Pep Boys posts 10.4% 3Q comps drop

PHILADELPHIA Pep Boys posted third-quarter net sales of $464.2 million, as compared to $528.8 million in 2007, for the quarter ended Nov. 1. Comparable sales decreased 10.4%, including a 10.3% comparable-merchandise sales decrease and an 11% comparable-service revenue decrease.

Third-quarter net loss was $7.3 million, or 14 cents per share, as compared to a loss of $28 million, or 54 cents per share, in 2007. Net Loss for the third quarter of 2007 included $50.0 million in pre-tax costs for an inventory write down, asset impairment and increased legal reserves.

"Our sales and operating results have been impacted by the decrease in miles driven and the general reduction in consumer spending. To offset these trends, we continue to focus on implementing our strategic plan, serving our customers well, tightly controlling spending and promoting the fact that 'Pep Boys Does Everything. For Less,' said ceo Mike Odell.

"Our liquidity position remains strong," stated cfo Ray Arthur. “As of the end of Q3, we had $38.4 million cash on hand, an undrawn revolving credit facility and no significant debt maturities due until 2013. A year in advance of the Dec. 9, 2009, maturity of our current revolving credit facility, we have secured commitments from a syndicate led by Bank of America for a $300 million replacement facility. This facility is expected to close, subject to the satisfaction of customary closing conditions, before our fiscal year ends on Jan. 31, 2009."