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PBY ,,, Pep Boys Falls to First-Quarter Loss
Thursday May 12, 6:57 pm ET
Pep Boys Falls to First-Quarter Loss on Lower Service Revenue, Sees Better Second Half


PHILADELPHIA (AP) -- Pep Boys - Manny, Moe & Jack, an automotive retail and service chain, said Thursday it posted a first-quarter loss, reversing a year-ago profit, hurt by lower service revenue at location open at least one year.
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The company fell to a loss of $2.4 million, or 4 cents per share, from a prior-year profit of $15.1 million, or 25 cents per share.

Sales declined slightly to $564.2 million from $566.1 million in 2004.

Analysts surveyed by Thomson Financial expected the company to earn 21 cents per share on sales of $577 million.

Pep Boys said sales at locations open at least one year, or same-store sales, edged down 0.3 percent during the quarter. Merchandise sales at those stores increased 0.7 percent, while service revenue decreased 4.6 percent.

Chairman and CEO Larry Stevenson said, "As I have repeatedly cautioned investors, the near-term results of our turnaround will continue to be uneven. While Pep Boys has a very exciting future ahead, achieving fundamental and sustainable performance improvements will take time. As we continue to work against our Service Center improvement initiatives, we expect our financial results to begin to reflect the benefits of these initiatives during the second half of the year."

Looking ahead, Pep Boys said business conditions remain difficult and retail comparisons will continue to be a challenge in the second quarter. However, the company expects service comparisons to ease slightly.

"While we remain concerned about gas prices and product cost increases, particularly with their effect on our lower-income customer base, the Pep Boys team is focused on delivering long-term operating improvement," said CFO Harry Yanowitz.

Pep Boys shares rose 7 cents to close at $15.01 on the New York Stock Exchange, then slid 71 cents, or 4.7 percent, to $14.30 in after-market trading.





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