Pep Boys (PBY) Misses Q1 EPS by 3c; Comps Fell 1.4%

Pep Boys (NYSE: PBY) reported Q1 EPS of $0.03, $0.03 worse than the analyst estimate of $0.06. Revenue for the quarter came in at $538.8 million versus the consensus estimate of $542.14 million.

Comparable sales decreased 1.4%, consisting of an increase of 3.2% in comparable service revenue and a decrease of 2.8% in comparable merchandise sales.

“Our first quarter operating profit improved significantly over the prior year driven primarily by higher gross margin,” said President and CEO, Mike Odell. “Our core service business remains solid and we expect tire sales trends to improve in the back half of the year. Through the first five weeks of the second quarter, we have seen our service business improve to a positive comp despite the continued pressure in tire pricing. Our service business footprint also continues its growth with 25 new Service & Tire Centers planned for 2014.”

Mike continued, “Our customer strategies are gaining traction and our target customer groups have been endorsing our improved customer experience with new and repeat business, but we need to get to critical mass to accelerate our performance. In May, June and July, we are grand re-opening in our Road Ahead format all of our stores in our San Francisco, Boston and Charlotte markets. By differentiating ourselves in a competitive landscape, we aim to grow market share with our target customer groups and, in turn, our sales and profits.”

“We also continued to see strong growth in pepboys.com digital operations, which includes on-line service appointments, tire sales that are made on-line and installed in our stores, ship-to-home sales and products that are ordered on-line and picked up in our stores. From a mix of business perspective, sales through digital operations accounted for 4.0% of our sales during the first quarter as compared to 2.3% for the prior year,” Mike added.

For earnings history and earnings-related data on Pep Boys (PBY) click here.

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