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Pep Boys loss widens in Q4


New York -- Lower gas prices and an increase in the average age of U.S. cars on the road didn’t help Pep Boys’ performance in the fourth quarter, posted a wider loss in the fourth quarter. The auto parts chain had a loss of $26.7 million, compared to a loss of $3.33 million a year earlier. The latest results included a net charge of $12.4 million for write-downs and severance expenses.

“The fourth quarter was a time of transition for the company,” said interim CEO John Sweetwood. “We continued to increase our sales in the growing service segment. Our investments in the high-growth areas of our business – commercial, tires, fleet and digital – increased revenue, but temporarily depressed margins.”

Revenue at Pep Boys rose 1.3% to $502.4 million. Same-store sales rose 1.3%.

The company did say, however, that its improved business model has led to increased sales in the current quarter.

“With only three weeks to go in the first quarter of 2015, we are seeing a turn around in the business. At this point comparable store sales are up with double-digit growth in commercial, fleet and digital. With margins recovering, combined with improved expense and inventory management, to date we are seeing an improvement in operating profit and cash flow.”

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