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Pep Boys - Manny, Moe & Jack Meets on the Top Line, Misses Where it Counts

Pep Boys - Manny, Moe & Jack (NYSE: PBY  ) reported earnings on Sep. 4. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended July 28 (Q2), Pep Boys - Manny, Moe & Jack met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue improved slightly and GAAP earnings per share grew significantly.

Gross margins dropped, operating margins shrank, net margins expanded.

Revenue details
Pep Boys - Manny, Moe & Jack logged revenue of $525.7 million. The three analysts polled by S&P Capital IQ foresaw revenue of $528.3 million on the same basis. GAAP reported sales were 0.6% higher than the prior-year quarter's $522.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.12. The three earnings estimates compiled by S&P Capital IQ averaged $0.16 per share. GAAP EPS of $0.61 for Q2 were 135% higher than the prior-year quarter's $0.26 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 24.8%, 110 basis points worse than the prior-year quarter. Operating margin was 3.2%, 140 basis points worse than the prior-year quarter. Net margin was 6.3%, 360 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $534.1 million. On the bottom line, the average EPS estimate is $0.16.

Next year's average estimate for revenue is $2.11 billion. The average EPS estimate is $0.38.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 165 members out of 211 rating the stock outperform, and 46 members rating it underperform. Among 58 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give Pep Boys - Manny, Moe & Jack a green thumbs-up, and 13 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Pep Boys - Manny, Moe & Jack is outperform, with an average price target of $10.00.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On September 05, 2012, at 2:16 PM, expoiltthespread wrote:

    I guess Mr. Market does not agree with your assessment as the stock is up nearly 6% today. I suppose the market expects another buyout offer to emerge.

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The Pep Boys CAPS Rating: **