Pep Boys announces financial results and growth plans
The Pep Boys - Manny, Moe & Jack reported a net loss of $3.3 million on net sales of $495.7 million for the fourth quarter of fiscal 2013 ended Feb. 2, 2014. In the year-ago quarter, the company reported a net loss of $14.5 million and net sales of $530.8 million.
Net income dropped 46% in fiscal 2013. Pep Boys reported net income of $6.9 million on net sales of $2,066.6 million for the fiscal year. That compares to net income of $12.8 million on sales of $2,090.7 million versus the prior year.
The company’s income-to-sales ratio for 2013 was 0.3%.
The company says results were affected by the loss of one operating week in 2013 as there were 53 operating weeks in 2012. Excluding the fourteenth week of Q4 2012, sales increased by $1.0 million, or 0.2%, while comparable sales decreased 2.4% in the fourth quarter.
Excluding the fifty-third week of 2012, sales increased by $11.9 million, or 0.6%, while comparable sales decreased 1.3%, consisting of a 1.6% comparable service revenue increase and a 2.1% comparable merchandise sales decrease for the year. Comparable service center revenue increased 0.2%, while comparable retail sales decreased 3.1%.
“Our service business continues to grow,” says Mike Odell, CEO and president. “On a comparable store basis, customer count, maintenance and repair sales and tire units all grew quarter over quarter. While retail tire pricing has recently stabilized, prices are still below last year’s level, which has and is expected to continue to negatively impact top line sales results through the second quarter of 2014.
“We are also growing our service footprint, adding 30 Service & Tire Centers during fiscal 2014. These new Service & Tire Centers showcase the welcoming exterior curb appeal and comfortable customer lounge of our new ‘Road Ahead’ format.
“In addition to allowing us to realize our vision to be the best alternative to the dealer, our Road Ahead strategy also allows us to use our retail business to drive our service business.
"Our first completed Road Ahead market in Tampa continues to produce returns in line with our 15% hurdle rate. Based on those results, we are moving forward to complete an additional 20 stores in three markets – San Francisco, Boston and Charlotte – during the first half of 2014 and initiating plans for an additional three markets to be completed in late 2014/early 2015.
“Our new Road Ahead strategy includes strong growth from our digital omnichannel initiatives. Overall, sales from service appointments made online, tires purchased online and installed in our service bays, and products purchased online for store pick up or home delivery grew 152% in the fourth quarter.”
For more stories on Pep Boys see Pep Boys on the ‘Road Ahead’ in Q3 2013.