Are AutoZone and Pep Boys running out of gas?

AutoZone (AZO), the largest auto parts retailer, has been crushing rival The Pep Boys -- Manny, Moe and Jack (PBY) for years. The company still is the market leader, but these days, both outfits face challenges as consumers increasingly choose new vehicles instead of fixing their old junkers.

AutoZone reported Tuesday that profit in its last quarter rose 6.4% to $203.5 million, or $5.41 a share. Sales rose 2% to $1.99 billion. Wall Street analysts expected $5.39 a share in profit on sales of $2.02 billion. Same-store sales, a key retail metric that measures revenue growth at locations open at least a year, gained 0.2% in the quarter. MarketWatch notes that figure was the slowest growth rate in years.  

Pep Boys, though, fared much worse. The Philadelphia chain reported a 2.7% decline in same-store sales in its quarterly results Monday. Overall, Pep Boys lost $6.8 million, or 13 cents a share. Revenue fell 2.4% to $509.6 million as costs rose. A gain in service revenue wasn't enough to offset a decline in merchandise sales.

Earlier this year, Gores Group pulled the plug on a $1 billion deal to buy Pep Boys after the chain's financial performance proved much weaker than the private equity firm had expected.  Pep Boys has 740 locations in 35 states and Puerto Rico, far smaller than AutoZone, which owns 4,703 stores in 49 states, the District of Columbia and Puerto Rico. The outlook for Pep Boys seems dim.

Investors have speculated for years that either AutoZone or No. 2 player Advanced Auto Parts (AAP), which also is struggling, will pick up Pep Boys. Such a deal hasn't happened yet and may not ever occur because there doesn't seem to be any sense of urgency for it to happen.

 For one thing, cars are built much better than they were years ago. The average vehicle on the road is nearly 11 years old -- a record, according to Autoblog. Auto sales surged 11.9% in November, fueled by rising demand spurred by Hurricane Sandy. New car sales should do well in 2013 as well, provided that the economy doesn't dive off the fiscal cliff. In theory, these cars should need little in terms of maintenance and what work needs to be done will probably be covered by warranties.

--Jonathan Berr does not own shares of the listed stocks.  Follow him on Twitter @jdberr.

More from Money Now

• Is homework unfair to low-income children?
  

• A big November for automakers
  

• Housing is the economy's bright spot