The Pep BoysManny Moe & Jack (PBY, Financial) filed Quarterly Report for the period ended 2012-10-27.
Pep Boys - Manny, Moe & Jack has a market cap of $560.5 million; its shares were traded at around $9.87 with a P/E ratio of 52.9 and P/S ratio of 0.3. Pep Boys - Manny, Moe & Jack had an annual average earning growth of 13.1% over the past 5 years.
Total gross profit decreased by $23.0 million, or 5.8%, to $374.3 million in the first nine months of 2012 from $397.3 million in the first nine months of 2011. Total gross profit margin decreased to 24.0% for the first nine months of 2012 from 25.5% for the first nine months of 2011. Total gross profit for the first nine months of 2012 and 2011 included an asset impairment charge of $8.8 million and $0.4 million, respectively. Excluding the asset impairment charge total gross profit margin decreased by 90 basis points to 24.6% for the first nine months of 2012 from 25.5% in the prior year. The decrease in total gross profit margin, excluding the impairment charge, was primarily due to higher payroll and related expenses as a percent of sales (80 basis points). In addition, product gross margins declined by 20 basis points as the decline in merchandise sales gross margin of 82 basis points was mostly offset by the increase in service revenue product margin primarily due to the shift in sales mix. Merchandise sales product margin declined primarily due to the shift in sales to lower margin tires and oil combined with a decline in tire margins due to cost increases exceeding retail price increases. The new Service & Tire Centers have a higher concentration of their sales in lower margin tires and have higher rent and payroll costs as a percent of total sales. The Service & Tire Centers exclusive of the impairment charge reduced total margins by 168 basis points and 107 basis points in the first nine months of 2012 and 2011, respectively. While the new Service & Tire Centers have had a negative impact on total gross profit margin, these Service & Tire Centers positively contributed to total gross profit in both years.
Gross profit from merchandise sales decreased by $9.7 million, or 2.6%, to $363.3 million for the first nine months of 2012 from $373.0 million in the first nine months of 2011. Gross profit margin from merchandise sales decreased to 29.6% from 30.1% for the prior year period. Gross profit from merchandise sales for the first nine months of 2012 and 2011 included an asset impairment charge of $4.2 million and $0.1 million, respectively. Excluding the asset impairment charge gross profit margin from merchandise sales decreased by 10 basis points to 30.0% for the first nine months of 2012 from 30.1% in the prior year. The decrease in gross profit margin from merchandise sales was due to lower product margins of 82 basis points, as sales mix shifted to lower margin tires and oil, combined with a decline in tire margins due to cost increases exceeding retail price increases and higher warehousing costs (14 basis points) partially offset by lower store occupancy costs such as utilities and depreciation (83 basis points) as a percent of merchandise sales.
Gross profit from service revenue decreased by $13.3 million, or 54.8%, to $11.0 million for the first nine months of 2012 from $24.3 million in the first nine months of 2011. Gross profit margin from service revenue decreased to 3.3% for the first nine months of 2012 from 7.6% in the first nine months of 2011. In accordance with GAAP, service revenue is limited to labor sales (excludes any revenue from installed parts and materials) and costs of service revenues includes the fully loaded service center payroll and related employee benefits and service center occupancy costs. Gross profit from service revenue for the first nine months of 2012 and 2011 included an asset impairment charge of $4.6 million and $0.3 million, respectively. Excluding the asset impairment charge gross profit margin from service revenues decreased by 300 basis points to 4.7% for the first nine months of 2012 from 7.7% in the prior year. The decrease in service revenue gross profit margin was primarily due to the growth of our Service & Tire Centers, which lowered margins by 669 and 499 basis points in the first nine months of 2012 and 2011, respectively. Excluding the impact of Service & Tire Centers, gross profit margin from service revenue decreased to 11.4% for the first nine months of 2012 from 12.7% for the first nine months of 2011. The decrease in gross profit margin, exclusive of Service & Tire Centers, was mostly due to increased payroll and related benefit costs combined with higher store occupancy costs (utilities and depreciation).
Selling, general and administrative expenses, as a percentage of total revenues increased to 22.2% for the first nine months of 2012 as compared to 21.3% the prior year period. Selling, general and administrative expenses increased $14.3 million, or 4.3%, compared to the first nine months of 2011 due to higher media expense of $8.5 million, higher store and store support center payroll and related expense of $6.9 million, severance costs for a reduction in force at our Store Support Center of $0.7 million, higher consulting costs of $1.7 million and higher general liability claims expenses of $0.9 million, partially offset by lower credit card fees of $4.3 million, lower acquisition related costs of $1.0 million and the reversal of compensation expense of $0.9 million related to previously issued performance based stock grants. In addition, during the first nine months of 2011, the Company recorded a reduction to the contingent consideration of $0.7 million related to one of the Companys acquisitions.
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Pep Boys - Manny, Moe & Jack has a market cap of $560.5 million; its shares were traded at around $9.87 with a P/E ratio of 52.9 and P/S ratio of 0.3. Pep Boys - Manny, Moe & Jack had an annual average earning growth of 13.1% over the past 5 years.
Highlight of Business Operations:
Gross profit from service revenue decreased by $5.3 million, or 110.0%, to a loss of $0.5 million in the third quarter of 2012 from $4.8 million in the third quarter of 2011. Gross profit margin from service revenue decreased to (0.4%) for the third quarter of 2012 from 4.5% for the prior year quarter. In accordance with GAAP, service revenue is limited to labor sales (excludes any revenue from installed parts and materials) and costs of service revenues includes the fully loaded service center payroll and related employee benefits and service center occupancy costs. Gross profit from service revenue for the third quarter of 2012 included an asset impairment charge of $4.6 million. Excluding the asset impairment charge gross profit margin from service revenues decreased by 70 basis points to 3.8% for the third quarter of 2012 from 4.5% in the prior year. The decrease in service revenue gross profit margin was due to the growth of our Service & Tire Centers, which lowered margins by 697 and 673 basis points in the third quarter of 2012 and 2011, respectively. Excluding the impact of Service & Tire Centers, gross profit margin from service revenue decreased to 10.8% for the third quarter of 2012 from 11.2% for the third quarter of 2011. The decrease in gross profit margin, exclusive of Service & Tire Centers, was due in part to a deleveraging effect of lower sales volumes on increased store occupancy costs such as utilities and repairs and maintenance.Total gross profit decreased by $23.0 million, or 5.8%, to $374.3 million in the first nine months of 2012 from $397.3 million in the first nine months of 2011. Total gross profit margin decreased to 24.0% for the first nine months of 2012 from 25.5% for the first nine months of 2011. Total gross profit for the first nine months of 2012 and 2011 included an asset impairment charge of $8.8 million and $0.4 million, respectively. Excluding the asset impairment charge total gross profit margin decreased by 90 basis points to 24.6% for the first nine months of 2012 from 25.5% in the prior year. The decrease in total gross profit margin, excluding the impairment charge, was primarily due to higher payroll and related expenses as a percent of sales (80 basis points). In addition, product gross margins declined by 20 basis points as the decline in merchandise sales gross margin of 82 basis points was mostly offset by the increase in service revenue product margin primarily due to the shift in sales mix. Merchandise sales product margin declined primarily due to the shift in sales to lower margin tires and oil combined with a decline in tire margins due to cost increases exceeding retail price increases. The new Service & Tire Centers have a higher concentration of their sales in lower margin tires and have higher rent and payroll costs as a percent of total sales. The Service & Tire Centers exclusive of the impairment charge reduced total margins by 168 basis points and 107 basis points in the first nine months of 2012 and 2011, respectively. While the new Service & Tire Centers have had a negative impact on total gross profit margin, these Service & Tire Centers positively contributed to total gross profit in both years.
Gross profit from merchandise sales decreased by $9.7 million, or 2.6%, to $363.3 million for the first nine months of 2012 from $373.0 million in the first nine months of 2011. Gross profit margin from merchandise sales decreased to 29.6% from 30.1% for the prior year period. Gross profit from merchandise sales for the first nine months of 2012 and 2011 included an asset impairment charge of $4.2 million and $0.1 million, respectively. Excluding the asset impairment charge gross profit margin from merchandise sales decreased by 10 basis points to 30.0% for the first nine months of 2012 from 30.1% in the prior year. The decrease in gross profit margin from merchandise sales was due to lower product margins of 82 basis points, as sales mix shifted to lower margin tires and oil, combined with a decline in tire margins due to cost increases exceeding retail price increases and higher warehousing costs (14 basis points) partially offset by lower store occupancy costs such as utilities and depreciation (83 basis points) as a percent of merchandise sales.
Gross profit from service revenue decreased by $13.3 million, or 54.8%, to $11.0 million for the first nine months of 2012 from $24.3 million in the first nine months of 2011. Gross profit margin from service revenue decreased to 3.3% for the first nine months of 2012 from 7.6% in the first nine months of 2011. In accordance with GAAP, service revenue is limited to labor sales (excludes any revenue from installed parts and materials) and costs of service revenues includes the fully loaded service center payroll and related employee benefits and service center occupancy costs. Gross profit from service revenue for the first nine months of 2012 and 2011 included an asset impairment charge of $4.6 million and $0.3 million, respectively. Excluding the asset impairment charge gross profit margin from service revenues decreased by 300 basis points to 4.7% for the first nine months of 2012 from 7.7% in the prior year. The decrease in service revenue gross profit margin was primarily due to the growth of our Service & Tire Centers, which lowered margins by 669 and 499 basis points in the first nine months of 2012 and 2011, respectively. Excluding the impact of Service & Tire Centers, gross profit margin from service revenue decreased to 11.4% for the first nine months of 2012 from 12.7% for the first nine months of 2011. The decrease in gross profit margin, exclusive of Service & Tire Centers, was mostly due to increased payroll and related benefit costs combined with higher store occupancy costs (utilities and depreciation).
Selling, general and administrative expenses, as a percentage of total revenues increased to 22.2% for the first nine months of 2012 as compared to 21.3% the prior year period. Selling, general and administrative expenses increased $14.3 million, or 4.3%, compared to the first nine months of 2011 due to higher media expense of $8.5 million, higher store and store support center payroll and related expense of $6.9 million, severance costs for a reduction in force at our Store Support Center of $0.7 million, higher consulting costs of $1.7 million and higher general liability claims expenses of $0.9 million, partially offset by lower credit card fees of $4.3 million, lower acquisition related costs of $1.0 million and the reversal of compensation expense of $0.9 million related to previously issued performance based stock grants. In addition, during the first nine months of 2011, the Company recorded a reduction to the contingent consideration of $0.7 million related to one of the Companys acquisitions.
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