Core Insights - Reliance, Inc. reported strong Q4 growth with net sales of $3.5 billion, an increase of 11.9% year-over-year, and record tons sold of 6.4 million, up 6.2% for the full year 2025 [1][4][8] - The company repurchased $594.1 million of common stock in 2025, reducing outstanding shares by 4%, and increased its quarterly dividend by 4.2% to $1.25 per share [1][21][22] - Management expressed confidence in continued demand and pricing strength entering 2026, with expectations for tons sold to increase by 5% to 7% in Q1 2026 compared to Q4 2025 [11][23] Financial Performance - Q4 2025 net sales were $3,498.6 million, a decrease of 4.2% from Q3 2025 but an increase of 11.9% from Q4 2024 [2][37] - Gross profit for 2025 was $4.11 billion, consistent with the prior year, while non-GAAP FIFO gross profit margin expanded to 29.6% [9][10] - Net income attributable to Reliance for Q4 2025 was $116.5 million, down 38.5% year-over-year, with diluted EPS of $2.22, a decrease of 38.2% from Q4 2024 [2][10][37] Market Dynamics - The company achieved a significant increase in domestic market share to approximately 17% from 15% in 2024, driven by strong operational execution and market demand [11] - Demand in non-residential construction, the largest end market, improved, with expectations for continued healthy demand in early 2026 [13] - The broader manufacturing sector showed improved demand, particularly in military, industrial machinery, and construction machinery sectors [14] Cash Flow and Capital Allocation - Reliance generated cash flow from operations of $276.1 million in Q4 2025 and $831.4 million for the full year [19] - For 2025, the company deployed $1.18 billion towards stockholder returns and organic growth activities, including $594.1 million in share repurchases and $254.7 million in dividends [20][22] Business Outlook - The company anticipates a modest improvement in FIFO gross profit margin in Q1 2026 and expects non-GAAP earnings per diluted share to be in the range of $4.50 to $4.70, reflecting year-over-year growth of 19% to 25% [23]

Core Viewpoint - AutoZone, Inc. (NYSE:AZO) is experiencing resilient demand and improving long-term earnings power, leading to a bullish outlook from JP Morgan analyst Christopher Horvers, who maintains an Overweight rating with a price target of $4,850 [1]. Demand and Comp Trends - Recent industry checks indicate no structural slowdown in DIY demand, despite some early-quarter volatility, with better weekend spending and supportive weather contributing to restored momentum [3]. - The analyst expects both DIY and "Do It For Me" (DIFM) comparable sales to accelerate, driven by firmer inflation, steady demand, and market share gains [3]. - Management anticipates mid-single-digit inflation in the near term, rising to high-single-digit levels by spring [3]. Margins, Costs, and Earnings Power - The gross margin outlook has been trimmed due to softer merchandising benefits and persistent mix pressure, with last year's LIFO impact creating a significant headwind [4]. - Management expects another large LIFO headwind early in the year, with easing pressure anticipated later, while the underlying gross margin is expected to remain flat to slightly higher, excluding LIFO effects [4]. - The SG&A outlook reflects faster store-level cost growth associated with higher comparable sales and expansion efforts, aligning with management's strategy to defend market share and support new locations [5]. Earnings Outlook - The changes in cost structure and market dynamics are expected to lead to a modestly higher operating margin and a slightly stronger EPS forecast, suggesting a potential positive shift in the earnings revision cycle [5]. - Rolling estimates forward is anticipated to enhance out-year earnings power as sales accelerate and LIFO effects reverse [6].