NEW YORK — Icahn Automotive Group L.L.C. — the Icahn Enterprises business unit that includes the Pep Boys, Auto Plus, AAMCO and Precision Tune businesses — reported an operating loss of $38 million in the quarter ended June 30 on 0.9% higher sales of $744 million. The loss was more than double that reported in 2018.
The results were reported in Icahn Enterprises L.P.'s second-quarter 10-Q filing with the Securities and Exchange Commission, which revealed that the holding company for Icahn's automotive aftermarket, energy, investment, food packaging, metals and real-estate businesses, reported a $573 million net loss for the quarter on 35.8% lower sales revenue.
The Automotive Group's revenue gain reflected 3.3% higher sales of automotive services and 1% lower parts sales, according to the firm's second-quarter 10-Q filing with the Securities and Exchange Commission.
For the half-year, Icahn Enterprises reported a loss of $1.24 million on 36.8% lower sales of $4.05 billion. The automotive segment was $80 million in the red on 1.3% higher sales of $1.44 billion.
Icahn attributed some of the earnings malaise on some margin-rate contraction for its services and parts businesses due to reduced vendor support funds and other "unfavorable" margin adjustments, including from a shift in aftermarket parts sales to commercial from retail.
Icahn reiterated in the second-quarter earnings report that it was in the process of implementing a "multi-year transformation plan" for the automotive segment, which includes streamlining the unit's corporate and field support teams; facility closures, consolidations and conversions; inventory optimization actions; and a re-focusing of the auto parts business on certain core markets.
Priorities for the segment include:
• Positioning the service business to take advantage of opportunities in the do-it-for-me market and vehicle fleets;
• Optimizing the value of the commercial parts distribution business in certain high-volume core markets;
• Exiting the automotive parts distribution business in certain low volume, non-core markets;
• Improving inventory management across the parts and tire distribution network;
• Selecting digital initiatives that support revenue growth;
• Investing in customer-experience initiatives such as enhanced customer loyalty programs and selective upgrades in facilities;
• Investing in employees with focus on training and career development investments; and
• Making business process improvements, including investments in our supply chain and information technology capabilities.