Pep Boys Reports Wider-Than-Expected Loss
April 14, 2014—Pep Boys said Monday that its loss widened significantly in its latest quarter as one-time charges and write-downs offset modest sales growth.
"The fourth quarter was a time of transition for the company," said interim Chief Executive John Sweetwood. "Our investments in the high-growth areas of our business—commercial, tires, fleet and digital—increased revenue, but temporarily depressed margins."
Sweetwood, who said the company is seeing a turnaround in the business this quarter, was named interim CEO last year after Mike Odell, CEO since 2008, resigned. The company said in December that it had hired an executive recruiting firm to help find a new permanent chief executive, but it didn't offer an update in its release Monday.
For the three months ended Jan. 31, Pep Boys booked a loss of $26.7 million, or 50 cents a share, versus a loss of $3.33 million, or six cents a share, a year earlier. The latest results included a net charge of $12.4 million for write-downs and severance expenses, among other things.
Revenue rose 1.3 percent to $502.4 million. Comparable-store sales rose 1.3 percent, driven by a 5.1-percent increase in service revenue.
Analysts polled by Thomson Reuters expected the company to break even on a per-share basis on $517.6 million in revenue.
Shares rose 1 percent to $9.70 in after-hours trading and were down 20 percent over the past 12 months through Monday's close.