Pep Boys – Manny, Moe & Jack’s PBY adjusted earnings of 2 cents per share for the third quarter of fiscal 2015 (ended Oct 31, 2015) missed the Zacks Consensus Estimate of 6 cents. However, earnings increased marginally from 1 cent recorded in the prior-year quarter.
On a reported basis, Pep Boys posted earnings of $1.3 million or 2 cents per share in the third quarter as against a loss of $2 million or 3 cents per share in the year-ago quarter. The third-quarter fiscal 2015 reported figure includes gains of $6.0 million from the sale of two locations, offset by asset impairment charges of $0.8 million, $2.9 million merger and acquisition-related expense, $1 million legal expense and $0.9 million severance charges on a pre-tax basis. The prior-year quarter figure incorporates an asset impairment charge of $1.4 million and $1.4 million of severance charges.
Revenues for the reported quarter went down 0.1% to $508.1 million from $517.6 million in the prior-year quarter. Revenues also lagged the Zacks Consensus Estimate of $519 million.
Comparable sales declined 1.8% during the reported quarter due to a 2.5% fall in comparable service revenues and a 1.6% drop in comparable merchandise sales. Revenues from merchandise sales went down 1.7% to $389.1 million, while revenues from service edged down 2.2% to $119 million.
Operating profits in the third quarter of fiscal 2015 increased significantly to $4.4 million from $0.6 million recorded in the third quarter of fiscal 2014.
Financial Position
Pep Boys had cash and cash equivalents of $71.3 million as of Oct 31, 2015, compared with $36.4 million as of Nov 1, 2014. Long-term debt stood at $194.5 million as of Oct 31, 2015 compared with $231.5 million as of Nov 1, 2014.
In the first nine months of fiscal 2015, Pep Boys’ cash flow from operations stood at $80.9 million, reflecting a significant improvement from $11.6 million in the year-ago period. Capital expenditure decreased to $32.4 million from $55 million in the first nine months of fiscal 2014.
Based in Philadelphia, Pep Boys supplies tires, batteries, new and remanufactured parts for vehicles, chemicals and maintenance items, fashion, electronics, and performance accessories. It also provides non-automotive merchandise such as generators, power tools and personal transportation products.
Zacks Rank & Key Picks
Currently, Pep Boys carries a Zacks Rank #3 (Hold).
Better-ranked automobile stocks include General Motors Co. GM, Fox Factory Holding Corp. FOXF and O'Reilly Automotive Inc. ORLY. All these stocks carry a Zacks Rank #2 (Buy).
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