PHILADELPHIA — The Pep Boys announced the following results for the 13 weeks (first quarter) ending May 4, 2013.
Sales
Sales for the 13 weeks ended May 4, 2013, increased by $11.6 million, or 2.2 percent, to $536.2 million from $524.6 million for the 13 weeks ending April 28, 2012. Comparable sales increased 1 percent, consisting of an increase of 4.2 percent in comparable service revenue and an increase of 0.1 percent in comparable merchandise sales. 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 increased 3.9 percent, while comparable retail sales decreased 2.1 percent.
Earnings
Net earnings for the first quarter of fiscal 2013 were $3.9 million ($0.07 per share) as compared to net earnings of $1.1 million ($0.02 per share) recorded in the same period last year. The 2013 results included, on a pre-tax basis, a $1.2 million asset impairment charge while the 2012 results included, on a pre-tax basis, $1.6 million of merger related costs. The 2013 results also included a $3.8 million tax benefit due to state hiring credits recorded in the first quarter of 2013.
Commentary
“Our revenue performance continues to improve,” said President and CEO Mike Odell. “All of our service business categories experienced positive sales comps, with the exception of tires. While not quite positive yet, tire sales comps are improving and we are capturing more margin dollars from each tire sold. During the first month of our second quarter, our positive comparable store sales trend has continued.
“Our more focused customer-centered strategy that we introduced on our last call is beginning to take shape. You can see signs of it in our current marketing materials or experience the full vision in our first test store in Tampa, Fla. Based on the very encouraging results to date in this first store, we have decided to expand the test to the balance of the Tampa market. The changes touch almost every aspect of our business model. It starts with our associates, who are learning how to build lasting relationships with all customers – whether service or retail – and offer solutions for all of their automotive needs. We expect to test our new strategy in the Tampa market for an extended period of time to understand its results fully before proceeding to other markets. As we evaluate our results in this test lab, we are also considering how to bring the non-capital elements to the chain at a faster pace.”
