Pep Boys Earnings Preview

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Investors braced for a bumpy ride ahead of Pep Boys -- Manny, Moe & Jack's (NYS: PBY) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Monday, April 2. Pep Boys Manny Moe & Jack 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 think investors should stand pat on Pep Boys, with three out of five analysts rating it a hold. Analysts don't like Pep Boys as much as competitor U.S. Auto Parts Network overall. Three out of seven analysts rate U.S. Auto Parts Network a buy compared to one out of five for Pep Boys.
  • Revenue Forecasts: On average, analysts predict $502.5 million in revenue this quarter. That would represent a rise of 5.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.11 per share. Estimates range from $0.10 to $0.12.

What our community says:
CAPS All-Stars are solidly behind the stock, with 82% awarding it an outperform rating. The greater community agrees with the All-Stars, as 79% give it a rating of outperform. Pep Boys' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.


Management:
Pep Boys' profit has risen year over year by an average of 81.6% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's get some insight into how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. For four quarters in a row, the company has seen increases in net margins year over year. Net margins reflect what percentage of revenue becomes profit. See how Pep Boys has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

24.3%

25.9%

26.3%

26.1%

Operating Margin

3.3%

4.2%

5.1%

3.7%

Net Margin

1.3%

2.7%

2.4%

1.8%

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Earnings estimates provided by Zacks.

At the time this article was published

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