Pep Boys Beats Q1 Earnings Estimates - Analyst Blog

Pep Boys - Manny, Moe & Jack PBY had adjusted earnings of 13 cents per share in the first quarter of fiscal 2014 (ended May 3, 2014), compared with 2 cents in the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of 3 cents a share.

On a reported basis, Pep Boys posted earnings of $1.6 million or 3 cents per share compared with $3.9 million or 7 cents per share in the year-ago quarter. Results include an asset impairment charge of $1.2 million and litigation accruals of $4 million in 2014, while the 2013 earnings figure incorporates $1.2 million in asset impairment charge, partially offset by a $3.8 million tax benefit.

Revenues for the 13 weeks ended May 3, 2014 inched up 0.5% to $538.8 million from $536.2 million in the 13 weeks ended May 4, 2013. Revenues lagged the Zacks Consensus Estimate of $553 million.

Comparable sales decreased 1.4% during the quarter, led by a 2.8% decrease in comparable merchandise sales partially offset by a 3.2% increase in comparable service revenues. Revenues from merchandise sales fell 1.3% to $411.9 million, while revenues from service surged 6.6% to $126.9 million.

Financial Position

Pep Boys had cash and cash equivalents of $37.8 million as of May 3, 2014, compared with $56.1 million as of May 4, 2013. Long-term debt stood at $204.5 million as of May 3, 2014 as against $199.5 million as of May 4, 2013.

In the first quarter of fiscal 2014, Pep Boys' cash flow from operations stood at $11.5 million, rising from $9.4 million in the previous year. Capital expenditure increased to $14.6 million from $12.8 million in the first quarter of fiscal 2013.

Based in Philadelphia, PA, Pep Boys supplies tires, batteries, new and remanufactured parts for vehicles, chemicals and maintenance items, fashion, electronic, and performance accessories. It also provides non-automotive merchandise such as generators, power tools and personal transportation products. Currently, the company retains a Zacks Rank #3 (Hold).

Pep Boys is a prominent player in the automotive replacement parts and accessories industry along with Advance Auto Parts Inc. AAP, O'Reilly Automotive Inc. ORLY and CarMax Inc. KMX.