Acquisitions improve Pep Boys' financial results
Pep Boys-Manny, Moe & Jack posted net income of $7 million on net sales of $522.2 million for its 13-week third quarter ended Oct. 29, 2011. That compares to earnings of $5.7 million on sales of $496.4 million for the same period a year ago.
The company's income-to-sales ratio was 1.3%.
It also posted operating income of $17.3 million, up nearly 15%. Comparable store sales decreased 0.4%, broken out as follows:
* a 0.4% increase in comparable service revenue (labor plus installed merchandise and tires) and
* a 0.6% decrease in comparable merchandise sales.
For the first nine months of its fiscal year, Pep Boys recorded net income of $33.3 million on net sales of nearly $1.56 million, up 17.6% and 3.1%, respectively. Comparable sales decreased 1%, although comparable service revenue was up 0.8%.
“Our service business started to rebound during the third quarter,” says CEO and President Mike Odell. “Our ‘surround sound’ marketing effort coupled with lower gas prices and pent-up demand drove strong tire sales in the last month of the quarter, which have continued into the fourth quarter.
"While our retail business remained soft in a challenging environment for consumers, our service business results and margin enhancement initiatives resulted in our 11th quarter of improved profitability, on a year-over-year basis.”
As part of its surround sound marketing effort, Pep Boys launched TreadSmart during the third quarter.
"Part of our eServe platform, TreadSmart allows customers to research, purchase and schedule the installation of Pep Boys and major brand name tires online at
pepboys.com," says Odell. "We call it ‘information-to-installation.’ We are encouraged by the early results of TreadSmart, which was rolled out chainwide on October 10th.”
Pep Boys added six Service & Tire Centers in the third quarter, increasing its total to 159 outlets.
"Due to our acquisitions, we are well ahead of our 2011 targeted openings and expect to continue our aggressive growth in 2012,” says CFO Ray Arthur. “While we expect to be able to continue to fund our strategic growth through our operating cash flow and revolving line of credit, we continue to monitor the credit markets with an eye toward opportunistically refinancing our 2013 and 2014 maturities.”
Pep Boys has more than 7,000 service bays in more than 700 locations in 35 states and Puerto Rico. For more information, click here.