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Pep Boys earns $36.6 million, plans to open MORE tire stores

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Pep Boys — Manny, Moe & Jack  posted revenue of $36.6 million on sales of nearly $2 billion for its 2010 fiscal year ended Jan. 29, 2011. That compares to income of $23 million on sales of just over $1.9 billion for its fiscal 2009.

The company's net income represented 1.8% of its sales.

Earnings from continuing operations before taxes for fiscal 2010 increased 55% to $58.4 million. The results include a net benefit of $8.4 million, comprised of a $5.9 million reduction in the reserve for excess inventory; a $2.5 million gain from the disposition of assets; and a $1 million reversal of an inventory-related accrual. The benefit was partially offset by a $1 million asset impairment charge.

Comparable store sales increased 2.7%, broken out as follows:

* a 1.1% increase in service revenue (which includes service center revenue);

* a 3.1% increase in store merchandise sales;

* a 2.4% increase in service center revenue (labor plus installed merchandise and tires);

* a 3% increase in retail sales (DIY and commercial).

Fourth Quarter

For the 13-week fourth quarter, Pep Boys recorded earnings of $8.4 million on sales $477.4 million. That compares to revenue of $2.3 million on sales of $452.9 million for the fourth quarter of fiscal 2009.

Comparable store sales for the quarter increased 4.3%, consisting of a 3.4% increase in service revenue (comparable store service center revenue was up 5.8%) and a 4.6% increase in merchandise sales.

“This fourth quarter caps off a successful 2010, as evidenced by our comparable store sales growth, expanding operating margins and new store growth," says CEO and President Mike Odell.

"We expect to continue this trend in 2011, despite the uncertain macro-environment. Every day we wake up charged to execute our vision to be the automotive solutions provider of choice for the value-oriented customer."

"We opened 35 new locations in 2010 -- 28 Service & Tire Centers and seven Supercenters,” he says. “That’s on top of 25 new stores in 2009.

"Our growth will continue to accelerate in 2011, as we have targeted opening 50 new Service & Tire Centers and five Supercenters.”

According to Pep Boys CFO Ray Arthur, the company's "greatly improved operating results" are providing the funding for its growth strategy.

Pep Boys has more than 620 locations, which represent 6,200 service bays in 35 states and Puerto Rico. For more information, visit www.pepboys.com.

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