Pep Boys Reports Q1 Results
June 10 2008 - 7:00AM
Business Wire
The Pep Boys - Manny, Moe & Jack (NYSE:PBY), the nation's
leading automotive aftermarket retail and service chain, announced
the following results for the thirteen weeks (first quarter) ended
May 3, 2008. Operating Results First Quarter Sales Sales for the
thirteen weeks ended May 3, 2008 were $498.0 million, as compared
to $539.6 million for the thirteen weeks ended May 5, 2007.
Comparable Sales decreased 5.6%, including a 6.2% comparable
merchandise sales decrease and a 2.9% comparable service revenue
decrease. In accordance with GAAP, merchandise sales includes
merchandise sold through both our retail and service center lines
of business and service revenue is limited to labor sales.
Re-categorizing Sales into the respective lines of business from
which they are generated, comparable Service Center Revenue (labor
plus installed merchandise and tires) increased 0.6% and comparable
Retail Sales (DIY and Commercial) decreased 10.2%. Earnings Net
Earnings from Continuing Operations increased to $5.3 million or
$0.10 per share (basic and diluted) from Net Earnings from
Continuing Operations of $3.1 million or $0.06 per share (basic and
diluted) for the comparable period in the prior year. Net Earnings
increased to $4.7 million or $0.9 per share (basic and diluted)
from net earnings of $3.2 million or $0.6 per share for the prior
year. Commentary Interim CEO Mike Odell said, �We are pleased with
the progress we have made this quarter. Our service center business
revenue and profitability increased. We are broadening our core
automotive assortment offering and see positive trends in the
categories that have been re-assorted. Our remaining non-core
clearance inventory is down to $12.6 million and we expect to
complete the sell-through by the end of the second quarter. And,
most importantly, we are energizing our team to serve our
customers, because that's where it all starts.� He continued, �We
announced our long-term strategic plan last November and our vision
remains unchanged - to take our leading position in the automotive
services and accessories categories and become the automotive
solutions provider of choice for the value-oriented customer. In
order to achieve this vision, we are continuing to lead our
turnaround by growing our profitable service center business and
leveraging our big boxes with improved parts coverage to support
our service, retail and commercial customers. We are updating our
sales floor assortments in our automotive superstores to be
dominant in the eyes of our customers. And, of course, we
consistently pursue profit improvement through increased
productivity, margin and expense controls.� CFO Ray Arthur
commented, �During the quarter, we completed two sale leaseback
transactions allowing us to further reduce our long term debt by
$58.7 million and build $87.3 in cash and equivalents. Please note
that first quarter 2008 Net Earnings From Continuing Operations
includes, on a pre-tax basis, a $5.5 million Net Gain from
Dispositions of Assets resulting from sale leaseback transactions.
First quarter 2007 Net Earnings From Continuing Operations
included, on a pre-tax basis, a $3.7 million gain from an insurance
claim for stores impaired during Hurricane Katrina in 2005 ($1.3
million of which was recognized in Cost of Merchandise sales) and a
$3.9 million charge to SG&A for CEO transition costs.� Pep Boys
has over 560 stores and approximately 6,000 service bays in 35
states and Puerto Rico. Along with its vehicle repair and
maintenance capabilities, the Company also serves the commercial
auto parts delivery market and is one of the leading sellers of
replacement tires in the United States. Customers can find the
nearest location by calling 1-800 -PEP-BOYS or by visiting
pepboys.com. Certain statements contained herein constitute
"forward-looking statements" within the meaning of The Private
Securities Litigation Reform Act of 1995. The word "guidance,"
"expect," "anticipate," "estimates," "forecasts" and similar
expressions are intended to identify such forward-looking
statements. Forward-looking statements include management's
expectations regarding implementation of its long-term strategic
plan, future financial performance, automotive aftermarket trends,
levels of competition, business development activities, future
capital expenditures, financing sources and availability and the
effects of regulation and litigation. Although the Company believes
that the expectations reflected in such forward-looking statements
are based on reasonable assumptions, it can give no assurance that
its expectations will be achieved. The Company's actual results may
differ materially from the results discussed in the forward-looking
statements due to factors beyond the control of the Company,
including the strength of the national and regional economies,
retail and commercial consumers' ability to spend, the health of
the various sectors of the automotive aftermarket, the weather in
geographical regions with a high concentration of the Company's
stores, competitive pricing, the location and number of
competitors' stores, product and labor costs and the additional
factors described in the Company's filings with the SEC. The
Company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events. Investors have an opportunity to listen to the Company�s
quarterly conference calls discussing its results and related
matters. The call for the first quarter will be broadcast live on
Tuesday, June 10, 2008 at 8:30 a.m. ET over the Internet at the
Vcall website, located at http://www.investorcalendar.com. To
listen to the call live, please go to the website at least 15
minutes early to register, download and install any necessary audio
software. For those who cannot listen to the live broadcast, a
replay will be available shortly after the call. Supplemental
financial information will be available the morning of June 10 on
Pep Boys' website at www.pepboys.com. � Pep Boys Financial
Highlights Millions of Dollars Except Per Share Amounts � Thirteen
weeks ended � May 3, 2008 � May 5, 2007 � Total Revenues $ 498.0 $
539.6 � Net Earnings From Continuing Operations $ 5.3 $ 3.1 � Basic
Earnings Per Share: Average Shares 52,063,000 53,122,000 � Net
Earnings From Continuing Operations $ 0.10 $ 0.06 � Diluted
Earnings Per Share: Average Shares 52,170,000 53,634,000 � Net
Earnings From Continuing Operations $ 0.10 $ 0.06
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