Pep Boys Q1 Profit Down - Update

(RTTNews) - Auto parts retailer Pep Boys - Manny, Moe & Jack (PBY), Monday reported a drop in profit for the first quarter, hurt by impairment charges and litigation accruals that offset higher revenues and margins, with both earnings and revenues falling short of Wall Street estimates.

Philadelphia, Pennsylvania-based Pep Boys first-quarter profit dropped to $1.6 million or $0.03 per share from $3.9 million or $0.07 per share last year. On average, four analysts polled by Thomson Reuters expected earnings of $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Results for the quarter include an asset impairment charge of $1.2 million and litigation accruals of $4.0 million, while last year's results included asset impairment charge of $1.2 million and tax benefit of $3.8 million.

Total revenue for the first quarter inched up 0.5 percent to $538.82 million from $536.17 million a year ago. Analysts estimated revenues of $542.14 million for the quarter.

Comparable sales decreased 1.4 percent, consisting of an increase of 3.2 percent in comparable service revenue and a decrease of 2.8 percent in comparable merchandise sales.

"Our first quarter operating profit improved significantly over the prior year driven primarily by higher gross margin," said President and CEO Mike Odell. "Our core service business remains solid and we expect tire sales trends to improve in the back half of the year."

PBY closed Monday's trading at $10.52, down $0.11 or 1.03%, on the NYSE. The stock further dropped to $0.02 or 0.19% in after-hours trade.