Pep Boy’s advances as CEO search continues

As gas prices decline and American’s drive more, Pep Boy should be in a position to benefit from a resulting demand for automotive maintenance with its unique parts and service model.



The company saw early signs of increased demand during its third quarter ended Nov. 1 when sales increased 2.1 percent to $517.6 million. Same store sales increased 1.2 percent and consisted of a 6.1 percent increase in service revenue and 0.2 percent decline in merchandise sales. Despite the modest top line growth, the operator of 800 stores with 7,500 service bays, said it lost $2 million, or three cents a share in the third quarter compared to a profit of $1 million or two cents a share the prior year.



“Our recent top-line growth has continued into the fourth quarter,” said interim CEO John Sweetwood. “Particular highlights are tires, commercial and e-commerce sales. However, this balance of business shift has continued to pressure gross margin rate.”



Meanwhile, the company said it has retained the executive search firm Spencer Stuart to conduct a search for a CEO following the resignation of former CEO Mike Odell in late September.