If tire dealers were hoping a new CEO in charge at Pep Boys — Manny, Moe & Jack might inspire the company to focus less on tire sales, well — get ready to be disappointed.
“We expect service, including commercial, tires, equipment, fleet, partnerships and digital sales to lead the way,” says Scott Sider. The former rental car executive made the remarks during his first earnings call with investors as CEO of Pep Boys on Sept. 9, 2015.
Tire sales at comparable Pep Boys stores were up 3.3% during the second quarter of 2015, ended Aug. 1.
“We continue to see strong sales with national brands,” Sider says. “We are working on expanding our tire segment by increasing the number of brands and increasing the on-site availability as we redefine the retail space within the supercenters.”
David Stern, executive vice president and chief financial officer, says about two-thirds of Pep Boys’ tire offerings are “branded tires.”
Tires were also a key component in Pep Boys’ commercial business. Sider pointed to “double digit sales growth” in the commercial segment, which was “driven by our unique ability to offer tires as part of our product offerings.”
Here’s a look at the Pep Boys financials for the second quarter. (Results from the same period in 2014 follow in parenthesis.)
Net earnings $4.8 million (-$300,000)
Net sales $526.5 million ($525.8 million)
The only mention of the company’s review of “strategic alternatives to enhance shareholder value” came from Sider, who said “the process is continuing,” and reiterated there is no timetable for its conclusion.
“We do not intend to disclose or comment on further developments regarding our review unless or until the board approves a specific action or otherwise concludes this review,” Sider said.
The company did reveal it spent $1.1 million in expenses related to its annual meeting and the strategic alternatives review during the second quarter.
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