Below is an excerpt from a complimentary research note from Retail analysts Brian McGough and Jeremy McLean. We are pleased to announce our new Sector Pro Product Retail Pro. Click HERE to learn more.
E-Z Pass Traffic Stalls; Bad for MNRO.
As the debate rages on as to the relevancy of ‘miles driven’ as it relates to the Auto Maintenance space, it’s worth keeping tabs on E-Z Pass volumes in key markets.
This chart shows the 7-day moving average of E-Z Pass traffic through NYC bridges and tunnels…and it’s clear that the improvement that we’ve steadily seen since the April low has stalled out.
I think that’s bearish for Monro (MNRO) – one of our Best Idea shorts. Unlike ORLY, AAP and AZO which all have strong retail business selling discretionary product that has been helped in part by government stimulus, Monroe is service only, and the business is driven by excess vehicle use.
The company services brake systems, steering and suspension systems, and tire/wheel maintenance – all of which have a high correlation to miles-driven.