PHILADELPHIA (Aug. 14, 2003)—High restructuring costs pushed Pep Boys—Manny, Moe & Jack to a second quarter loss of $36.4 million.
Excluding $53.2 million in restructuring and other charges, the automotive and service chain's earnings were essentially flat from last year's second quarter. Philadelphia-based Pep Boys reported comparable earnings, excluding the after-tax charges, of $16.9 million, compared with last year's $16.9 million.
Sales for the quarter, excluding 33 stores since closed, fell 1.7 percent to $556 million from $565.6 million last year. Also excluding the 33 stores, Pep Boys' comparable store sales were down 1.6 percent, including a fall of 1 percent in service revenue and a drop of 2 percent in retail merchandise sales.
As part of its overall restructuring plan begun in 2000, Pep Boys on July 31 announced other moves, including closing 33 underperforming stores in 13 states, discontinuing some merchandise offerings, closing two small warehouses by Oct. 1 and eliminating 160 store support center and field managers. About 700 employees in the 33 stores were cut.
Pep Boys had said it expects to save about $11 million from the store closings.
For the first six months of the year, Pep Boys reported a loss of $45.6 million, compared with a gain of $30.1 million last year. Sales for the half were down 3.5 percent to $1.07 billion from $1.11 billion last year. Comparable store sales also fell 3.5 percent, including a 3.1-percent decline in service revenue and a 3.8-percent drop in retail merchandise sales.
“I am pleased that our comparable store sales performance has improved versus the first quarter, but we still have a long way to go,” said Larry Stevens, CEO of Pep Boys.
Pep Boys operates 596 stores in 36 states and Puerto Rico.