The Pep Boys – Manny, Moe & Jack announced the following results for the third quarter and nine months ending Nov. 2, 2013.
Third Quarter Sales and Earnings
Sales for the thirteen weeks ended November 2, 2013 decreased by $2.6 million, or 0.5%, to $507.0 million from $509.6 million for the thirteen weeks ended October 27, 2012. Comparable sales decreased 2.8%, consisting of a 0.5% comparable service revenue increase and a 3.6% comparable merchandise sales decrease. 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 2.5%, while comparable retail sales decreased 3.1%.
Net earnings for the third quarter of fiscal 2013 were $1.0 million ($0.02 per share) as compared to a net loss of $6.8 million ($0.13 per share) for the third quarter of fiscal 2012. On a pre-tax basis, the 2013 results included a $2.0 million asset impairment charge and a $0.6 million severance charge, while the 2012 results included $11.2 million in debt refinancing expense and an $8.8 million asset impairment charge, partially offset by the reversal of $0.9 million of compensation expense.
Nine Months Sales and Earnings
Sales for the thirty-nine weeks ended November 2, 2013 increased by $11.0 million, or 0.7%, to $1,570.8 million from $1,559.9 million for the thirty-nine weeks ended October 27, 2012. Comparable sales decreased 1.0%, consisting of a 1.6% comparable service revenue increase and a 1.7% comparable merchandise sales decrease. Re-categorizing sales (see above), comparable service center revenue increased 0.4%, while comparable retail sales decreased 2.6%.
Net earnings for the first nine months of 2013 were $10.2 million ($0.19 per share) as compared to $27.4 million ($0.51 per share) for the first nine months of fiscal 2012. On a pre-tax basis, the 2013 results included a $4.9 million asset impairment charge and a $0.6 million severance charge, while the 2012 results included $42.8 million of merger termination fees (net of related expenses), $11.2 million in debt refinancing expense, an $8.8 million asset impairment charge and a $0.7 million severance charge, partially offset by the reversal of $0.9 million of compensation expense.
“Our strategically important maintenance and repair service business grew in sales for the sixth consecutive quarter,” said President and CEO, Mike Odell. "As the weather has turned colder, tire sales have started to improve, with mid-level price points and branded tires leading the way. Competitive pressures, however, continue to challenge sales of lower price point tires.
"Our Road Ahead format is expanding with the 18 recently acquired Service & Tire Centers in Southern California being converted and the grand reopening of six Supercenters and five Service & Tire Centers in Tampa, Florida. The performance out of the gate of the nine new Service & Tire Centers previously opened this year in the Road Ahead format has been ahead of original projections. And while it has only been a few weeks, we are very encouraged by Tampa's results. While monitoring results, we have begun plans to convert three additional smaller markets (20 Supercenters) in the first half of 2014."
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