Here’s What Negatively Impacted AutoZone (AZO) in Q4

3 weeks ago 8

Soumya Eswaran

Fri, January 16, 2026 astatine 8:35 AM CST 3 min read

Fenimore Asset Management, an concern absorption company, released its Q4 2025 capitalist letter. A transcript of the aforesaid tin beryllium downloaded here. The banal marketplace was coagulated successful 2025 but volatile. While investors balanced AI enthusiasm, economical uncertainty, and monetary argumentation concerns. The summertime rally was driven by AI-related spending and economical resiliency, whereas the 4th fourth saw a much volatile marketplace owed to valuation pressures and macro uncertainty. Stocks from the large-cap exertion and connection services sectors led the marketplace successful the quarter, with the S&P 500 Index rising 2.66%. The steadfast believes that the inclination of AI stocks outpacing high-quality stocks is unsustainable. In Q4 2025, Fenimore Small Cap Strategy returned -4.12%, trailing its benchmark, the Russell 2000 Index’s 2.19% return. The underweight vulnerability to low-quality stocks drove the underperformance successful the quarter. Fenimore Dividend Focus Strategy declined -4.41% successful Q4 compared to the Russell Midcap Index’s 0.16% return. Furthermore, Fenimore Value Strategy declined -1.17% successful Q4 compared to the Russell Midcap Index’s 0.16% return. Investments successful the fiscal and concern sectors led to the comparative underperformance of the Strategy successful the quarter. The steadfast expects mixed marketplace conditions successful 2026 arsenic galore AI-related stocks look costly portion high-quality companies are trading astatine multi-year lows, creating opportunities. In addition, delight cheque the fund’s apical 5 holdings to cognize its champion picks successful 2025.

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In its fourth-quarter 2025 capitalist letter, Fenimore Asset Management highlighted stocks specified arsenic AutoZone, Inc. (NYSE:AZO). AutoZone, Inc. (NYSE:AZO) was among the cardinal show detractors successful Fenimore Value Strategy during the quarter. AutoZone, Inc. (NYSE:AZO) is simply a retailer of automotive replacement parts and accessories. The one-month instrumentality of AutoZone, Inc. (NYSE:AZO) was 2.16%, and its shares gained 7.34% of their worth implicit the past 52 weeks. On January 15, 2026, AutoZone, Inc. (NYSE:AZO) banal closed astatine $3,465.45 per share, with a marketplace capitalization of $57.64 billion.

Fenimore Asset Management stated the pursuing regarding AutoZone, Inc. (NYSE:AZO) successful its 4th fourth 2025 capitalist letter:

"Our apical detractors to show were BRO, AutoZone, Inc. (NYSE:AZO), and FAST. Despite the headwinds, we judge that their underlying concern fundamentals stay strong. Despite coagulated gross growth, AZO’s higher operating expenses and a substantial, non-cash LIFO inventory complaint negatively impacted earnings. The opening of much than 140 caller stores and investments successful proviso concatenation hubs were the sources of these costs. While these front-loaded expenses pressured quarterly margins, we spot them arsenic astute superior allocation for semipermanent marketplace stock gains, particularly successful its commercialized segment."