guided third- and fourth-quarter earnings below Wall Street's consensus, saying analysts' have overestimated the positive impact of its current restructuring plan.
The Philadelphia-based auto parts and service company said it expects a profit of 23 cents to 25 cents a share in the third quarter, excluding a gain of 2 cents a share from store closures. Analysts, however, are calling for 29 cents a share. Pep Boys earned 28 cents a share in the year-ago period.
In the fourth quarter, the company sees earnings of 2 cents to 4 cents a share, compared with analysts' consensus of 12 cents a share. Pep Boys earned 3 cents a share in last year's quarter.
The company said it believes analysts' have underestimated the investment needed to make its restructuring plan successful. But Pep Boys said it is "encouraged" by an improvement in sales and expects third-quarter same-store sales to increase 2% to 3% over the prior year. For the fourth quarter, the company forecast same-store sales up 4% to 6% over last year.
The company also said its financial performance should keep improving through 2004.
Shares of Pep Boys were falling 45 cents, or 2.6%, to $16.60 in Tuesday premarket trading.