Pep Boys–Manny, Moe & Jack posted net income of $1.6 million on net sales of $538.8 million for its first quarter ended May 3, 2014. That compares to earnings of $3.9 million on sales of $536.2 million for 1Q 2013.
Operating income increased 71.4%, from $3.5 million to $6 million. The company's net income-to-sales ratio was 0.2%.
Comparable store sales for the quarter decreased 1.4%, broken out as follows:
* an increase of 3.2% in comparable service revenue, defined as labor sales; and
* a decrease of 2.8% in comparable merchandise sales.
Comparable retail sales decreased 1.9%.
“Our first-quarter operating profit improved significantly over the prior year driven primarily by higher gross margin,” says CEO and President Mike Odell. “Our core service business remains solid and we expect tire sales trends to improve in the back half of the year.
"Through the first five weeks of the second quarter, we have seen our service business improve to a positive comp despite the continued pressure in tire pricing. Our service business footprint also continues its growth, with 25 new Service & Tire Centers planned for 2014.
“Our customer strategies are gaining traction and our target customer groups have been endorsing our improved customer experience with new and repeat business, but we need to get to critical mass to accelerate our performance," says Odell.
"In May, June and July, we are grand re-opening in our Road Ahead format all of our stores in our San Francisco, Boston and Charlotte markets. By differentiating ourselves in a competitive landscape, we aim to grow market share with our target customer groups and, in turn, our sales and profits.
"We also continued to see strong growth in pepboys.com digital operations, which includes on-line service appointments, tire sales that are made on-line and installed in our stores, ship-to-home sales and products that are ordered on-line and picked up in our
stores. From a mix of business perspective, sales through digital operations accounted for
4% of our sales during the first quarter as compared to 2.3% for the prior year.”
There are more than 800 Pep Boys locations in 35 states and Puerto Rico. They represent more than 7,500 service bays. For more information, visit www.pepboys.com.