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Pep Boys reports first quarter 2014 results

Published 10 June 2014

The Pep Boys - Manny, Moe & Jack, the nation's leading automotive aftermarket service and retail chain, announced the following results for the thirteen weeks (first quarter) ended May 3, 2014.

Sales

Sales for the thirteen weeks ended May 3, 2014 increased by $2.6 million, or 0.5%, to $538.8 million from $536.2 million for the thirteen weeks ended May 4, 2013. Comparable sales decreased 1.4%, consisting of an increase of 3.2% in comparable service revenue and a decrease of 2.8% in comparable merchandise sales. In accordance with GAAP, service revenue is limited to labor sales, while merchandise sales include merchandise sold through both our service center and retail lines of business. Re-categorizing sales into the respective lines of business from which they are generated, comparable service center revenue decreased 1.0%, while comparable retail sales decreased 1.9%.

Earnings

Net earnings for the first quarter of fiscal 2014 were $1.6 million ($0.03 per share) as compared to net earnings of $3.9 million ($0.07 per share) recorded in the first quarter of fiscal 2013. Operating profit for the first quarter of fiscal 2014 increased to $6.0 million from $3.5 million recorded in the first quarter of fiscal 2013. The 2014 results included, on a pre-tax basis, a $1.2 million asset impairment charge and $4.0 million in litigation accruals. The 2013 results included, on a pre-tax basis, a $1.2 million asset impairment charge and a $3.8 million tax benefit.

Commentary

"Our first quarter operating profit improved significantly over the prior year driven primarily by higher gross margin," said President and CEO, Mike Odell. "Our core service business remains solid and we expect tire sales trends to improve in the back half of the year. Through the first five weeks of the second quarter, we have seen our service business improve to a positive comp despite the continued pressure in tire pricing. Our service business footprint also continues its growth with 25 new Service & Tire Centers planned for 2014."

Mike continued, "Our customer strategies are gaining traction and our target customer groups have been endorsing our improved customer experience with new and repeat business, but we need to get to critical mass to accelerate our performance. In May, June and July, we are grand re-opening in our Road Ahead format all of our stores in our San Francisco, Boston and Charlotte markets. By differentiating ourselves in a competitive landscape, we aim to grow market share with our target customer groups and, in turn, our sales and profits."

"We also continued to see strong growth in pepboys.com digital operations, which includes on-line service appointments, tire sales that are made on-line and installed in our stores, ship-to-home sales and products that are ordered on-line and picked up in our stores. From a mix of business perspective, sales through digital operations accounted for 4.0% of our sales during the first quarter as compared to 2.3% for the prior year," Mike added.



Source: Company Press Release