Pep Boys has now converted 97 stores to the Road Ahead format. Conversions are complete in the Tampa, San Francisco, Boston and Charlotte, N.C., markets, according to David Stern, executive vice president and CFO. Conversions will roll out to the public in Denver in April and Cincinnati in May.
Stores in the Baltimore area are being converted according to the firm's “reduced capital” schedule, Mr. Stern added, and further conversions are scheduled throughout 2015 in as-yet undisclosed markets.
Interim CEO John Sweetwood called the fourth quarter — net loss of $26.7 million on 1.3-percent higher sales — “a time of transition” for the tire and auto service company.
“We continued to increase our sales in the growing service segment,” he said. “Our investments in the high-growth areas of our business — commercial, tires, fleet and digital — increased revenue, but temporarily depressed margins.”
To date in the first quarter, he said Pep Boys has generated higher sales and experienced recovering margins.
“At this point [in the quarter], comparable store sales are up with double-digit growth in commercial, fleet and digital,” he said. “With margins recovering, combined with improved expense and inventory management, to date we are seeing an improvement in operating profit and cash flow.”