Fourth Quarter Earnings Rebound at Pep
Boys
Business Editors
PHILADELPHIA--March 22, 2001--The Pep Boys -
Manny, Moe & Jack , the nation's leading automotive
aftermarket retail and service chain, announced a $.24 earnings per
share improvement for the fourth quarter ended February 3, 2001.
Operating Results
Fourth Quarter
Sales
Sales for the quarter ended February 3, 2001, which included one
more week than the comparable quarter last year and which reflected
the negative impact of 38 store closures and other steps that were
taken in the third quarter in conjunction with implementing the
Company's previously announced "Profit Enhancement Plan," were
$547,390,000, 1.4% less than the $554,981,000 recorded last year.
Service labor revenue, exclusive of installed product, climbed to
$108,926,000, 4.5% greater than the $104,193,000 recorded last year.
Continued weakness in "do-it-yourself" sales, compounded by
adverse weather, softening economic conditions and the negative impact
of steps that were taken in the third quarter to enhance the Company's
future profitability, collectively contributed to the 6.0% decline in
comparable store sales.
During the quarter, comparable service labor revenue was
essentially flat while comparable merchandise sales declined 7.3%.
Service labor revenue, installed product, tires and commercial
delivery accounted for approximately 56% of total sales.
Earnings
An improvement in merchandise and service center margins as well
as lower operating expenses more than offset $3.4 million ($.07 per
share-basic and diluted) of carryover expenses associated with
implementing the "Profit Enhancement Plan."
As a result, the Company reported net earnings for the period of
$1,292,000 ($.03 per share-basic and diluted), compared to the loss of
$10,785,000 ($.21 per share-basic and diluted) recorded last year.
Fiscal Year
Sales
Sales for the fiscal year ended February 3, 2001, which included
one more week than last year and which reflected the negative impact
of 38 store closures and other steps that were taken in the third
quarter to enhance the Company's future profitability, were
$2,418,468,000, 1% higher than the $2,394,533,000 recorded last year.
Service labor revenue, exclusive of installed product, grew to a
record $460,988,000, 4.6% more than the $440,523,000 recorded last
year.
Comparable store sales, which included a comparable merchandise
sales decrease of 2.2% and a comparable service labor revenue increase
of 2.2%, declined 1.4% during the fiscal year. Service labor revenue,
installed product, tires and commercial delivery accounted for
approximately 56% of total sales.
Earnings
As a result of the $96,503,000 in pre-tax expenses that were
recognized in the third quarter in conjunction with the "Profit
Enhancement Plan" and other related charges, the Company sustained an
after-tax loss for the fiscal year ended February 3, 2001, of
$51,094,000 ($1.00 per share-basic and diluted) as compared to net
earnings of $29,303,000 ($.58 per share-basic and diluted) achieved
last year.
Store Expansion and Capital Spending Program
Fiscal 2000
A 12-service bay Supercenter in South Mayaguez, PR, was opened
during the fourth quarter, which brings the number of new units opened
during the fiscal year up to five.
As of February 3, 2001, Pep Boys operated 628 stores and 6,498
service bays in 36 states and Puerto Rico.
Fiscal 2001
Pep Boys anticipates opening two Supercenters during the fiscal
year ending February 2, 2002.
Excluding the proceeds from the sale of any closed stores or
distribution centers, capital spending for the fiscal year ending
February 2, 2002, is budgeted to be approximately $35 million,
significantly less than the Company's depreciation.
Commentary
Pep Boys CEO, Mitchell G. Leibovitz, made the following comments:
"We are pleased to report a significant improvement in our fourth
quarter results despite the negative impact that increased vehicle
complexity has had on "do-it-yourself" repairs, a downturn in consumer
confidence and generally poor weather conditions.
"The improvement in our performance was a direct result of the
steps that we took in the third quarter to enhance our future
profitability. Although many of those steps have had a negative impact
on sales, they have had a positive impact on earnings.
"With our unparalleled customer appeal and the competitive
advantages that we enjoy with our 6,500 service bays, Pep Boys is
strategically well positioned in an economic environment that will
force many people to defer the purchase of a new vehicle."
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*T
Pep Boys Financial Highlights
Fourteen Thirteen
Weeks Ended Weeks Ended
February 3, 2001 January 29, 2000
---------------- ----------------
Total Revenues $ 547,390,000 $ 554,981,000
Net Earnings (Loss) $ 1,292,000 $ ( 10,785,000 )
Basic Earnings Per Share $ .03 $ ( .21 )
Diluted Earnings (Loss)
Per Share $ .03 $ ( .21 )
Fifty-Three Fifty-Two
Weeks Ended Weeks Ended
February 3, 2001 January 29, 2000
---------------- ----------------
Total Revenues $ 2,418,468,000 $ 2,394,533,000
Net Earnings $ ( 51,094,000 ) $ 29,303,000
Basic Earnings Per Share $ ( 1.00 ) $ .58
Diluted Earnings
Per Share $ ( 1.00 ) $ .58
Notes: Certain statements made herein, including those discussing
management's expectations for future periods, are forward-looking and
involve risks and uncertainties.
The Company's actual results may differ materially from the
results discussed in the forward-looking statements due to factors
beyond the control of the Company, including the strength of the
national and regional economies and retail and commercial consumers'
ability to spend, the health of the various sectors of the market that
the Company serves, the weather in geographical regions with a high
concentration of the Company's stores, competitive pricing, location
and number of competitors' stores and product and labor costs.
Further factors that might cause such a difference include, but
are not limited to, the factors described in the Company's filings
with the Securities and Exchange Commission.
In accordance with the SEC's recently adopted Regulation FD (fair
disclosure), investors will now have an opportunity to listen to the
Company's quarterly conference calls discussing its results and
related matters. The calls will be broadcast live over the Internet at
Broadcast Networks' Vcall web site, located at http://www.vcall.com.
The call for the fourth quarter will be broadcast live on Friday,
March 23, at 9:00 AM EST. To listen to the call live, please go to the
web site at least 15 minutes early to register, download and install
any necessary audio software. For those who cannot listen to the live
broadcast, a replay will be available shortly after the call.
Supplemental financial information is available on Pep Boys web
site at www.pepboys.com.
Internet:http://www.pepboys.com
