Pep Boys Earnings Cheat Sheet: Net Income Sinks

Pep Boys Manny Moe & Jack (NYSE:PBY) reported its results for the first quarter. 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: Net income for Pep Boys Manny Moe & Jack fell to $1.1 million (2 cents per share) vs. $12.4 million (23 cents per share) a year earlier. This is a decline of 91.4% from the year-earlier quarter.

Actual vs. Wall St. Expectations: Pep Boys Manny Moe & Jack fell in line with the mean analyst estimate of 2 cents per share.

Quoting Management: President & CEO Mike Odell said, “It has been a challenging start to the year, due to the mild winter weather, restrained customer spending and not clicking on all cylinders in our performance. But we have made the necessary changes and expect to return to year-over-year profit growth in the third and fourth quarters, as we had done for 11 consecutive quarters through the third quarter of 2011.” Mike continued, “We currently intend to use our approximately $100 million of cash on hand together with settlement proceeds and cash flow from operations, to pay down our debt, settle our interest rate swap and retire our frozen defined benefit pension plan this year. Our debt covenants currently prevent us from buying back shares. Pep Boys is in its best financial position in over a decade, allowing us to continue our store growth, with approximately 40 new stores this year.”

Key Stats:

The company met estimates last quarter after falling short of forecasts in the previous quarter with a loss of -7 cents versus a mean estimate of net income of 11 cents per share.

The company reported a profit last quarter, following a quarter of being in the red. The company booked a net loss of $7 million, or 13 cents per share, in the third quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 24 cents a share to 16 cents over the last seven days. The average estimate for the fiscal year is now 62 cents per share, down from 95 cents sixty days ago.

Competitors to Watch: O’Reilly Automotive, Inc., Advance Auto Parts, Inc., AutoZone, Inc., U.S. Auto Parts Network, Inc., Midnight Hldgs. Group Inc, Tilden Associates Inc, and Pick-Ups Plus, Inc.

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

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