what do you think of PBY's latest acquisition of 17 tire centers? Are you on board with that strategy? Don't you think they should get their own house in order before they try fixing someone else's? Are you going to hold your position into earnings on Tuesday? Isn't that bit risky to do so? I tried calling the CFO a couple times to determine if they finally began buying back any shares back in the second quarter, but I guess shareholder's are not important enough to return calls to- hence no call back. I guess if you are staying long the event, you figure there is more upside reward than downside risk.
Still holding 30,000 at $11.10+/- average cost. Unless we get a big bump Monday I plan to stay till after earnings release. They haven't beat expect in at least four quarters. I'm betting they will this time. All the recent acquisitions last 1-2 years are starting to annualize and should show some nice growth. I really suspect the revenue numbers last quarter were positively effected by acquisition revenue growth and not base growth. These acquisitions should show 10-15% same store growth on year 2 and 5-10% year 3. ORLY would show double those numbers but that's what we can expect from PBY. PBY last quarter reported 6.5% same store sales growth while AAP was actually down three tenths or almost flat. AZO reports in 2-3 weeks and looks strong from reports I've gotten. MNRO recently disappointed and lowered their forward guidance which also is a concern. Saying all this I think PBY will barely miss or beat on revenue. Hard to call. In the past PBY was usually 400 basis points behind ORLY and AZO average. That would give PBY about 2.5% same store growth and narrowly miss expect. However, I expect them to beat 19 cent EPS and hit 24-26 cents. If they can get close to revenue expect we could rock.
As for the recent acquisition there is an old saying on Wall Street that you always release bad news after market close and if really bad news you release on Friday after close for investors to digest and hopefully forget over the weekend. As you know I have complained for almost a decade now about the poor press releases that PBY issues. Their PR person should be fired. I am wondering why they only acquired 18 stores from the 65 that Discount Tire owned. What about the other 48? Did PBY acquire the ones that were failing?
I am also concerned that there was no mention of this acquisition being accretive to earnings. The failure to make that statement lends one to think they will have an initial negative effect. Continued
I would add that those that bought PBY stock hoping for a buyout may be getting the feeling that they are focused on growing the company instead of selling the company. Last quarter if you add up all the Schedule 13 filings you will see that large holders and institutions sold 3 million+ more shares than they bought or added.
Having said this I still think this strategy of buying locations close to existing stores and utilizing the hub and spoke may actually work. When PBY was opening new stores close to existing stores they were cannibalizing sales of existing stores and hurting same store comps. This way they can actually grow sales and become more dominant in the market. They have grown from about 500 stores to 750 stores fairly quickly. They just need a new CEO without the old Sears mentality. DaninFW