SUNNY ISLES BEACH, Fla. — Icahn Automotive Group L.L.C. reported a slight improvement in its adjusted pre-tax earnings for the quarter ended March 31 despite a 16% drop in sales revenue.
Icahn Automotive — an operating unit of Icahn Enterprises L.P. (IEP) — generated $23 million in adjusted EBITDA for the quarter, up 9.5%, on sales of $384 million, yielding an operating ratio of 6%. The business cut the net loss to $9 million from $13 million.
Icahn attributed the earnings gain to the deconsolidation of Auto Plus — the former auto parts distribution chain that was $1 million in the red in the prior year quarter — as well as "margin initiatives" that offset reduced car counts.
Icahn also pointed to the Auto Plus deconsolidation — via a Chapter 11 bankruptcy filing in February 2023 — of $53 million and reduced car count for the Pep Boys automotive services business or its sales decline.
Icahn Automotive's revenue also includes royalty payments from the AAMCO Total Car Care and Precision Tune Auto Care franchise programs it controls.
The first-quarter earnings report is the first since Icahn Enterprises appointed David Willetts — the IEP CEO since 2021 — CEO of its Pep Boys business as part of strategy to drive the "significant value creation potential" of the auto repair and maintenance subsidiary.
Willetts is the third CEO of Pep Boys in the past 18 months, replacing Scott Collette a year after the former Menards Inc. executive was hired to fill that position. Icahn instead transitioned Collette to the role of chief operating officer, tasked with driving Pep Boys' greenfield initiatives, acquisitions and evaluation of new service offerings.
Icahn also recently strengthened its Pep Boys management team with three hires:
- Tim Sheehan as chief information security officer; Sheehan brings more than two decades of information-security experience to his role at Pep Boys,
- Heather Waring as vice president of treasury, where she will be tasked with spearheading efforts to streamline operations, implement strategic initiatives to reach company goals and foster strong relationships with financial institutions and vendors. She brings 15-plus years of experience to the job.
- Sam Hanson as associate vice president of construction, tasked with modernizing the customer experience in the Pep Boys service centers and improving the efficiency and effectiveness of our construction team.
At 875 stores nationwide (including Puerto Rico), Pep Boys is considered the fourth largest independent tire retailer/auto repair chain in the U.S, according to Tire Business research.