"We just do not have the market density that we need in most of our markets," said CEO Mike Odell. Even in its strongest two metro areas, Philadelphia and Los Angeles, Pep Boys, with 560 units nationwide, could stand to beef up, he said. The company is targeting the purchase of 30 stores per year over the next few years, and Odell said it would be happy buying between 20 and 40 units annually during that time.
Despite management's goals of growth, Pep Boys had a rough quarter financially due to the amount of miles driven by Americans declining every month this year, Odell said. "The economic environment in which we've been operating has been difficult," he said.
During the third quarter, same-store sales fell 10.4% year over year, including a 12.1% plunge in the retail parts of the stores and an 8.2% dip in Pep Boys' service areas. The net loss of $7.3 million was better than Q3 of last year, when the company lost $28 million, but that period included an inventory write down and other expenses.
But Odell said he is encouraged by some future developments, like continually falling gas prices, a lack of competition due to closing car dealerships and the possibility of people holding on to their vehicles longer in this depressed economy.
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