The Pep Boys — Manny, Moe & Jack (NYSE: “PBY”), the
nation’s leading automotive aftermarket service and retail chain,
today announced results for the thirteen (second quarter) and
twenty-six (first half) weeks ended July 31, 2010.
Second Quarter
Sales
Sales for the thirteen weeks ended July 31, 2010 increased by
$15.9 million, or 3.3%, to $504.9 million from $488.9 million for
the thirteen weeks ended August 1, 2009. Comparable sales
increased 1.8%, including a 0.7% comparable service revenue
decrease and a 2.5% comparable merchandise sales increase. 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 (labor plus installed
merchandise and tires) increased 0.1%, while comparable retail
sales (DIY and Commercial) increased 3.4%.
Earnings
Net earnings for the second quarter of fiscal 2010 increased to
$10.6 million ($0.20 per share) from $7.7 million ($0.15 per share)
recorded in the same period last year. The second quarter 2010
results reflect increased sales and improved total gross profit
margin rates and include, on a pre-tax basis, a $2.4 million gain
from the disposition of assets and a $1.0 million reversal of an
inventory related accrual, partially offset by a $1.0 million asset
impairment charge.
First Half
Sales
Sales for the twenty-six weeks ended July 31, 2010 were $1,014.9
million, as compared to $985.4 million for the twenty-six weeks
ended August 1, 2009. Comparable sales increased 1.6%, consisting
of a 0.3% comparable service revenue decrease and a 2.1% comparable
merchandise sales increase. Re-categorizing sales (see above),
comparable service center revenue increased 0.5%, while comparable
retail sales increased 2.6%.
Earnings
Net earnings for the first half of 2010 increased to $22.5
million ($0.43 per share) from the $18.6 million ($0.36 per share)
recorded in the same period last year. The first half 2010 results
reflect increased sales and improved total gross profit margin
rates and include, on a pre-tax basis, a $2.5 million gain from the
disposition of assets and a $1.0 million reversal of an inventory
related accrual, partially offset by a $1.0 million asset
impairment charge. The first half 2009 results included, on a
pre-tax basis, a $6.2 million gain resulting from bond
repurchases.
Commentary
“Our results mark the sixth consecutive quarter of improved
profitability,” said President and CEO Mike Odell. “We continue to
earn the trust of our customers every day by delivering an
experience that is based on speed, expertise, respect and
value.
“Our customer care, value-priced offerings and core automotive
assortments are resonating with our customers and our 18,000
associates are working together to deliver on our vision to be the
automotive solutions provider of choice for the value oriented
customer. We are excited about our growth. So far this year, we
have opened seven Service & Tire Centers and two Supercenters
as well as eight Superhubs with an expanded parts assortment and
two Speed Shops within existing Supercenters.”
“Disciplines are the key to our improved profitability allowing
us to convert modest sales growth into large profit gains and
positive cash flow,” commented CFO Ray Arthur. “We ended the
quarter with $92.4 million in cash, no drawings on our line of
credit and the liquidity to continue expansion of our Service &
Tire Center network. We anticipate opening a total of approximately
35 new locations, consisting of Service & Tire Centers and
Supercenters, this year.”
Pep Boys has more than 6,000 service bays within over 590 stores
located in 35 states and Puerto Rico. Along with its full-service
vehicle maintenance and repair capabilities, the Company also
serves the commercial auto parts delivery market and is one of the
leading sellers of replacement tires in the United States.
Customers can find the nearest location by calling 1-800-PEP-BOYS
or by visiting www.pepboys.com.
Certain statements contained herein constitute “forward-looking
statements” within the meaning of The Private Securities Litigation
Reform Act of 1995. The word “guidance,” “expect,” “anticipate,”
“estimates,” “forecasts” and similar expressions are intended to
identify such forward-looking statements. Forward-looking
statements include management’s expectations regarding
implementation of its long-term strategic plan, future financial
performance, automotive aftermarket trends, levels of competition,
business development activities, future capital expenditures,
financing sources and availability and the effects of regulation
and litigation. Although the Company believes that the expectations
reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its
expectations will be achieved. 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,
retail and commercial consumers’ ability to spend, the health of
the various sectors of the automotive aftermarket, the weather in
geographical regions with a high concentration of the Company’s
stores, competitive pricing, the location and number of
competitors’ stores, product and labor costs and the additional
factors described in the Company’s filings with the SEC. The
Company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events.
Investors have an opportunity to listen to the Company’s
quarterly conference calls discussing its results and related
matters. The call for the second quarter will be broadcast
live on Wednesday, September 8 at 8:30 a.m. ET over the
Internet at the Vcall website, located at
http://www.investorcalendar.com. To listen to the call live, please
go to the website 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 will be
available the morning of September 8 on Pep Boys’ website at
www.pepboys.com.
Pep Boys Financial Highlights
Thirteen Weeks Ended
July 31, 2010
August 1, 2009
Total revenues $ 504,855,000 $ 488,911,000 Net
earnings $ 10,598,000 $ 7,735,000 Basic earnings per share:
Average shares 52,682,000 52,384,000 Basic earnings per
share: $ 0.20 $ 0.15 Diluted earnings per share: Average
shares 53,129,000 52,699,000 Diluted earnings per share: $
0.20 $ 0.15
Twenty-Six weeks ended
July 31, 2010
August 1, 2009
Total revenues $ 1,014,888,000 $ 985,399,000 Net
earnings $ 22,548,000 $ 18,644,000 Basic earnings per share:
Average shares 52,609,000 52,359,000 Basic earnings per
share: $ 0.43 $ 0.36 Diluted earnings per share: Average
shares 53,035,000 52,538,000 Diluted earnings per share: $
0.43 $ 0.36
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