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Pep Boys falls into red in 4th quarter

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PHILADELPHIA—Pep Boys - Manny, Moe & Jack suffered a $14.5 million net loss in the fourth quarter ended Feb. 2, which pulled down fiscal 2012 net earnings nearly 56 percent to $12.8 million, while sales rose 5.3 percent in the quarter but only 1.3 percent for the year.

Philadelphia-based Pep Boys chalked up the fourth quarter loss to a one-time $18 million net charge related mostly to settlement of a pension issue.

Sales for the quarter rose to $530.8 million, although the company noted the 2012 quarter was 14 weeks vs. 13 in fiscal 2011. Excluding the 14th week, comparable sales fell 2.6 percent, Pep Boys said, with service revenue up 3.2 percent but merchandise sales down 4.1 percent.

That dichotomy prompted Pep Boys President and CEO Mike Odell to comment that the firm's “strategically important service maintenance and repair categories remain a bright spot in what was a disappointing year from a sales and profit perspective.”

Mr. Odell went on to say the comparable store sales trends have improved through the first few weeks of fiscal 2013.

For the full year, Pep Boys' sales were up to $2.09 billion, although excluding the extra week would have left sales 2 percent below those in 2011.

Pep Boys ended the year with more than 750 locations in 35 states in Puerto Rico, including 175 stores classified as the firm's Service & Tire Centers format locations.
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