Putting the Pep Back in Pep Boys

Pep Boys (PBY) auto parts retailers reported first quarter results that surpassed the most bullish of estimates. The company has been in a prolonged restructuring as it was 2005 the last time the company reported an annual profit. This quarter puts the company on the right track towards achieving that goal, as the company reported net income of $11.1 million in the quarter or 21 cents per share. Analysts estimates ranged between profits of 4 cents a share and 11 cents a share, so the actual results were nearly twice the bullish end of the range. The results were aided by $6.2 million gain in bond repurchases, which accounted for more than half of the operating profits. Overall sales and same store sales were both down ever so slightly compared to last year, but not enough to be of any real consequence.

Shares are posed to open higher on the results, as they are up nearly 9% in the pre market. This continues the stocks strong performance over the last few months, which had seen the shares under $3 for a period in early March. Since reaching those lows, the stock has tripled and will likely open over the $9 mark. Clearly, the market is starting to reward the restructuring efforts that have been underway for years, and the overall improvement in the market does not hurt this stock with a beta of close to 2.