Monro’s fourth quarter results saw revenue come in below Wall Street’s expectations, with sales declining year-over-year, but non-GAAP profit exceeded analyst forecasts. Management attributed the performance to continued progress in streamlining operations, including the closure of underperforming stores and reinvesting savings into digital marketing. CEO Peter Fitzsimmons emphasized that expanded digital marketing and customer engagement initiatives contributed to positive comparable store sales, despite overall revenue pressure from store closures. Management was cautious about ongoing wage inflation and regional softness in the West, noting that digital marketing and operational improvements drove much of the sequential improvement.
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Monro (MNRO) Q4 CY2025 Highlights:
- Revenue: $293.4 million vs analyst estimates of $295.2 million (4% year-on-year decline, 0.6% miss)
- Adjusted EPS: $0.16 vs analyst estimates of $0.14 (17.6% beat)
- Adjusted EBITDA: $25.6 million vs analyst estimates of $25.44 million (8.7% margin, 0.6% beat)
- Operating Margin: 6.3%, up from 3.3% in the same quarter last year
- Locations: 1,115 at quarter end, down from 1,263 in the same quarter last year
- Same-Store Sales rose 1.2% year on year (-1.9% in the same quarter last year)
- Market Capitalization: $566.2 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Monro’s Q4 Earnings Call
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Thomas Wendler (Stephens): asked about the impact of digital marketing on same store sales. CEO Peter Fitzsimmons explained that stores receiving incremental marketing support experienced higher sales and gross margin, and that marketing efforts will continue to be allocated based on store readiness.
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David Lantz (Wells Fargo): inquired about the drivers of gross margin improvement. Fitzsimmons highlighted lower material costs and occupancy expenses, partially offset by higher technician labor costs, with expectations for continued margin stability into next quarter.
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Bret Jordan (Jefferies): questioned the contribution of ticket size versus traffic to same store sales growth. CFO Brian D’Ambrosia reported traffic was down mid-single digits but average ticket increased, resulting in positive comps, with regional strength in the Northeast.
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Bret Jordan (Jefferies): also asked about the value of remaining owned store real estate. D’Ambrosia noted these assets are on the balance sheet at about $5 million, and expects similar value from future dispositions.
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Brian Nagel (Oppenheimer): pressed for long-term sales and expense leverage potential. Fitzsimmons said operational initiatives should yield comp store sales growth and gross margin benefits, but wage pressures and investment in new initiatives remain factors to monitor.
Catalysts in Upcoming Quarters
Our analyst team will be watching (1) the pace and measurable impact of digital marketing expansion across the remaining store network, (2) the completion and cash flow contributions from the ongoing real estate disposition of closed stores, and (3) the effectiveness of customer experience initiatives, including adoption rates of the Confidrive inspection tool. Customer response to product assortment refinements and weather-driven demand will also be important indicators.
Monro currently trades at $18.87, down from $20.03 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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