Pep Boys Acquires 17 Tire Stores

Zacks

Last week, Pep Boys - Manny, Moe & Jack (PBY) purchased 17 Discount Tire Centers from AKH Company Inc. All the centers are in the greater Los Angeles market.

The stores will be opened under the Pep Boys brand name on Sep 12, 2013. They will provide all kinds of maintenance and repair services and sell branded tires.

The acquisition takes the total tally of Pep Boys stores in California to 150 and in the U.S. to 750. As a result, at least one Pep Boys location will now be within a 3-mile radius of almost three-fourth of Los Angeles’ population.

The easy access to stores should help boost Pep Boys’ revenues. The company generated revenues of $527.6 million in the thirteen weeks ended Aug 3, 2013, up 0.4% from $525.7 million for the thirteen weeks ended Jul 28, 2012. Pep Boys has been striving to improve customer satisfaction and convenience since its inception in California in 1933.

Based in Philadelphia, PA, Pep Boys 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.

Currently, Pep Boys carries a Zacks Rank #3 (Hold). Other stocks worth considering in the auto parts business are The Goodyear Tire & Rubber Company (GT), O’Reilly Automotive Inc. (ORLY) and CarMax Inc. (KMX). While Goodyear carries a Zacks Rank #1 (Strong Buy), O’Reilly and CarMax carry a Zacks Rank #2 (Buy).

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