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.

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“After we saw some softness in consumer demand in October, the Monro team drove growth in comparable store sales in November and December. Further, when adjusting for a shift in the timing of the Christmas holiday in the prior year, the months of November and December as well as the third quarter, mark the first time we delivered positive comps on a 2-year stack in over two years. This has also enabled us to report our fourth consecutive quarter of positive comps for the first time in several years. We believe we were able to take share in our tire category as soon as winter hit as our stores were well-prepared with proper staffing, an updated tire assortment, and additional marketing spend. For the second quarter in a row, we delivered solid gross margin performance with a gross margin rate that expanded 60 basis points year-over-year to 34.9%. We also re-invested the selling, general, and administrative expense savings from our closed stores into additional marketing to support topline growth. For the third quarter in a row, we reduced inventory levels across the system, this time by over $7 million. We have now achieved an overall inventory reduction of more than $28 million, which is 16% since the end of March, just nine months ago. This is a clear indication of how we’ve continued to manage our inventories more efficiently in fiscal 2026”, said Peter Fitzsimmons, President and Chief Executive Officer.

Company Overview

Started as a single location in Rochester, New York, Monro (NASDAQ: MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years.

With $1.18 billion in revenue over the past 12 months, Monro is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers.

As you can see below, Monro struggled to generate demand over the last three years. Its sales dropped by 4.3% annually as it closed stores and observed lower sales at existing, established locations.

This quarter, Monro missed Wall Street’s estimates and reported a rather uninspiring 4% year-on-year revenue decline, generating $293.4 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 1.2% over the next 12 months. While this projection suggests its newer products will catalyze better top-line performance, it is still below the sector average.

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Store Performance

Number of Stores

Monro operated 1,115 locations in the latest quarter. Over the last two years, the company has generally closed its stores, averaging 5.7% annual declines.

When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability.

Same-Store Sales

The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket).

Monro’s demand has been shrinking over the last two years as its same-store sales have averaged 1.3% annual declines. This performance isn’t ideal, and Monro is attempting to boost same-store sales by closing stores (fewer locations sometimes lead to higher same-store sales).

In the latest quarter, Monro’s same-store sales rose 1.2% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.

Key Takeaways from Monro’s Q4 Results

It was good to see Monro beat analysts’ EPS expectations this quarter. On the other hand, its revenue slightly missed. Overall, this print was mixed. The stock remained flat at $20.06 immediately following the results.

Indeed, Monro had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).