The Pep Boys (PBY) provides shop and care for car. The Company's stores are organized in a hub and spoke network consisting of Supercenters and Service & Tire Centers. It also provides non-automotive merchandise such as generators, power tools and personal transportation products.
Since 1921, Pep Boys has been the nation’s leading automotive aftermarket chain. With over 7,500 service bays in over 800 locations in 35 states and Puerto Rico, Pep Boys offers name-brand tires; automotive maintenance and repair; parts and expert advice for the Do-It-Yourselfer; commercial auto parts delivery; and fleet maintenance and repair.
The net income increased by 77.1% when compared to the same quarter one year prior, rising from -$14.54 million to -$3.33 million. Net operating cash flow has significantly increased by 87.56% to -$3.45 million when compared to the same quarter last year. The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels.
Pep Boys had cash and cash equivalents of $37.8 million as of May 3, 2014, compared with $56.1 million as of May 4, 2013. Capital expenditure increased to $14.6 million from $12.8 million in the first quarter of fiscal 2013. Sales for the thirteen weeks ended May 3, 2014 increased by $2.6 million, or 0.5%, to $538.8 million from $536.2 million for the thirteen weeks ended May 4, 2013.
Net earnings for the first quarter of fiscal 2014 were $1.6 million ($0.03 per share) as compared to net earnings of $3.9 million ($0.07 per share) recorded in the first quarter of fiscal 2013. Operating profit for the first quarter of fiscal 2014 increased to $6.0 million from $3.5 million recorded in the first quarter of fiscal 2013.
As many as 20 of the 30 new stores would be opened in the targeted markets during the first half of fiscal 2014, with the others to be opened in three more markets in late 2014/early 2015, according to Mike Odell, president and CEO.
Pep Boys now operates 228 Service & Tire Centers among its 800 locations in 35 states and Puerto Rico, including 19 featuring the Road Ahead format. Pep Boys invested $64.7 million in 2013 for new centers, conversions and acquisitions including the purchase of 18 former Discount Tire Center -locations in Southern California along with upgrades to the firm’s information technology infrastructure.
Pep Boys is budgeting about $80 million this year to cover openings of its Service & Tire Centers locations, relocating two Supercenters, opening one new Supercenter, adding 25 Speed Shops within existing Supercenters and converting 42 stores to the company’s Road Ahead format.
In the past Pep Boys has estimated it costs about $525,000 and three to four months to transform a Supercenter store into its Road Ahead design, which includes modern wood and stone exteriors. Inside there are streamlined shopping zones and a large customer lounge with leather chairs, TV, WiFi and coffee bar.
Pep Boys supplies tires, batteries, new and remanufactured parts for vehicles, chemicals and maintenance items, fashion, electronic, and performance accessories and is based in Philadelphia. Parallel to the Road Ahead expansion, Pep Boys is moving ahead with adding performance-oriented Speed Shops at existing store locations. The company has 106 Speed Shops in operation, Mr. Odell said, and plans to open 56 more this fiscal year, including 31 in conjunction with Road Ahead conversions.
Pep Boys is fighting back with a "holistic" rebranding, changing not only its marketing and advertising strategy, but revamping store interiors and exteriors, implementing new customer-service training programs and recalibrating its internal culture. Even its signature Manny, Moe and Jack caricature logo has been redesigned.