Pep Boys Slips To Q2 Loss On Higher Charges

(RTTNews) - Auto parts retailer Pep Boys - Manny, Moe & Jack (PBY) reported Monday a small loss for the second quarter compared to a profit last year, hurt by higher charges and lower sales. The results missed analysts' expectations.

"Our service maintenance and repair business, as well as our digital and commercial operations, continue to be bright spots. However, these gains were outpaced in the second quarter by declines in DIY and tires. During the first five weeks of the third quarter, our performance has improved to a small overall comp sales increase," President and CEO Mike Odell said in a statement.

The Philadelphia, Pennsylvania-based nation's leading automotive aftermarket service and retail chain reported a net loss of $0.27 million or breakeven per share for the second quarter, compared to net earnings of $5.37 million or $0.10 per share in the prior-year quarter.

The results for the latest quarter include, on a pre-tax basis, a $2.7 million asset impairment charge, a $0.8 million severance charge and a $0.9 million tax charge related to state valuation allowances.

Meanwhile, the year-ago results included a $1.7 million asset impairment charge, a $0.7 million severance charge and a $2.5 million income tax burden due to state tax law changes.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Total sales for the quarter edged down 0.3 percent to $525.77 million from $527.62 million in the same quarter last year, and missed four Wall Street analysts' consensus estimate of $534.56 million.

Comparable sales for the quarter decreased 1.8 percent, consisting of an increase of 5.4 percent in comparable service revenue and a decrease of 3.8 percent in comparable merchandise sales.

"In an effort to grow our top line, we have been investing in our business. Our investments in the Road Ahead, Digital Operations and Service & Tire Centers continue to produce positive results," Odell added.

PBY closed Monday's regular trading session at $11.41, up $0.22 or 1.97% on a volume of 0.37 million shares. However, the stock plunged $0.95 or 8.33% in after-hours trading.