NEW YORK — Icahn Enterprises L.P.'s automotive sector — comprising Pep Boys and Auto Plus — fell deeper into the red on an operating and net basis for the three- and nine-month periods ended Sept. 30, compared with the 2018 performance.
Icahn Enterprises' auto sector reported third quarter pre-tax operating and net losses of $62 million and $48 million, respectively, on 2.2% greater sales of $749 million. The operating and net losses were 158.3% and 269.2% deeper than in 2018.
For the nine-month period, the pre-tax operating loss increased 59.2% to $164 million while the net loss nearly doubled to $128 million. Revenue increased 1.6% to $2.19 billion.
Icahn did not elaborate on reasons for the deepening losses, saying only the segment has experienced some "margin rate contraction" for its services and parts businesses due to the reduction in vendor support funds and other "unfavorable margin adjustments," including from a shift in aftermarket parts sales to commercial from retail.
Icahn Enterprises disclosed plans this past summer to split its automotive business into independent aftermarket "Parts" and "Service" companies in a bid to focus better on unique strategies, customers and business opportunities better.
The Service company will include the automotive repair and maintenance businesses of Icahn's captive Pep Boys chain and its AAMCO and Precision Tune Auto Care franchise businesses, as well as several regional service centers the company has acquired.
Pep Boys recently opened locations in Astoria, N.Y.; LaGrange, Ga; and Rocklin and Lawndale, Calif., and relocated a center in Lodi, N.J., to a larger location, moves that bring the number of Pep Boys service centers to nearly 1,000 in 35 states and Puerto Rico.