Auto services provider Monro (NASDAQ:MNRO) fell short of the markets revenue expectations in Q4 CY2025, with sales falling 4% year on year to $293.4 million. Its non-GAAP profit of $0.16 per share was 17.6% above analysts’ consensus estimates.
Is now the time to buy MNRO? Find out in our full research report (it’s free for active Edge members).
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: $601.9 million
StockStory’s Take
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.
Looking forward, management expects the company’s operational improvement plan and targeted marketing investments to support continued gains in comparable store sales. Fitzsimmons said, “We believe higher expected consumer tax refunds should provide a tailwind to top-line trends for the remainder of the year.” The company is also focused on refining product assortment and leveraging inspection tools to drive high-margin service revenue. While cost pressures remain, management believes the business is positioned to generate positive cash flow and maintain a strong balance sheet as it completes its real estate disposition process.
Key Insights from Management’s Remarks
Monro’s management highlighted the impact of digital marketing, operational streamlining, and merchandising improvements as key drivers of recent performance.
-
Digital marketing expansion: The company broadened its multichannel digital media plan to over 340 additional stores, prioritizing locations with operational readiness to maximize return on investment. Management noted that stores receiving enhanced marketing support saw stronger performance in key metrics, such as sales and gross profit.
-
Customer experience improvements: Monro continued the rollout of its Confidrive inspection tool across all stores, aiming to boost transparency and selling effectiveness. This tool enables technicians to provide customers with a detailed assessment of their vehicle’s condition, driving higher service attachment rates and incremental revenue.
-
Store closures and real estate exits: The closure of 145 underperforming stores was largely completed, with management executing lease exits and selling owned properties. Proceeds from these transactions—totaling $22.8 million fiscal year-to-date—are being reinvested in core store performance and marketing.
-
Tire and service category performance: Monro’s tire category outperformed the broader industry in the quarter, aided by improved inventory availability and product assortment. Service revenue benefited from the increased use of inspection tools and targeted marketing to existing customers.
-
Cost structure optimization: The company reduced operating expenses through lower material and occupancy costs, supported by the benefits of store closures. These savings were partially offset by wage inflation and increased marketing investments, with management emphasizing ongoing efforts to balance profitability and growth.
Drivers of Future Performance
Monro’s forward-looking outlook is shaped by continued marketing investments, operational improvements, and external factors such as consumer tax refunds and weather trends.
-
Marketing and technology investment: Management plans to further expand digital marketing and CRM (customer relationship management) initiatives, aiming to lift comparable store sales. The rollout is phased based on store readiness, with a focus on maximizing the return of marketing spend.
-
External demand drivers: The company expects higher consumer tax refunds and ongoing challenging winter weather to create short-term demand for auto services and tires. CEO Peter Fitzsimmons explained that tax refunds can “provide a tailwind to top-line trends,” while difficult weather increases vehicle maintenance needs.
-
Margin management and cost risks: While Monro expects to maintain gross margin rates consistent with last year, management flagged baseline cost inflation and wage pressures as ongoing risks. Operational improvements and benefits from store closures are expected to partially offset these headwinds.
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 $20.05, in line with $20.03 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.