In a bid to enhance shareholders' value,
Pep Boys -- Manny, Moe & Jack
) recently announced a share repurchase program worth $50
Pep Boys plans to fund the program with its available cash in
hand and future cash flows. It had cash and cash equivalents of
$78.7 million as of October 27, 2012, up from $58.2 million as of
January 28, 2012. During the first nine months of fiscal year
2012, the company generated cash flow of $116.2 million compared
with $85.1 million in the first nine months of fiscal 2011. Given
its strong balance sheet, we believe that Pep Boys is well
positioned to support this share repurchase program.
The company expects to repurchase shares either in open market or
through negotiated transactions. No particular time limit and
price target was provided for the completion of the program.
Pep Boys reported a significant increase in its profit (excluding
debt refinancing expense of $11.2 million and an asset impairment
charge of $8.8 million) to $13.2 million or 25 cents per share in
the third quarter of the year ended October 27, 2012, from $7
million or 13 cents per share in the comparable quarter of the
prior fiscal year. The earnings per share surpassed the Zacks
Consensus Estimate by 8 cents.
The company's revenues for the quarter decreased 2.4% to $509.6
million from $522.2 million a year ago. It missed the Zacks
Consensus Estimate of $532 million.
Pep Boys, based in Philadelphia, supplies tires, batteries, new
and remanufactured parts for vehicles, chemicals and maintenance
items, fashion, electronic, and performance accessories. It also
provides non-automotive merchandise such as generators, power
tools and personal transportation products.
The company, which competes with
O'Reilly Automotive Inc.
), currently retains a Zacks #4 Rank, which translates into a
short-term (1 to 3 months) Sell rating.
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