribute maybe some outsized recovery during that period of time, largely driven by the stimulus checks that I think we're landing in consumers' mailboxes at that particular point in time. We're pleased with the gradual improvement that we've seen off that low point. And as we commented about the exit point in May being down just a little over down 20%. The thing that we look pretty closely at is mobility metrics, miles driven, and I think it's fair to say that our trend lines are tracking pretty closely with what we're seeing in terms of overall mobility metrics that we're picking up from various sources. I think we did see some outsized recovery during the second half of April and the first part of May. And I think we would attribute that to stimulus checks and we saw a little bit of an increase in our high-ticket tire business during that period of time as well. Geographically speaking probably not surprising to you, we're seeing a faster recovery in our business in the southern markets and the Midwestern markets where the shelter-at-home directives were not as severe as they certainly have been in the mid-Atlantic and Northeastern markets where we have a significant concentration of our stores. As it relates to channel checks in our conversations and visibility that we have, I think it's fair to say that we feel like we're holding up pretty well relative to what we're hearing in the marketplace. I think it'd be a far reach for us to claim that we're gaining share in this environment. But I think certainly our team has done a really good job of managing through this taking care of our customers. And I feel like our share position is certainly solidified in this near-term environment. But probably more importantly I think the actions that we've taken during the quarter really set us up well I think to be a share gainer post-pandemic.

Well, thank you, Brett. I'm going to leave it there. I had three questions together, so I want to give somebody else a chance. Thank you. Thanks for the detail.

Thanks Brian.

Our next question is from the line of Jonathan Lamers with BMO Capital Markets. Please proceed with your question.

Good morning. Brian and Brett thank you for the guidance on the fixed cost reductions, the $10 million to $15 million annualized. As we think about the current quarter, can you give us some more guidance on what portions of OpEx or store -- such as store hours are variable? And how that portion will decline with sales into Q1? Or I guess said another way can we just take the Q4 OpEx, take your guidance on operating leverage impact on EPS and trim an additional $10 million annualized and then get the Q1 OpEx. Could you walk us through some of your thinking on that?

Yes. Jonathan this is Brian. Thanks for the question. There is some seasonality in our operating expenses as we operate in the Northeast, we have things like heating costs and other things in snow plowing that tend to ramp up in the winter months. So, I think you're probably better off looking at the year-over-year cadence of our operating expenses and kind of prorating that savings or reducing that savings on a fairly straight-line basis but against the prior year G&A versus doing it on a run rate basis quarter-over-quarter.

Okay. And so we would use your operating leverage guidance, I believe for every x decline in sales, the $0.03 impact EPS and then you would layer on the cut to the fixed costs on year-over-year. Is that the way you would do it?

That's correct. I think the first thing that we did when we reacted to COVID was we wanted to make sure that we were protecting our variable margins. And the way we went about that was really looking at our technician labor in the stores, which is the biggest controllable variable cost that we have is our technician labor at the stores. Materials obviously, take care of themselves as those are assigned to the ticket. But we have to go and make those adjustments in our labor model at the store to get those variable cost savings. So we did that and we feel good entering FY 2021 that we preserve those historical variable margins. So it is safe to say then against those fixed costs the variable margin flow-through will be consistent. And then layer in the G&A and fixed cost savings against that.

Okay. Thanks.

Jonathan maybe just I can – Jonathan, this is Brett. Maybe I'll add a little more strategic color to this. And I'll let you get back to your next question. But as Brian said, I think really proud of the team here in terms of how we not only navigated through this but I think look you clearly learn a lot about your business when you have a business that runs down 45% to 50%. And we challenged I think every paradigm in our business around, what was traditionally fixed cost have now become maybe a little bit more variable in our minds. And as Brian said, job one is to protect our variable margin profile. And then really look for ways that we could strategically attack reducing our fixed cost position in the company. And two of the key initiatives we talked about during the main session was labor and scheduling tool. As Brian said, that's a key component of us, managing down the largest part of our variable cost structure as well as we took some actions in the quarter to take what was normally fixed cost in our stores and made those hourly or variable labor as well. So our intent here is to emerge the crisis with a very flexible agile business model that allows us to adapt as demand improves.

Thanks a lot. And just picking up on your last point Brett, about the changes you've made to prepare for the post-COVID world. Could you elaborate on that? And also what signposts you're looking to begin putting cash to work for acquisitions again, and possibly for the resumption of the rebranding, reimaging initiative?

Yes. We started about – talk first about the major one in our business, which we identified a year and half ago as a major opportunity for us which was better manage our controllable costs in our stores that being our labor. And make absolutely certain that we have the right amount of labor with the right skill sets with that labor in our stores. And we knew we needed to install some technology to be able to do that and heading into FY 2021, we also knew that was going to be a significant change management initiative for our company. And the expectation was it would take us probably a full year to manage through that change in a very undisruptive way if you will. What the pandemic allowed us to do is drive all that significant change in our structural staffing models in our stores, during the pandemic crisis. So we had to implement some interim tools, some technology to be able to do that that now has paved the way for our cloud-based scheduling tool that will be rather easy to roll that out as we head into F – or excuse me Q2. Signpost that we're going to look at I think as we commented about, there still isn't a lot of visibility here, tremendous amount of uncertainty about what's ahead in terms of – as these states reopen I think it's clearly uncertain as to what the reaction is going to be, whether or not there's going to be resurgence of issues or not. But I think we're clearly going to be looking at our comp sale performance. And as we see the gradual improvements provided that stays linear like we would expect, we'll then start to contemplate, reengaging on the initiatives that we've set forth. But just to come back to the priorities that we've established. We said all along, the priority number one is protecting our team and health and safety of our team number one; and number two, really focus on liquidity and protect our balance sheet during this period. And that's going to remain our priorities I think at least in the near term. And as Brian said, we're really pleased and proud about the fact we navigated through this and pivoted as a company pretty quickly to focus really on cash and we managed through this period of time on a cash positive basis despite all the challenges that we've all been dealing with.

Okay. Helpful. Thanks for those comments.

Thank you.

Thank you.

The next question is from the line of Bret Jordan from Jefferies. Please proceed with your question.

Hey, good morning, guys.

Good morning.

Good morning, Bret.

When you think about the store closures, could you give us sort of the profile of the stores that are being closed? Are they legacy stores from the old Monro Rochester network, or are these stores that have been some of the expansion markets? And I think if you sort of look down the road, what's the total store closure number you might get to as you sort of evaluate the footprint?

Well let me back up, Bret and just give you more color on it. The approach of the process that we use, I think one of the challenges I think any retailer asked to deal with when you look at underperforming stores is it, a function of underperforming operational performance or is it a function of the demographics and the communities that you're in. And one of the investments that we made early on as we partnered with an analytics company that really helped us, use data and segmentation to really understand which markets really fit our brands well and which ones don't. And our team has really done a nice job of I think going through the portfolio to make those determinations and also factoring in our broader strategy of converting potential service stores and the tire branded stores and the expected lift that we would see as a result of that transformation. So all that considered is how we landed on the 42 stores that we had talked about pre-COVID pandemic. Where it resides, probably not surprising to you Bret a company like Monro that's grown through acquisitions and virtually every acquisition that you do, you get some stores that get drug along in that deal that maybe are underperformers. And so, I think it's a collection of just many years of acquired stores with some of those underperforming assets that we've acquired that's made its way to our closure list to 42. If I had to give you any geographic concentration probably in the Midwest it seems to be maybe an outsized number of locations there where we've had a higher concentration of stores to begin with. So I think it's more about rationalizing our footprint there and we expect to preserve a lot of that customer and revenue demand in other stores where there is good density. In terms of forward-looking on that, we have no intentions of going beyond that at this point as we analyze the rest of our portfolio. We feel like we have between the operational improvements that we currently have in place with an overlay of the potential for stores to migrate from a service branded store to a tire branded store. We feel good about the remaining portfolio of being viable contributors to our company going forward.

Okay. Great. And then on the Amazon partnership, I mean you've got some experience with the existing Amazon linked stores. Could you give us an idea maybe what to expect from a comp lift on a store base or maybe an EBIT lift as you get that referral volume in there by adding those 200 stores?

Well as you know, I mean we don't -- we're not going to call out specifically what we expect from one relationship to the company. We're very pleased about the relationship that we've expanded now with Amazon and combine that with the relationship we have enjoyed with other online retailers. But probably the metric I'd share with you Bret is, we said all along I think the industry benchmark is about 7% to 8% of consumers that have a tendency to buy tires online. And if you look at Monro's performance of installs that we do above and beyond the tires that we actually sell in-store, we have a tendency to track in line with that industry metric. So there's fairly low penetration rate of consumers that actually buy tires online. Our expectation here is, there's not a material change in our forward businesses related to this. Most of our expected performance improvement in the company is through the self-help initiatives that we've laid out as part of Monro Forward.

Okay. Great. And then a housekeeping question for Brian. Could you give us the monthly comps for the fourth quarter?

Sure. Yes. January was down 4%. Feb was down 4.8% and March was down 20%.

Okay, great. Thank you guys.

Thanks Bret.

Next question is from the line of Rick Nelson with Stephens. Please proceed with your question.

Hello. Just two follow up on that was the summer play trends, the minus 4% in January the minus 4.8% in February. Could you speak to the southern markets that were not weather impacted how those performed in January and February?

Yes. We don't give specific performance by region, but the south certainly outperformed the north because of that mild weather in the north.

Okay. Got you. Were you in fact positive in those markets and the declines that occurred in the Northeast with the warm weather?

The performance was relatively -- obviously it's on a relative basis it outperformed. I think it was slightly -- about flat or slightly positive in the south.

Got you. And I'm curious how you see consumer behavior as we get to the other side to COVID? How you see that changing and do you see people doing more online spending less time in stores and waiting rooms and how that might impact your Monro Forward strategies and your remodeling initiatives?

Sure Rick. As you would expect one of the things that we've been watching pretty closely is the amount of installations that we've been doing in our business for online seller of tires. And what I can tell you during the COVID pandemic, we haven't seen a meaningful change in that trajectory during the crisis and even post-crisis that would indicate a significant shift in consumer sentiment to buy only this category online, unlike what you see in other traditional retailers of course. Given the nature of tires, you need to install those properly on vehicles and also need to align the vehicle to protect that investment in tire. So we still think good brick-and-mortar presence is very strong defensible position relative to pure play e-commerce in our category. We have seen a little bit of change as you would expect in just consumer sentiment around social distancing and store cleanliness and sanitation efforts. And as we commented in our prepared remarks, we've gone to great lengths to do all of those things in our stores. In addition to that, really placing emphasis on drop off capability, curbside service, et cetera for our customers to mitigate that interaction. And we expect that to continue I think well beyond the pandemic exit that we expect here. So -- but not significant change like maybe you'll see in other categories in our space, and certainly the data near-term would indicate not a significant shift in consumer behavior so far.

Okay. Do you think there's pent-up demand that's been created here given the lockdown and when market starts to open up? What you're seeing there in terms of sales trends? I know you were down 22 same-store last week, but any differences that you're seeing in the markets that have opened up?

Let me start with the second part of your question. As we commented, I think we saw a definite strength in our southern and our Midwestern markets and in areas in states and local areas where the shelter-in-home or shelter-in-place provisions weren't as strong as they certainly are in the Mid-Atlantic and Northeast. So I think we would say that those markets outperformed and recovered at a faster pace than what we've seen in the other markets. The first part of your question, remind me again Rick what the first part was? Pent-up demand, I'm sorry.

Yeah, pent-up demand for service and tires.

So, I think we saw a little bit of that in the second half of April into May with stimulus checks arriving in home. We did see I think some outsized performance in our tire category, which that part of our business is higher ticket, higher value in nature. Consumers have a tendency to shop that a little more than other services that are more needed. So, I think certainly on tires, I think it's fair to say there's probably some pent-up demand that we enjoyed a little bit of a lift in the second half of April into the early part of May. But outside of that, I think it's based upon miles driven. I think we need consumers out of their homes driving vehicles. And the more they drive those vehicles, the more maintenance and repairs are required on those vehicles. So as I commented before I think we saw our performance track pretty comparably to the miles driven metrics that the industry is tracking pretty closely, as well as mobility metrics provided by technology companies.

That make sense. Thanks, Brett. Thank, Brian.

Good luck.

Thank you, Ricky.

Our next question is from the line of Stephanie Benjamin with SunTrust. Please proceed with your question.

Hi, good morning.

Good morning, Stephanie.

Good morning, Stephanie.

I wanted to discuss a little bit about the pricing and category management tools, as well as some of the scheduling and staffing tools that were rolled out really beginning of the first quarter and expected to be complete by the second quarter. Can you just talk about the level of really same-store sales growth that you would expect to see at high level, obviously, nothing specific to see some of the benefits from these rollouts, is it immediate, or is there going to be -- do we need, kind of, a return to maybe call it flattish or positive same-store sales growth to start to see the benefits of those roll out? I'm just trying to think about as we get on -- get beyond even the first quarter and presumably miles driven starts to improve what we can really bake in to from a margin improvement or just an overall cost-reduction standpoint from these initiatives? Thank you.

Thanks, Stephanie. Let me start first with the tire category management tool. Tires is our largest category in the company. And it's the category that consumers have a tendency to shop online and given the complexity in our business now being in 32 states and roughly 90 markets and dealing with well over 10 different brands and 30,000 to 40,000 SKUs that we're managing. Managing pricing in a dynamic market requires big data and a lot of sophistication good technology. So we identified a year plus ago that we needed to make some investments in that. So we've done that installed the tool. We have it now in a handful of markets where we are using it to price our category. And the focus on the category is to make certain that we understand true elasticity points on tire pricing by SKU, by vehicle type and by brand in many cases and allows us to optimize candidly that balance that every retailer tries to strike between optimizing and driving maximum volume, but also protecting your margins but doing that in a very thoughtful data-driven way. As we've rolled this out to our initial markets, we've created control groups in our business to measure the performance of markets that are priced with the model versus those that aren't. And although I think it's still too early to declare victory on this particular initiative, we're encouraged by the early signs that we're seeing in this model on expanding our gross margins in the tire category as a result of pricing more sophisticatedly. But again early, early innings with that initiative. As it relates to scheduling, as you know, in our business, revenue is very much dependent upon the labor in your stores to perform that service, versus traditional retail. And getting our labor model right, not only is a significant like margin opportunity for our company, that Brian talked about, we've built into our forward guidance around some structural changes that we've made in our business, but also as a significant driver of ensuring we can say yes to consumers when they call the store or want an appointment, do we have adequate labor in our stores to service that need. So, again, still too early to say. I think what I would point to as a guidepost on that is, we've managed extremely well through this pandemic, flexing our labor down, by utilizing the methodology that we intend to scale through the cloud-based tool. And we're also going to use that same methodology to, I would say, protect our margin profile as demand improves post the pandemic crisis. But still way too much uncertainty, I think, Stephanie, overall to form any opinion on long-term benefit that we would expect to see as related to those two initiatives.

Got it. Helpful. And then switching gears to some of your online initiatives. Obviously, very helpful color with the Amazon partnership. But in terms of just the rollout of expanded capabilities or online booking tools or from your own Monro website, can you just give us an update on what we have going forward in terms of rolling out that updated website? Thank you. Or tools?

Okay. Sure. Thanks, Stephanie. Well, as you would expect, in a company of our age, we have a pretty extensive technology road map that we've laid out in our company. Some of those items we've shared externally with investors that are more consumer-facing. But I can tell you, there's an extensive technology road map that's making modernizations to the underlying infrastructure in our company, one of which we talked about, which was the prerequisite to any other initiatives, which is upgrading the store infrastructure in our stores, installing new low voltage Cat 6 cabling to enable stronger routers in the store. And that was an enabling tool to allow us to implement now VoIP voice technology that allows us to create a much better experience for consumers and more flexibility with how we handle customers in our stores. And it really is a great tool to help our store managers execute much better in-store. Those, I would say, are foundational. So now that is going to be completed in -- by the end of Q1. We now set our sights on upgrading other investments in our store around point of sale equipment, et cetera, to create a better in-store experience. And once we make those investments that then unlocks our ability to then move forward with upgrading our pure e-commerce capability, omnichannel experience that we have a vision towards achieving at some point. So a lot of foundational work has been done in place. There's still a little bit more to do. But I think we have pushed out the e-commerce initiative out one year, just given COVID and some of the underlying foundational investments we needed to execute and implement in the business to enable that.

Got it. Thank you so much.

Thanks, Stephanie.

Next question is from the line of Scott Stember with CL King. Please proceed with your question.

Hi. Good morning and thanks for taking my questions.

Good morning, Scott.

Good morning, Scott.

Brett, we've seen across the industry a lot of the players have been talking about how sales, I guess, is an exit run rate where we are right now, being flattish and you guys are, while improving, are still down. Maybe just remind us some of the differences that we should look for when explaining the difference in your company and the overall industry? Is it geography, local economies, or is it just a percentage of preventive maintenance that your business actually does?

Well, I think, I mean, assuming I guess that you're referring to maybe some of the auto parts players that have come out with information. Certainly, I think, the auto parts distributors, if you will, have two parts of their business. They support DIY, do-it-yourself as well as do-it-for-me. I think all companies, I think, have expressed some relative strength in DIY versus the DIFM, which makes sense, as consumer shelter in home that they would have time to do more work on their vehicles in home. As it relates to improvement in DIFM, I think, from what we can read and the channel checks that we're doing, we feel that we're tracking in line with what we've seen in our channel checks. The tire category is also a little bit different than the auto parts, in the sense that represents 50% of our business. There's probably a meaningful difference in our business there as well. But as we commented, I think, just geographically, given our really high concentration of stores in the Mid-Atlantic and the Northeast regions. And I think all the other auto parts suppliers, et cetera, have commented on relative weakness in the markets where there's been pretty strong shelter-in-home orders, certainly, that fits our store footprint quite well. As we commented in our prepared remarks, our southern markets and our Midwestern markets where those shelter-in-home provisions were less stringent, certainly those markets are faster to recover. In some cases, we are seeing markets that are comping positive. But I will say, that's very volatile very -- still very inconsistent in terms of the performance that we're seeing. But generally speaking, I think as you would expect where strong shelter-in-place orders were in place we're seeing slow recovery in those markets. But I will say we are seeing recovery. We're seeing good recovery in all markets, just a faster pace in the southern and Midwestern states.

Got it. And just last question. You talked about some of the extra efforts put in place in your stores whether it's social distancing, the amount of customers that are allowed in the store at one time or just from a cleaning perspective. Can you just maybe just frame out how much going forward in a normalized environment that could increase your cost structure?

Yes. It is incremental. We haven't commented on it, we don't think it's tremendously material to our business. A lot of it is accomplished just with some plexiglass sneeze guards that we put in place, taping of the floor to maintain distance between guests who are waiting for service at the counter, as well as removing some chairs in the waiting room to do that. The cleaning products are incremental, but we've been able to pretty much fund those with some other supply savings during the time. So hand sanitizer and disinfecting wipes to wipe down the customer vehicles are not that material to our performance or are the masks that we're providing is personal protective equipment to our teammates.

Maybe if I can add some color to that Brian. Scott, as part of our Monro Forward strategy, we've set out to say, we want to raise our standards our brand standards in our portfolio across the company and we're installing the Monro Playbook to effectively execute against that. Well a big part of the store playbook has been; stronger housekeeping standards, stronger cleanliness standards, and again the spirit have taken a very challenging situation turning into positive. This has allowed us to really accelerate, I think a lot of the cultural change that we wanted to get at in our stores around store appearance and cleanliness. And I think certainly across our stores, regardless of age or branding or investments made in those stores the level of our standards has increased significantly over this pandemic period. And I credit that to our team. Our store teams have really embraced us well and have done a great job, I think of protecting their teammates in the store, but also are sensitive to our customers as well as the communities that we serve. So really enabled us to accelerate a lot of change on that front.

Got it. That’s all I have. Thank you.

Thanks Scott.

At this time we've reached the end of our question-and-answer session and I'll turn the floor back to management for closing remarks.

Well thank you for joining us today and for your continued interest and support of Monro. We wish you a safe and healthy rest of your week. Thank you.

Thank you. This will conclude today's conference. Thank you for your participation. You may now disconnect your lines at this time.