PHILADELPHIA -- Pep Boys has announced its financial results for the second quarter and first half, both of which ended Aug. 2.
Sales for the second quarter were $500 million as compared to $552.1 million in 2007. Comparable sales decreased 7.5 percent, including an 8 percent comparable merchandise sales decrease and a 5.2 percent comparable service revenue decrease. In accordance with GAAP, merchandise sales includes merchandise sold through both the company’s 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) decreased 1.9 percent, while comparable Retail Sales (DIY and Commercial) decreased 11.6 percent.
Earnings From Continuing Operations Before Income Taxes were $6.6 million as compared to $6.3 million in 2007. The company said these results reflect disciplined spending control, reduced interest expense as a result of paying down debt, a $4.1 million gain from the disposition of assets and improved product margin rates. These benefits were largely offset by gross profit pressure associated with the reduction in sales.
Net Earnings From Continuing Operations increased to $5.8 million or 11 cents per share (basic and diluted) as compared to $3.9 million or 7 cents per share (basic and diluted) in 2007. Net Earnings increased to $5.4 million or 10 cents per share (basic and diluted) as compared to $4.2 million or 8 cents per share (basic and diluted) in 2007. Net Earnings From Continuing Operations and Net Earnings for the second quarter of 2008 include a one-time $2.2 million tax benefit resulting from the recording, during this quarter, of a deferred tax asset due to a June 2007 state tax law change.
Sales for the first half were $998.1 million as compared to $1,091.7 million in 2007. Comparable sales decreased 6.6 percent, including a 7.1 percent comparable merchandise sales decrease and a 4 percent comparable service revenue decrease. In accordance with GAAP, merchandise sales includes merchandise sold through both Pep Boys’ 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) decreased 0.6 percent, while comparable Retail Sales (DIY and Commercial) decreased 10.9 percent.
Earnings From Continuing Operations Before Income Taxes were $16 million as compared to $11.4 million in 2007. The results reflect disciplined spending control, reduced interest expense as a result of paying down debt, gains from the disposition of assets and improved product margin rates. These benefits were largely offset by the gross profit pressure associated with the reduction in sales.
Net Earnings From Continuing Operations increased to $11 million or 21 cents per share (basic and diluted) as compared to $7 million or 13 cents per share (basic and diluted) in 2007. Net Earnings increased to $10.1 million or 19 cents per share (basic and diluted) as compared to $7.4 million or 14 cents per share in 2007. Net Earnings From Continuing Operations and Net Earnings for the first half of 2008 include a one-time $2.2 million tax benefit resulting from the recording, during the second quarter, of a deferred tax asset due to a June 2007 state tax law change.
Commenting on the results, Interim CEO Mike Odell said, “During the quarter, we continued to improve our customer service, which is key to our future success. CSI scores increased, reflecting our ‘Customer First’ focus. While we are pleased with the progress we made transforming our sales floors to re-establish ourselves as the dominant solutions provider for the automotive aftermarket customer, we are disappointed with our sales results, which were impacted by the disruption, coupled with the general pullback in consumer spending. However, those core automotive categories that have been re-assorted are showing positive trends. And we expect to complete the re-assortment of our core automotive categories by the end of this third quarter. Our remaining non-core clearance inventory is down to $1.2 million, and is being returned to our distribution centers for liquidation. We also continue to tightly control spending resulting in SG&A being well below prior year levels.”
For more information, visit: http://www.pepboys.com.
