Pep Boys shares rise on 2Q results
NEW YORK (AP) — Shares of The Pep Boys — Manny, Moe & Jack rose Wednesday after the auto-parts retailer posted second-quarter results and named a new chief financial officer.
THE SPARK: Pep Boys said late Tuesday its second-quarter net income more than doubled to $33 million, or 61 cents per share, up from $13.9 million, or 26 cents per share, for the same quarter last year.
The recent quarter's results included a pre-tax gain of $43 million stemming from a failed bid to acquire the company, which was partially offset by $700,000 charge related to severance costs.
Revenue for the quarter ended July 28 edged up less than a percent to $525.7 million.
Analysts polled by FactSet expected a profit adjusted for one-time items of 16 cents per share on $528.3 million in revenue. Pep Boys did not provide a comparable figure for its adjusted net income per share.
THE BIG PICTURE: The Philadelphia-based company said its revenue at stores open at least a year was flat and included a 3.1 percent increase in comparable service revenue that was offset by a 0.9 percent decrease in comparable merchandise sales.
The metric is a key measure of a retailer's health, because it excludes revenue at stores that recently opened or closed.
Also on Tuesday, the company named David Stern as its chief financial officer and announced the departure of William Shull III, its executive vice president for stores. Stern replaces Ray Arthur, who resigned in June to pursue another business opportunity.
Stern, who is expected to start on Monday, most recently served as the executive vice president, chief administrative officer and chief financial officer for A.C. Moore Arts and Crafts.
THE ANALYSIS: Stifel Nicholaus analyst David Schick maintained a "Hold" rating for Pep Boys' shares. He noted that, excluding the one-time items, the company posted an adjusted profit of 12 cents per share, which actually fell short of average Wall Street predictions.
THE SHARES: Up 71 cents, or 8 percent, to $9.69 in heavy afternoon trading, after peaking at $9.63 earlier in the day. The shares are up about 7 percent in the past year.