Pep Boys -- Manny, Moe & Jack Earnings Preview

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Pep Boys -- Manny, Moe & Jack (NYS: PBY) came in under analysts' estimates last quarter, but now have a chance to fix things this quarter. The company will unveil its latest earnings on Tuesday. Pep Boys is engaged mainly in automotive repair and maintenance and in the sale of automotive tires, parts, and accessories through a chain of stores.

What analysts say:
 

  • Buy, sell, or hold?: Analysts are bullish on this stock with four analysts rating it as a buy and only one rating it as a sell. Analysts don't like Pep Boys as much as competitor U.S. Auto Parts Network overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $528.4 million in revenue this quarter. That would represent a rise of 4.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.19 per share. Estimates range from $0.18 to $0.20.

What our community says:
CAPS All-Stars are solidly behind the stock with 81.8% giving it an outperform rating. The community at large agrees with the All-Stars with 79.6% granting it a rating of outperform. Fools are gung-ho about Pep Boys, though the message boards have been quiet lately with only 87 posts in the past 30 days. Despite the majority sentiment in favor of Pep Boys, the stock has a middling CAPS rating of three out of five stars.

Management:
Pep Boys' profit has risen year over year by an average of more than twofold over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

26.3%

26.1%

25.4%

26.6%

Operating Margin

5.1%

3.7%

3.0%

4.7%

Net Margin

2.4%

1.8%

1.2%

2.1%

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At the time this article was published

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