Pep Boys Earnings: Profit Streak Snapped by a Loss

On top of dropping to a loss in the third quarter, Pep Boys Manny Moe & Jack (NYSE:PBY) also came in short of analyst estimates. Pep Boys Manny Moe & Jack is engaged mainly in automotive repair and maintenance and in the sale of automotive tires, parts, and accessories through a chain of stores.

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Pep Boys Manny Moe & Jack Earnings Cheat Sheet

Results: Reported a loss of $6.8 million (13 cents per diluted share) in the quarter. Pep Boys Manny Moe & Jack had a net income of $7 million or 13 cents per share in the year-earlier quarter.

Revenue: Fell 2.4% to $509.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Pep Boys Manny Moe & Jack fell short of the mean analyst estimate of 17 cents per share. It fell short of the average revenue estimate of $543.6 million.

Quoting Management: “Positives for the quarter include a 3.4% increase in comparable service customer transactions and recovering tire margins,” said President and Chief Executive Officer Mike Odell. “The service customer increase was again driven by maintenance and repair services. Tire margins had declined significantly over the previous 19 months, but have now been recovering for the past three months.” Mike continued, “We also reached our next eCommerce milestone with the launch of Buy Online, Ship to Home. This complements our previously launched online capabilities of service appointment scheduling, TreadSmart (tires from information to installation) and Buy Online, Pick Up In Store. We are continuing to further integrate our complete automotive service offerings and automotive superstore with our emerging digital capabilities.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 5.9%.

The company has now fallen short of estimates in the last two quarters. In the second quarter, it missed expectations by 3 cents with net income of 12 cents versus a mean estimate of net income of 15 cents per share.

The company’s loss in the latest quarter follows profits in the previous two quarters. The company reported a profit of $33 million in the second quarter and a profit of $1.1 million in the first quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 10 cents per share, up from 8 cents ninety days ago. At 41 cents per share, the average estimate for the fiscal year has fallen from 58 cents ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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