The distribution segment dominates the headlines this week, with all but one of our top five news stories focusing around the auto parts retail world.
Kicking off the week’s top news is AutoZone’s third quarter financial report, which showed a 9.3 percent increase in net sales for the Tennessee-based business, compared to 2008’s numbers. AutoZone reported net sales of $1.7 billion for its third quarter, which ended May 9. Net income for the quarter increased $15.1 million, or 9.5 percent, over the same period last year to $173.7 million, while diluted earnings per share increased 25.9 percent to $3.13 per share from $2.49 per share in the year-ago quarter.
In other news from the distribution segment, O’Reilly Automotive this week announced that an agreement has been reached with the U.S. Securities and Exchange Commission (SEC) to resolve a long-running investigation involving the entity formerly known as CSK Auto Corp. More than three years prior to O’Reilly’s acquisition of CSK, the company was investigated for questionable accounting practices during the fiscal years 2001 to 2006. In April of this year two former senior executives of CSK Auto Corp. were charged in a 31-count indictment for a scheme to manipulate the company’s reported earnings. The trial for the two indicted former execs is set for October 6 in the United States District Court for Arizona, meanwhile the SEC investigation into matters at CSK has now been settled without the company admitting or denying any wrongdoing.
Out on the West Coast, Pep Boys will be celebrating the grand opening of its first Speed Shop this weekend. Located in Los Angeles, the new Speed Shop combines the old time feel of traditional speed shops with the latest in performance products and accessories that can usually only be found online or in specialty shops. This 4,700-square-foot location, with 22 service bays that can install nearly all of the store’s high performance parts on-site, joins the 74 other Pep Boys locations in the Los Angeles market.
Advance Auto Parts has selected SPSS Inc., a global provider of predictive analytics software and solutions, to help the retailer improve inventory control, customer satisfaction and increase sales. SPSS announced this week that Advance will use its SPSS Predictive Analytics Software (PASW) to support its Availability Excellence initiative, through which Advance has made a commitment to “delivering the right parts to the right place at the right time — every time.” Advance will use the software for market basket analysis and to help optimize its supply chain to accurately manage inventory at warehouses and individual stores.
In manufacturing news, Visteon is the latest auto supplier to file for Chapter 11 bankruptcy protection. This week, Visteon and certain of its U.S. subsidiaries voluntarily filed petitions in the U.S. Bankruptcy Court for the District of Delaware for relief under Chapter 11 of the U.S. Bankruptcy Code. No Visteon subsidiaries or joint ventures outside the U.S. are part of the filing. However, in late March one of Visteon’s subsidiaries in the United Kingdom, Visteon U.K. Ltd., filed for administration with the U.K. High Court under the Insolvency Act 1986. Visteon said it plans to continue operations through the restructuring process and expects to fund its operations with its U.S. cash balance, cash flows from operations and a debtor-in-possession facility.
