PHILADELPHIA – Pep Boys has announced financial results for the 13 (fourth quarter) and 52 (fiscal year) weeks ended Jan. 31, 2015.
Sales for the 13 weeks increased by $6.7 million, or 1.3 percent, to $502.4 million from $495.7 million for the 13 weeks ended Feb. 1, 2014.
Net loss for the fourth quarter of fiscal 2014 was $26.7 million (50 cents per share) as compared to a net loss of $3.3 million (6 cents per share) for the fourth quarter of fiscal 2013. On a pre-tax basis, the 2014 results included, a net charge of $12.4 million comprised of a $23.9 million goodwill impairment charge, a $2.3 million asset impairment charge and $0.5 million in severance, partially offset by a $14.3 million gain from the disposition of certain properties. The 2013 results included a $2.8 million asset impairment charge and $0.4 million of debt refinancing expense.
Sales for fiscal year 2014 increased by $18 million, or 0.9 percent, to $2,084.6 million from $2,066.6 million for fiscal year 2013.
Net loss for fiscal year 2014 was $27.3 million (51 cents per share) as compared to earnings of $6.9 million (13 cents per share) for fiscal year 2013. On a pre-tax basis, the 2014 results included, a net charge of $24.6 million comprised of a $23.9 million goodwill impairment charge, a $7.5 million asset impairment charge, $4 million in litigation expense and $2.9 million in severance, partially offset by a $13.8 million gain from the disposition of certain properties. The fiscal year 2013 results included, on a pre-tax basis, a net charge of $8.7 million comprised of a $7.7 million asset impairment charge, $0.6 million in severance and $0.4 million of debt refinancing expense.
“The fourth quarter was a time of transition for the company,” said interim CEO John Sweetwood. “We continued to increase our sales in the growing service segment. Our investments in the high-growth areas of our business – commercial, tires, fleet and digital – increased revenue, but temporarily depressed margins. To date in the first quarter, we have generated higher sales and experienced recovering margins.”
Sweetwood continued, “With only three weeks to go in the first quarter of 2015, we are seeing a turnaround in the business. At this point, comparable store sales are up with double-digit growth in commercial, fleet and digital. With margins recovering, combined with improved expense and inventory management, to date we are seeing an improvement in operating profit and cash flow.