The tough times continue at automotive supply retailer The Pep Boys - Manny, Moe & Jack
Here are a few of the call's low-lights:
- Revenue for the year, expected to be $2.18 billion, came up 2% short at $2.138 billion.
- Net loss from continuing operations for the year was $37.4 million, or $0.72 per share.
- Restructuring costs continue to hamstring the trio, contributing a $0.27-per-share loss to the fourth quarter.
- This was the last earnings call for CFO Harry Yanowitz, who announced his departure from the company in January.
While competitors AutoZone
With increased competition from these auto parts stores and car dealers, Pep Boys was right to refocus its business plan. Pep Boys is in the early stages of what the company calls a five-year strategic plan to "refocus on core automotive merchandise, optimize our square footage productivity, and add incremental service bay density through a 'hub and spoke' growth model."
In noncorporate speak, this means the company is closing underperforming stores, increasing its core business inventories (tires, auto parts, car-customizing accessories), tapping the value of its real estate assets through sale-leasebacks and straight sales, and cutting costs.
Despite today's economic conditions, CEO Jeffrey Rachor, who has led Pep Boys for a year, remains confident and believes the company will complete the first step of its strategic plan by the second quarter of 2008. The process won't be easy without a CFO, so investors looking for a turnaround play should pay close attention to who the company brings in to replace Yanowitz.
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