Boston, MA 09/10/2014 (wallstreetpr) – Pep Boys – Manny, Moe & Jack (NYSE:PBY) reported the sales of $525.8 million in the second quarter, down 0.4% as compared to 2Q2013. A decline of 1.8% in comparable store sales resulted in a decline in sales. However, the sales of $7.5 million from non-comparable stores supported the overall sales. The gross profit came at $124.3 million, down 10.4% as compared to 2Q2013.
The details
Mike Odell, President and the CEO of Pep Boys – Manny, Moe & Jack (NYSE:PBY), said that the decline of 1.8% in comp store sales came at a time when Pep Boys has been investing more for growth of business. The service revenue as a whole grew by 2.6%. Only in terms of comparable store basis, it reflected a drop of 0.2%. On the same platform, the average ticket rose 2.8% whereas customer count declined 3%.
Going ahead on the basis of comparable store, the core repair and maintenance services rose 1.3% due to a steady growth of 8.4% in the brake business. It was supported by 4% growth in oil change business. The two sectors were able to offset the decline of 2.7% and 3.2% in batteries and air conditioning categories respectively. The overall performance slumped due to slower retail sales and the extra expenses made in the promotional efforts to lift the sales.
The investment
Pep Boys – Manny, Moe & Jack (NYSE:PBY) has invested in the business to enhance the top line sales. The investments done were in the form of marketing promotions, investment in super hub speed shop, digital operations, service & tire centers and many others. Compared with the costs, the results were not up to the mark. It resulted in increased expenses and lower profit margins and further hampered the performance of Pep Boys – Manny, Moe & Jack (NYSE:PBY). Therefore, the focus in coming quarters will remain on cost cutting measures. The target is to save as much $25 million in the form of cost cuts on a full year basis.
