ITASCA, Ill. - Midas Inc., which provides auto repair services, said Thursday its second-quarter profit fell 27 percent, as a reduction in European royalties and increased spending offset higher revenues.
| MDS | 10.55 |
Midas said its income for the quarter ended June 28 declined to $2.2 million, or 16 cents per share, from $3 million, or 21 cents per share, in the year-ago quarter.
Analysts surveyed by Thomson Financial expected a profit of 24 cents per share.
Revenue rose 9 percent to $48.8 million from $44.9 million.
Midas said higher costs offset revenue growth during the quarter. Additional spending resulting from turning over Midas shops to new owners, along with an expected $1.1 million reduction in European royalties, weighed on operating income lower, according to Midas.
The company said U.S. same-store sales fell 0.8 percent during the quarter, hurt by lower sales resulting from economic weakness in regions including the West and the Southeast.
Same-store sales, or sales at stores open at least a year, is an important gauge of retail performance because it measures growth at existing, rather than newly opened stores.
The company also cut its full-year sales guidance.
Shares of Midas slipped $1.69, or 10 percent, to $15.23 in morning trading. The stock has traded in a 52-week range of $12.60 to $20.94.

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