NEW YORK — Icahn Enterprises L.P.'s automotive segment — comprising Pep Boys, IEH Auto Parts Holding and franchise businesses — trimmed its operating loss in the quarter ended Sept. 30 on slightly higher sales.
The Icahn automotive business cut its loss for the quarter by 18.8 percent to $13 million on 4.7-percent higher sales of $733 million, according to the company's third quarter 10-Q filing with the Securities and Exchange Commission.
Icahn also noted that the automotive sector's gross margin for the quarter increased 21.3 percent to $239 million, reflecting higher margin percentages from franchisor operations as well as higher margins in automotive services due to cost improvements and selective price increases.
Icahn cited higher commercial sales ($18 million) and service sales ($8 million) for the revenue growth while noting retail sales fell $8 million. Icahn attributed growing demand from the do-it-for-me and fleet business sectors for the service sales increase.
For the nine months ended Sept. 30, the Icahn automotive sector's loss was nearly 81 percent greater than for the same period in 2017 at $65 million. Sales were up 5.9 percent to $2.16 billion.
The business unit's gross margin was up 18.4 percent for the nine months to $687 million, or 31.8 percent of sales, an improvement Icahn attributed to higher margin percentages from franchisor operations and higher margins in automotive services due to cost improvements and selective price increases.
Icahn noted the automotive segment is in the process of implementing a multi-year transformation plan, which includes the integration and restructuring of the operations of Pep Boys – Manny, Moe & Jack, IEH Auto Parts Holding L.L.C. and the franchise businesses of Precision Tune Auto Care and American Driveline Systems (AAMCO).
Icahn disclosed recently that its Pep Boys retail network will expand its ship-to-store tire installation relationship with Amazon.com Inc. nationally to its nearly 1,000 locations after running a test in the Tampa, Fla., market earlier in the year.