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MONRO, INC. (MNRO)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue was $295.0M, down 4.9% year-over-year due to six fewer selling days; adjusted comparable store sales rose 2.8% while GAAP EPS was $(0.72) and adjusted EPS was $(0.09) as store impairment charges spiked .
  • Versus consensus, revenue modestly beat ($295.0M vs $289.5M*) while Primary EPS missed (adjusted $(0.09) vs $0.03*); EBITDA also missed ($15.9M* actual vs $22.8M* estimate). Bolded beats/misses below; Values retrieved from S&P Global.
  • Gross margin compressed 250 bps YoY on tire mix trade-down and self-funded promotions, and technician wage inflation; operating loss was $(23.8)M vs $10.3M a year ago .
  • Strategic actions: CEO Peter Fitzsimmons initiated a portfolio review, identifying 145 underperforming stores to close in Q1 FY2026; preliminary Q1-to-date comps are up ~7%, but FY2026 gross margin expected to remain pressured amid tariff uncertainty .

What Went Well and What Went Wrong

What Went Well

  • Adjusted-for-days comparable store sales grew 2.8%; category comps were strong in front-end/shocks (+27%) and batteries (+25%), with tires +2% and maintenance +1% .
  • Positive momentum into early FY2026: “preliminary quarter-to-date comparable store sales are up approximately 7%,” per CEO Fitzsimmons .
  • Liquidity and cash generation remained solid: $132M operating cash flow in FY2025; cash and equivalents of $20.8M and $508.7M revolver availability at year-end .

What Went Wrong

  • Gross margin down 250 bps YoY, driven by value-oriented consumer trade-down within tires and higher self-funded promotions; technician labor costs rose on wage inflation .
  • Large GAAP loss from increased store impairment charges: operating expenses up $21.4M YoY with $20.9M of store impairments; GAAP net loss $(21.3)M (EPS $(0.72)) vs $3.7M ($0.12) prior year .
  • No formal FY2026 guidance; management expects continued gross margin pressure given baseline inflation and tariffs, and ~$(45)M sales headwind from store closures .

Financial Results

P&L Summary (Quarterly)

MetricQ2 2025 (Sep-2024)Q3 2025 (Dec-2024)Q4 2025 (Mar-2025)
Revenue ($USD Millions)$301.4 $305.8 $295.0
Gross Profit ($USD Millions)$106.4 $104.8 $97.3
Operating Income (Loss) ($USD Millions)$13.2 $10.0 $(23.8)
Net Income ($USD Millions)$5.6 $4.6 $(21.3)
Diluted EPS (GAAP) ($)$0.18 $0.15 $(0.72)
Adjusted Diluted EPS ($)$0.17 $0.19 $(0.09)
YoY Revenue Change (%)(6.4%) (3.7%) (4.9%)

Comparable Store Sales by Category (Adjusted for Days Where Noted)

CategoryQ2 2025Q3 2025Q4 2025
Front end/shocks(5%) +6% +27%
Batteries+20% +30% +25%
Brakes(12%) (6%) +2%
Tires(4%) (1%) +2%
AlignmentsFlat +13% (1%)
Maintenance(7%) (2%) +1%
Total Comp (Adj.)(5.8%) (0.8%) +2.8%

KPIs and Operational Metrics

KPIQ2 2025Q3 2025Q4 2025
Stores (end of quarter)1,272 1,263 1,260
Cash from Operations ($USD Millions)$88 (first half) $103 (first nine months) $132 (FY2025)
AP / Inventory Ratio (%)185% (end Q2) 179% (end Q3) 177% (end FY2025)
Dividend per Share ($)$0.28 (Q2 paid Sep 10, 2024) $0.28 (Q3 paid Dec 17, 2024) $0.28 (Q4 paid Mar 11, 2025)

Estimates vs Actual (Q4 2025)

MetricConsensus*Actual*
Revenue ($USD Millions)$289.5$295.0
Primary EPS ($)$0.03$(0.09)
EBITDA ($USD Millions)$22.8$15.9
Primary EPS - # of Estimates5—
Revenue - # of Estimates5—
Values retrieved from S&P Global.
Bolded results: Revenue beat; EPS and EBITDA miss.
Citations: consensus/actuals from S&P Global estimates tool.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company guidanceFY2026Not providedNot providing formal guidance; will provide “perspective” Maintained “no guidance”
Comparable store salesFY2026N/AExpect YoY comp growth; Q1-to-date comps ~+7% New positive commentary
Gross marginFY2026N/AExpected to remain pressured; tougher Q1 compare; partial offsets from closures and ops improvements New cautious commentary
Sales impact from closuresFY2026N/A~$(45)M reduction from store optimization New headwind
Store closure costsQ1 FY2026N/A~$10–$15M, primarily Q1 FY2026 New cost
Capital expendituresFY2026N/A~$$25–$35M New range
DividendQ1 FY2026—$0.28 per share, payable Jun 17, 2025, record Jun 3, 2025 Maintained

Earnings Call Themes & Trends

TopicQ2 2025 (Oct-2024)Q3 2025 (Jan-2025)Q4 2025 (May-2025)Trend
Tire mix and promotionsTrade-down to Tier 3 pressured margins; manufacturer + self-funded promos; Tier 3 ~30% mix Continued Tier 3 strength; self-funded promos; aiming to restore margin over time Gross margin down 250 bps YoY on tire mix and promos; tire units up in March Ongoing margin pressure; improving units late-quarter
Customer traffic vs ticketTraffic down ~9%, ASP up; comps improved through quarter Traffic down low-single digits; ticket up mid-single; March traffic positive Sequential comp and margin improvement intra-quarter; Q1 FY2026 comps ~+7% Traffic bending positive; ticket supportive
Supply chain/ATDATD relationship business-as-usual; $6.8M earnout receivable remains $6.8M earnout outstanding; no reserve; operations/deliveries normal No material change; clarified service levels; relationship intact Stable partner; watch execution
Tariffs/macroTariff mentions limitedWeather disruption expected to benefit services later Tariffs likely raise costs; team mobilized to mitigate; possible price adjustments Rising tariff risk; mitigation efforts
Store portfolio optimizationFocus on ~300 underperforming stores performance Underperforming stores comps ~250 bps above overall 145 closures identified; limited sales impact (~5% FY2025 sales) and profitability uplift expected Accelerated action; FY2026 headwind then margin tailwind
Service category executionBatteries, alignments improving; brakes lagging Strong attachments via ConfiDrive; brakes improved in Jan Front-end/shocks +27%, batteries +25%, brakes +2% Broadening service strength

Management Commentary

  • “Preliminary quarter-to-date comparable store sales [are] up approximately 7%” (CEO Peter Fitzsimmons) .
  • “We have identified four key areas of focus… closing 145 underperforming stores, improving our customer experience and selling effectiveness, driving profitable customer acquisition and activation, and increasing merchandising productivity, including mitigating tariff risk” (CEO Fitzsimmons) .
  • “Gross margin impact related to the self-funded promotions is really our tire promotions… buy three, get one… buy one, get one… we expect [gross margins] to remain pressured” (CFO Brian D’Ambrosia) .
  • “The closures will have limited impact on sales, but [are] expected to deliver meaningful improvement in profitability… 145 stores generated ~5% of total sales in FY2025” (CEO Fitzsimmons) .

Q&A Highlights

  • Gross margin drivers quantified: ~160 bps material cost (tire mix + self-funded promos), ~80 bps technician labor (wage inflation), with minor occupancy deleverage from fewer days .
  • Traffic vs ticket: traffic down low-single digits, ticket up mid-single digits; March traffic positive, supporting April–May comps .
  • ATD partnership and receivable: no material change; $6.8M earnout remains, no reserve, operations normal .
  • Store closures: geographically dispersed; focus on those unlikely to meet earnings profile; management doesn’t anticipate further closures this year beyond the 145 .
  • FY2026 cadence: gross margin likely underperform in Q1 vs tough comp, more even through year; expect adjusted EPS improvement YoY despite tariff cost pressure .

Estimates Context

  • Q4 FY2025 results vs S&P Global consensus: revenue beat ($295.0M vs $289.5M*), Primary EPS miss (adjusted $(0.09) vs $0.03*), EBITDA miss ($15.9M* vs $22.8M*). Values retrieved from S&P Global.
  • Implication: Models should reflect margin pressure from tire mix and promotions, the $45M FY2026 sales headwind from closures, and potential tariff-driven cost increases; preliminary Q1 comps strength (+7%) supports top-line trajectory .

Key Takeaways for Investors

  • Mixed quarter: modest revenue beat contrasted with significant EPS/EBITDA shortfall on margin compression; focus near-term on cost/tariff mitigation and portfolio optimization .
  • Store closures are a key FY2026 catalyst: expect sales headwind (~$(45)M) but margin and operating income uplift as underperforming units exit .
  • Watch mix normalization: sustained improvement in service categories (front-end/shocks, batteries) and stabilization in tires needed to rebuild margin; promos will persist near-term .
  • Liquidity intact for execution: $508.7M availability and $132M FY2025 CFO support capex ($25–$35M) and dividend continuity .
  • Tariff risk rising: supplier negotiations and possible consumer price adjustments underway; model gross margin conservatively in FY2026 .
  • Trading lens: Near-term rallies may hinge on continued comp momentum (Q1-to-date ~+7%) and evidence of gross margin stabilization; valuation should reflect EPS downside risk if tariffs and mix persist .
  • Medium-term thesis: Execution on the four-point plan (closures, customer experience, targeted acquisition/activation, merchandising productivity) is the path to operating margin recovery and normalized EPS power .

Citations:

  • Q4 press release and exhibits
  • Q4 call transcript
  • Prior quarters: Q3 press release/call ; Q2 press release/call

S&P Global estimates disclaimer: Values marked with an asterisk (*) were retrieved from S&P Global.