The Pep Boys – Manny, Moe & Jack announced the following results for the thirteen (third quarter) and thirty-nine (nine months) weeks ended November 1, 2014.
Third quarter sales
Sales for the 13 weeks ended November 1, 2014 increased by $10.5 million, or 2.1%, to $517.6 million from $507.0 million for the 13 weeks ended November 2, 2013. Comparable sales increased 1.2%, consisting of an increase of 6.1% in comparable service revenue and a decrease of 0.2% in comparable merchandise sales.
In accordance with GAAP, service revenue is limited to labor sales, while merchandise sales include merchandise sold through both 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 3.7%, while comparable retail sales decreased 1.8%.
Third quarter earnings
Net loss for the third quarter of fiscal 2014 was $2.0 million ($0.03 per share) as compared to net earnings of $1.0 million ($0.02 per share) recorded in the third quarter of fiscal 2013. The 2014 results included, on a pre-tax basis, a $1.4 million asset impairment charge and $1.4 million in severance charges. The 2013 results included, on a pre-tax basis, a $2.0 million asset impairment charge and $0.6 million in severance charges.
Nine months sales
Sales for the 39 weeks ended November 1, 2014 increased by $11.3 million, or 0.7%, to $1,582.2 million from $1,570.8 million for the 39 weeks ended November 2, 2013. Comparable sales decreased 0.7%, consisting of a 4.9% comparable service revenue increase and a 2.3% comparable merchandise sales decrease. Re-categorizing sales (see above), comparable service center revenue increased 0.8%, while comparable retail sales decreased 2.4%.
Nine months earnings
Net loss for the first nine months of 2014 was $0.6 million ($0.01 per share) as compared to net earnings of $10.2 million ($0.19 per share) for the first nine months of fiscal 2013. The 2014 results included, on a pre-tax basis, a $5.2 million asset impairment charge, a $4.0 million litigation charge and $2.4 million in severance charges. The 2013 results included, on a pre-tax basis, a $4.9 million asset impairment charge and $0.6 million in severance charges. In addition, the 2014 results included a $0.9 million tax expense related to valuation allowances.
“Our recent top-line growth has continued into the fourth quarter,” said interim CEO John Sweetwood. “Particular highlights are tires, commercial and eCommerce sales; however, this balance of business shift has continued to pressure gross margin rate.
“Our Road Ahead stores continue to produce positive results. Cincinnati and Denver will be completed in the fourth quarter, with grand re-openings scheduled for the first quarter of 2015. Baltimore, which will serve as our first test of a reduced average per-store investment, will be grand re-opened in the second quarter of 2015. We have engaged Spencer Stuart to conduct our CEO search, which is progressing as planned.”
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