The Pep Boys – Manny, Moe & Jack announced the following results for the 13 weeks (first quarter) ended May 2, 2015.
Sales
Sales for the 13 weeks ended May 2, 2015 increased by $3.4 million, or 0.6%, to $542.3 million from $538.8 million for the 13 weeks ended May 3, 2014. Comparable sales increased 0.8%, consisting of an increase of 1.3% in comparable service revenue and an increase of 0.6% 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 1.9%, while comparable retail sales decreased 0.5%.
Earnings
Net earnings for the first quarter of fiscal 2015 were $11.9 million ($0.22 per share) as compared to net earnings of $1.6 million ($0.03 per share) recorded in the first quarter of fiscal 2014. Operating profit for the first quarter of fiscal 2015 increased to $23.1 million from $6.0 million recorded in the first quarter of fiscal 2014.
The 2015 results included, on a pre-tax basis, a $10.0 million sale of a leasehold interest offset by a $0.8 million asset impairment charge. The 2014 results included, on a pre-tax basis, a $1.2 million asset impairment charge and $4.0 million in litigation accruals.
Commentary
“We are pleased to report the third consecutive quarter of positive comparable stores sales,” said interim CEO John Sweetwood. “Once again, tires, commercial, fleet and digital led the way. More importantly, we improved our operating profit by 24% (excluding the discrete items discussed above) by maintaining our gross profit margins and reducing SG&A expense.
“During the quarter, we also generated $10.0 million from the sale of a leasehold interest, a portion of which was reinvested into our next Road Ahead market – Baltimore – that is scheduled to be grand re-opened in July.”
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