Pep Boys gets run over by low tire prices

The auto-parts retailer sees shares plunge 15% after reporting a bleak quarter.

By InvestorPlace Apr 15, 2014 1:09PM

Credit: © Paul Sakuma/AP
Caption: File photo of a customer leaving a Pep Boys - Manny, Moe & Jack auto parts store in Hayward, Calif.By Christopher Freeburn

Investors hammered Pep Boys (PBY) stock on Tuesday after the auto-parts retailer reported disappointing fiscal fourth-quarter results.

Shares sank after the retailer announced it suffered a loss of 6 cents per share, which was worse than the 5-cent loss analysts expected. Revenue also was down, off 6.6 percent from a year earlier at $495.7 million, which was well below Street expectations of $535 million.

CEO Mike Odell said in a statement that while pricing for tires has stabilized, they're "still below last year's level, which has and is expected to continue to negatively impact top line sales results through the second quarter of 2014."

However, Odell touted growth in customer count, maintenance and repair sales, and tire units, noting the company's "Road Ahead" strategy of sales driving service.

"Overall, sales from service appointments made online, tires purchased online and installed in our service bays, and products purchased online for store pick up or home delivery grew 152 percent in the fourth quarter."

Pep Boys operates about 800 locations across 35 U.S. states and Puerto Rico.

PBY was down roughly 15 percent in midday trading Tuesday, and shares were off roughly the same amount for the year.

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Tags: PBY
Apr 15, 2014 1:58PM
Pep Boys tends to provide a kind of expensive service, I do not think they are doing their best in giving costumers the best prices to keep clientele and to attract new ones. But I guess they already know this.
Apr 15, 2014 2:51PM
What comes first food or tires. ?  Economy is getting better. Yeah right
Apr 15, 2014 2:31PM

last time I went to Pep Boys the place was overrun with mexicans. It made me want to call ICE


 ...although I knew what good that would do



Apr 15, 2014 2:37PM
Wow, tire prices sure seem high to me, so that statement is surprising; but where I live, the local Pep boys is being run over by a nearby Tire Kingdom store that is always packed.  But they are starting to be stupid by running the front office by a skeleton crew.  Will these companies never learn?  
Apr 15, 2014 2:10PM
I have stumbled across their stores here in a few places, but their stores always seem to be in kinda the lower less desireable areas of town, just always borderline.  I never really see any adds or flyers about them.  it's like they just gave up. no new retail stores that i know of, not really growing and just appear to be hanging on tightly to what they have.  They need to be more proactive and find better locations for their stores.  They have a fairly decent reputation adn certainly a history behind them, they need to take advantage.
Apr 15, 2014 2:40PM
The Pep Boys places in our area have a bad reputation for trying hard to upsell unnecessary repairs.   However, they are one of the few places open on Sunday.
Apr 15, 2014 3:46PM
After my last tire experience with Pep Boys, I will never go back.
Apr 15, 2014 4:01PM
Pep Boys Suck ! There prices are way too high and there service is below par !
Apr 15, 2014 3:04PM
How about that midday stock price drop, eh ??
Apr 15, 2014 2:32PM

Typically, I hit Autozone first, then O'reilly, Advance, Pepboys, Advanced, then Napa in that order. Advanced used to be higher on my list until I replaced a power steering pump the went out in 3 months. Found out it only had a 3 month warranty and it cost $300 to put it on. So now I have to buy a new pump and either pay another $300 to put it on or do it myself. I usually do 99% of vehicle maintenance myself but this pump just happens to be the biggest PITA to get to and have to disassemble half the car to get to it. Until I can devote a weekend to it I've been driving around without PS or AC (same belt driven). My rant is more about Advanced warranties over the stores themselves.


Pepboys would be higher on my list but all the others are grouped together on my way home from work so they are easier to stop in. I have to go out of my way to go to pepboys. I'll only go there if they are the only ones with a part in stock.

Apr 15, 2014 3:02PM

Anyone know how much their Revenue was down YOY quarter or 4th. Quarter reporting..?

Percentage or $ dollar amounts from expectations..?

Apr 15, 2014 8:21PM
I dunno, I think Curly, Moe and Larry's place is just fine.....Like their coffee.
Apr 15, 2014 4:48PM
my family owned 3 exxon service stations in the 60s,70s and 80s.service and workmanship has really went down since !
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