Pep Boys Q1 results make clanking sound
PHILADELPHIA — Sales and profit growth were hard to come by at Pep Boys during the first quarter, although the leading provider of automotive services and parts forged ahead with growth plans.
The company said sales for the first quarter ended April 30 increased 0.7% to $513.5 million, and same-store sales decreased 0.6%. Pep Boys accounts for same-store sales a little differently that most retailers, including those in the automotive space, due to its emphasis on automotive repair and parts installation provided via 7,000 service bays at roughly 700 stores. The company’s comparable revenues from service, which consist only of labor, increased 1.6% while merchandise sales declined 1.2%.
The modest sales growth caused the company to report earnings per share of 23 cents, the same as the prior year and well below the 30 cents a share forecast by analysts.
“We recognize that our customers’ spending is constrained due to gas prices, and that the rainy spring reduced demand for appearance products, but this does not alter our long-term strategy to be the automotive solutions provider of choice for the value-oriented customer,” said president and CEO Mike Odell.
Despite the challenging macroeconomic conditions, Odell said Pep Boys has continued to improve operational disciplines and achieved its ninth consecutive quarter of improved profitability.
“Our service business, which is the lead business in our transformation, continued its positive sales comp trend and continues to grow through the addition of service and tire centers,” Odell said.
During the first quarter, the company opened nine new locations, including the acquisition of seven locations in Seattle-Tacoma. In May, Pep Boys acquired 85 Big 10 locations in Florida, Georgia and Alabama.