Pep Boys Drives On

I've read a lot of earnings reports in my day and the one that Pep Boys (NYSE: PBY  ) issued last night was one of the scantiest I've seen. The press release that the auto-parts company put out last week about a new distribution center was longer and more in-depth.

The little bit that was said was cautiously optimistic. First-quarter sales increased 10.8% to $566.1 million from a year earlier. Comparable same-store sales rose 11.0%, comparable merchandise sales increased 12.3%, and comparable service revenue was up 5.6%. Net earnings turned to a profit of $16.2 million, or $0.29 per share, compared to a loss of $7.3 million, or $0.14 per share, a year earlier.

But the CEO cautioned that the company was still in the early stages of remodeling its stores and comparisons would be tougher the rest of the year. The retail renewal is part of a strategic plan announced last July, which has also included the introduction of brand-name tires, implementing new customer relationship software, and offering new promotional items.

When I was in Pep Boys a few weeks ago, they were, surprisingly, now selling a wide variety of powered scooter and low-end dirt bikes, four-wheelers, and go-carts. I wasn't sold, but my four-year-old son was, and had he been like eight or so, I might have been, too. It's an interesting strategy.

Investors didn't care too much for the cautionary guidance, and I suspect that most would like to see a faster turnaround time on its remodeling. From a retail sales and marketing standpoint, there's no doubt that Pep Boys is giving AutoZone (NYSE: AZO  ) and Advance Auto Parts (NYSE: AAP  ) some serious competition, but it's a long ways off from putting up the kind of earnings growth the other two are.

Check out our Buying and Maintaining a Car discussion board for all things automobile-related.

Fool contributor Mark Mahorney doesn't own shares of any companies mentioned.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 507709, ~/Articles/ArticleHandler.aspx, 9/24/2014 12:42:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement