Pep Boys gives up some gains a day after 1Q earns

Shares of Pep Boys Manny Moe & Jack gave up ground on Wednesday, a day after the auto parts retailer and repair chain reported a better-than-expected first-quarter profit that sent its stock sharply higher.

Morgan Joseph analyst Jefrey Blaeser praised the results in a Wednesday client note and maintained his "Buy" rating. The results seem to indicate that a smooth change of management is taking place at the Philadelphia-based company.

In April, Pep Boys Chief Executive Jeff Rachor resigned, a move that Blaeser called "unexpected." Michael R. Odell was named the company's interim CEO.

However, the analyst said the company's sale leasebacks _ a major source of first-quarter revenue _ could slow as the company's balance sheet improves.

Separately, Stifel Nicolaus's David Schick was upbeat on the company's results and praised its direction following the recent management changes.

However, he maintained his "Hold" rating and said he was cautious on the stock, saying rising fuel prices and reduced driving may result in slower business for the company.

Early Tuesday, Pep Boys said its first-quarter profit grew 47 percent to $4.7 million. Excluding certain items, income from continuing operations came in at 10 cents per share. Analysts polled by Thomson Financial expected a loss of 3 cents per share.

The results sent shares higher by 89 cents, or 10.2 percent, to close at $9.62 on Tuesday.

The stock fell 46 cents, or 4.8 percent, to $9.16 in morning trading Wednesday.