Pep Boys Announces Third Quarter Results
15 November 1999
Pep Boys Announces Third Quarter Results
PHILADELPHIA--Nov. 11, 19999--The Pep Boys-- Manny, Moe & Jack , the nation's leading automotive aftermarket retail and service chain, announced its operating results for the thirteen weeks ended October 30, 1999.Operating Results
Third Quarter
Sales
Sales for the quarter ended October 30, 1999, were $605,833,000, 1.6% less than the $615,967,000 recorded last year when the Company operated 109 Express stores that were sold or closed in October 1998. Service labor revenue, exclusive of installed product, climbed to a record $111,995,000, 8.7% greater than the $103,055,000 recorded last year.
Comparable store sales, which include a 5.2% increase in comparable service labor revenue and a 0.5% decline in comparable merchandise sales, rose 0.5% during the quarter.
Service labor revenue, exclusive of installed product, and tires accounted for 18.5% and 17.0%, respectively, of total sales.
Earnings
Net earnings for the period were $9,930,000 ($.20 per share-basic and diluted), 353.3% greater than the loss of $3,921,000 ($.06 per share-basic and diluted) recorded last year. Last year's results included after tax charges to earnings of $16,160,000 ($.26 per share-basic and diluted) to reflect the sale and closure of 109 Express stores.
Nine Months
Sales
Sales for the nine months ended October 30, 1999, rose to a record $1,839,552,000, slightly greater than the $1,835,492,000 recorded last year. Service labor revenue, exclusive of installed product, grew to a record $336,330,000, 9.2% more than the $308,000,000 recorded last year.
Comparable store sales, which includes comparable merchandise sales and comparable service labor revenue increases of 2.9% and 5.1%, respectively, rose 3.3% during the first nine months of the year.
Service labor revenue, exclusive of installed product, and tires accounted for 18.3% and 16.0%, respectively, of total sales.
Earnings
Net earnings for the nine months ended October 30, 1999, were $40,088,000 ($.79 per share-basic and diluted), 68.2% greater than the $23,841,000 ($.39 per share-basic and diluted) earned last year. Last year's results included after tax charges to earnings of $16,160,000 ($.26 per share-basic and diluted) to reflect the sale and closure of 109 Express stores.
Store Expansion Program
Five new Supercenters, which feature 12 service bays, were opened during the third quarter. The new Supercenters are in Boston, MA; Seattle, WA; North Brunswick, NJ; San Carlos, CA; and Port Huron, MI.
As of October 30, 1999, Pep Boys operated 655 stores, including 6,811 service bays, in 37 states and Puerto Rico. Pep Boys anticipates opening eight Supercenters during the fourth quarter which will bring the number of new stores opened during the fiscal year ending January 29, 2000, to 25, the cost of which will have been funded from operations.
Commentary
Pep Boys' CEO, Mitchell G. Leibovitz, made the following comments:
"Despite continued strength in service and tires as well as significant growth in our commercial delivery program, below budget "do-it-yourself" sales had a negative impact on third quarter earnings. This situation was compounded by challenging prior year sales comparisons resulting from the completion of our commercial delivery rollout.
"Nonetheless, our competitive advantages - service parts and labor, tires and commercial delivery - all of which coincide with the growth categories of the automotive aftermarket, achieved solid comparable store sales increases and represented an aggregate of 55% of total revenue.
"We continue to believe that despite industry-wide weakness in the do-it-yourself category, our non-franchised, all-brands service capability and supply chain will provide us with unique growth opportunities. As a result, we remain convinced that the steps that we are taking to reposition Pep Boys will enable us to maximize our strategic advantages and enhance shareholder value in the technologically advancing aftermarket."
Pep Boys Financial Highlights
Thirteen Thirteen
Weeks Ended Weeks Ended
October 30, 1999 October 31, 1998 % Change
---------------- ----------------- ---------
Total Revenues $ 605,833,000 $ 615,967,000 - 1.6
Net Earnings (Loss) $ 9,930,000 $ <3,921,000>(a) + 353.3
Basic Earnings
(Loss) Per Share $ .20 $ <.06>(a) + 433.3
Diluted Earnings
(Loss) Per Share $ .20 $ <.06>(a) + 433.3
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
October 30, 1999 October 31, 1998 % Change
---------------- ----------------- ---------
Total Revenues $1,839,552,000 $1,835,492,000 + 0.2
Net Earnings $ 40,088,000 $ 23,841,000(a) + 68.2
Basic Earnings
Per Share $ .79 $ .39(a) + 102.6
Diluted Earnings
Per Share $ .79 $ .39(a) + 102.6
(a) Includes after tax charges to earnings of $16,160,000, $.26 per
share-basic and diluted, to reflect the costs associated with the
sale and closure of 109 Express stores
Note: Certain statements made herein are forward-looking which 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 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, product costs and the ability to enhance the profitability of the commercial delivery program.
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.