The Pep Boys — Manny, Moe & Jack (NYSE: “PBY”), the nation’s leading automotive aftermarket service and retail chain, today announced results for the thirteen weeks (first quarter) ended April 28, 2012.
Sales for the thirteen weeks ended April 28, 2012 increased by $11.1 million, or 2.2%, to $524.6 million from $513.5 million for the thirteen weeks ended April 30, 2011. Comparable sales decreased 2.8%, consisting of a 1.2% comparable service revenue decrease and a 3.2% comparable merchandise sales decrease. In accordance with GAAP, service revenue is limited to labor sales, while merchandise sales include merchandise sold through both our service center and retail lines of business. Re-categorizing sales into the respective lines of business from which they are generated, comparable Service Center Revenue (labor plus installed merchandise and tires) decreased 0.7%, while comparable Retail Sales (DIY and Commercial) decreased 4.6%.
Net earnings for the first quarter of fiscal 2012 decreased to $1.1 million ($0.02 per share) from $12.4 million ($0.23 per share) recorded in the same period last year. The 2012 quarter included, on a pre-tax basis, $1.6 million in merger related costs.
President & CEO Mike Odell said, “It has been a challenging start to the year, due to the mild winter weather, restrained customer spending and not clicking on all cylinders in our performance. But we have made the necessary changes and expect to return to year-over-year profit growth in the third and fourth quarters, as we had done for 11 consecutive quarters through the third quarter of 2011.”
Mike continued, “We currently intend to use our approximately $100 million of cash on hand together with settlement proceeds and cash flow from operations, to pay down our debt, settle our interest rate swap and retire our frozen defined benefit pension plan this year. Our debt covenants currently prevent us from buying back shares. Pep Boys is in its best financial position in over a decade, allowing us to continue our store growth, with approximately 40 new stores this year.”