PHILADELPHIA -- Pep Boys has announced results for the third quarter (13 weeks) and nine months ended Oct. 31.
 
Sales for the 13 weeks increased by $8.4 million, or 1.8 percent, to $472.6 million from $464.2 million for the thirteen weeks ended Nov. 1, 2008. Comparable sales increased 1.6 percent, consisting of an 8.9 percent comparable service revenue increase and a 0.1 percent comparable merchandise sales decrease.

Net Earnings for the third quarter of fiscal 2009 increased to $2.1 million (4 cents per share) from the $7.3 million loss (14 cents per share) recorded in the same period last year. The 2009 results include, on pre-tax basis, a net charge of $0.3 million, consisting of a $3.3 million asset impairment charge offset by a $1.3 million gain from sale leaseback transactions, a $1 million reduction in inventory-related accruals and a $0.7 million gain from an insurance settlement.

Sales for the 39 weeks ended Oct. 31 decreased by $4.3 million, or 0.3 percent, to $1,458 million from $1,462.3 million for the 39 weeks ended Nov. 1, 2008. Comparable sales decreased 0.4 percent, consisting of a 5.9 percent comparable service revenue increase and a 1.8 percent comparable merchandise sales decrease.

Net Earnings for the first nine months of fiscal 2009 increased to $20.8 million (40 cents per share) from the $2.8 million (5 cents per share) recorded in the same period last year. The 2009 results include, on a pre-tax basis, a net benefit of $5.9 million, consisting of a $6.2 million gain resulting from bond repurchases, a $1.3 million gain from sale leaseback transactions, a $1 million reduction in inventory-related accruals and a $0.7 million gain from an insurance settlement partially offset by a $3.3 million asset impairment charge. The 2008 results included, on a pre-tax basis, a net benefit of $13.1 million, consisting of a $3.5 million gain resulting from bond repurchases and a $9.6 million gain from asset dispositions (primarily sale leaseback transactions). The 2008 results also included a one-time tax benefit of $2.2 million resulting from the recording of a deferred tax asset.

“We are pleased to report our first comparable store revenue increase since the fourth quarter of 2006, as well as our first increase in overall customer count since the first quarter of 2004,” said CEO Mike Odell. “We are also excited about the acceleration of our strategy to add Service & Tire Centers surrounding our existing Supercenters. During the third quarter, we acquired 10 Florida Tire locations to increase our total presence in the Orlando market to 16 stores. We also opened four other Service & Tire Centers, two in Southern California and two in Chicago, bringing our year-to-date openings to 20 as we pursue our strategic growth plan.”

Odell continued, “We are three-quarters of the way towards achieving our 2009 ‘Back in Black’ commitment, with another profitable quarter on the books. Our results through the third quarter of this year show significant improvement over the prior year, especially when considering the one-time benefits included in 2008. While we are pleased with our strong revenue growth in our service and commercial businesses, as well as the stability in our DIY core product categories, discretionary spending still remains a challenge to our accessories and complementary product categories, and is expected to continue through the fourth quarter’s holiday season.”

“The cash flows generated from our positive sales trend, coupled with opportunistic single-store sale leaseback transactions, have allowed us to fund our Service & Tire Center acquisitions without using our revolving line of credit, which carried a zero balance at quarter end,” added CFO Ray Arthur.

Pep Boys has approximately 6,000 service bays within more than 580 stores located in 35 states and Puerto Rico.