The Auto Channel
The Largest Independent Automotive Research Resource
Official Website of the New Car Buyer

Pep Boys Reports First Quarter 2009 Results


PHOTO

PHILADELPHIA, june 8, 2009: The Pep Boys – Manny, Moe & Jack , the nation’s leading automotive aftermarket service and retail chain, today announced results for the thirteen weeks (first quarter) ended May 2, 2009.

Sales

Sales for the thirteen weeks ended May 2, 2009 were $496.5 million, as compared to $498.0 million for the thirteen weeks ended May 3, 2008. Comparable Sales decreased 0.3%, including a 1.3% comparable merchandise sales decrease and a 3.8% comparable service revenue increase. In accordance with GAAP, merchandise sales includes merchandise sold through both our retail and service center lines of business and service revenue is limited to labor sales. Re-categorizing Sales into the respective lines of business from which they are generated, comparable Service Center Revenue (labor plus installed merchandise and tires) increased 3.3% and comparable Retail Sales (DIY and Commercial) decreased 3.3%. First quarter 2008 sales included $5.1 million in clearance sales of de-emphasized complementary merchandise.

Earnings

Earnings From Continuing Operations Before Income Taxes increased to $20.0 million for the first quarter of fiscal 2009 from the $9.4 million recorded in the same period last year. Net Earnings increased to $10.9 million ($0.21 per share - basic and diluted) for the first quarter of fiscal 2009 from the $4.7 million ($0.09 per share - basic and diluted) recorded in same period last year. The first quarter 2009 results include a $6.2 million gain resulting from bond repurchases. The first quarter 2008 results included a $2.9 million gain resulting from bond repurchases and a $5.5 million Net Gain from Dispositions of Assets resulting from sale leaseback transactions.

Commentary

“We are pleased with our progress and our first quarter results,” said CEO Mike Odell. “As our turnaround continues, we will build upon this momentum in the second quarter and throughout 2009. Our television and radio promotions continue to drive customer traffic and sales in our core categories and our expense reductions are making us profitable.”

“Our disciplined approach towards category management and spending reduced our Total Cost of Revenue as a percentage of sales by 40 basis points and our SG&A costs by 210 basis points in Q1 2009 vs. Q1 2008,” remarked CFO Ray Arthur. “In the first quarter, we also capitalized on our strong liquidity position by repurchasing almost $17 million of the Company’s senior subordinated notes for an average purchase price of 63 cents on the dollar.”