Exhibit 99.2
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES | (UNAUDITED) |
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|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(dollar amounts in thousands, except per share amounts) |
|
|
| Thirteen Weeks Ended |
| Twenty-Six weeks ended |
| ||||||||||||||||
|
| July 30, 2011 |
| July 31, 2010 |
| July 30, 2011 |
| July 31, 2010 |
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| % |
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| % |
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| % |
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| % |
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| Amount |
| Sales |
| Amount |
| Sales |
| Amount |
| Sales |
| Amount |
| Sales |
| ||||
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| ||||
Merchandise sales |
| $ | 415,267 |
| 79.5 |
| $ | 406,179 |
| 80.5 |
| $ | 823,894 |
| 79.5 |
| $ | 815,368 |
| 80.3 |
|
Service revenue |
| 107,327 |
| 20.5 |
| 98,676 |
| 19.5 |
| 212,240 |
| 20.5 |
| 199,520 |
| 19.7 |
| ||||
Total revenues |
| 522,594 |
| 100.0 |
| 504,855 |
| 100.0 |
| 1,036,134 |
| 100.0 |
| 1,014,888 |
| 100.0 |
| ||||
Costs of merchandise sales |
| 287,721 |
| 69.3 |
| 282,362 |
| 69.5 |
| 573,050 |
| 69.6 |
| 566,158 |
| 69.4 |
| ||||
Costs of service revenue |
| 99,663 |
| 92.9 |
| 87,992 |
| 89.2 |
| 192,752 |
| 90.8 |
| 176,634 |
| 88.5 |
| ||||
Total costs of revenues |
| 387,384 |
| 74.1 |
| 370,354 |
| 73.4 |
| 765,802 |
| 73.9 |
| 742,792 |
| 73.2 |
| ||||
Gross profit from merchandise sales |
| 127,546 |
| 30.7 |
| 123,817 |
| 30.5 |
| 250,844 |
| 30.5 |
| 249,210 |
| 30.6 |
| ||||
Gross profit from service revenue |
| 7,664 |
| 7.1 |
| 10,684 |
| 10.8 |
| 19,488 |
| 9.2 |
| 22,886 |
| 11.5 |
| ||||
Total gross profit |
| 135,210 |
| 25.9 |
| 134,501 |
| 26.6 |
| 270,332 |
| 26.1 |
| 272,096 |
| 26.8 |
| ||||
Selling, general and administrative expenses |
| 113,268 |
| 21.7 |
| 113,108 |
| 22.4 |
| 222,168 |
| 21.4 |
| 224,740 |
| 22.1 |
| ||||
Net (loss) gain from dispositions of assets |
| (3 | ) | — |
| 2,449 |
| 0.5 |
| 86 |
| — |
| 2,494 |
| 0.2 |
| ||||
Operating profit |
| 21,939 |
| 4.2 |
| 23,842 |
| 4.7 |
| 48,250 |
| 4.7 |
| 49,850 |
| 4.9 |
| ||||
Non-operating income |
| 569 |
| 0.1 |
| 621 |
| 0.1 |
| 1,156 |
| 0.1 |
| 1,205 |
| 0.1 |
| ||||
Interest expense |
| 6,444 |
| 1.2 |
| 6,643 |
| 1.3 |
| 12,941 |
| 1.3 |
| 13,251 |
| 1.3 |
| ||||
Earnings from continuing operations before income taxes |
| 16,064 |
| 3.1 |
| 17,820 |
| 3.5 |
| 36,465 |
| 3.5 |
| 37,804 |
| 3.7 |
| ||||
Income tax expense |
| 2,173 |
| 13.5 | (1) | 7,021 |
| 39.4 | (1) | 10,169 |
| 27.9 | (1) | 14,845 |
| 39.3 | (1) | ||||
Earnings from continuing operations |
| 13,891 |
| 2.7 |
| 10,799 |
| 2.1 |
| 26,296 |
| 2.5 |
| 22,959 |
| 2.3 |
| ||||
Income (loss) from discontinued operations, net of tax |
| 52 |
| — |
| (201 | ) | — |
| 15 |
| — |
| (411 | ) | — |
| ||||
Net earnings |
| 13,943 |
| 2.7 |
| 10,598 |
| 2.1 |
| 26,311 |
| 2.5 |
| 22,548 |
| 2.2 |
| ||||
Retained earnings, beginning of period |
| 412,716 |
|
|
| 384,451 |
|
|
| 402,600 |
|
|
| 374,836 |
|
|
| ||||
Cash dividends |
| (1,586 | ) |
|
| (1,581 | ) |
|
| (3,171 | ) |
|
| (3,160 | ) |
|
| ||||
Shares issued and other |
| (150 | ) |
|
| (223 | ) |
|
| (817 | ) |
|
| (979 | ) |
|
| ||||
Retained earnings, end of period |
| $ | 424,923 |
|
|
| $ | 393,245 |
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|
| $ | 424,923 |
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|
| $ | 393,245 |
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Basic earnings per share: |
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| ||||
Earnings from continuing operations |
| $ | 0.26 |
|
|
| $ | 0.21 |
|
|
| $ | 0.49 |
|
|
| $ | 0.44 |
|
|
|
Discontinued operations, net of tax |
| — |
|
|
| (0.01 | ) |
|
| — |
|
|
| (0.01 | ) |
|
| ||||
Basic earnings per share |
| $ | 0.26 |
|
|
| $ | 0.20 |
|
|
| $ | 0.49 |
|
|
| $ | 0.43 |
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Diluted earnings per share: |
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Earnings from continuing operations |
| $ | 0.26 |
|
|
| $ | 0.20 |
|
|
| $ | 0.49 |
|
|
| $ | 0.43 |
|
|
|
Discontinued operations, net of tax |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| ||||
Diluted earnings per share |
| $ | 0.26 |
|
|
| $ | 0.20 |
|
|
| $ | 0.49 |
|
|
| $ | 0.43 |
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| ||||
Cash dividends per share |
| $ | 0.03 |
|
|
| $ | 0.03 |
|
|
| $ | 0.06 |
|
|
| $ | 0.06 |
|
|
|
(1) As a percentage of earnings from continuing operations before income taxes
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
| (UNAUDITED) |
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
|
(dollar amounts in thousands) |
|
|
|
| July 30, 2011 |
| January 29, 2011 |
| July 31, 2010 |
| |||
|
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|
| |||
Assets |
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|
| |||
Current assets: |
|
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|
|
|
| |||
Cash and cash equivalents |
| $ | 61,977 |
| $ | 90,240 |
| $ | 92,363 |
|
Accounts receivable, less allowance for uncollectible accounts of $1,191; $1,551 and $1,703 |
| 21,731 |
| 19,540 |
| 24,204 |
| |||
Merchandise inventories |
| 584,297 |
| 564,402 |
| 558,932 |
| |||
Prepaid expenses |
| 19,694 |
| 28,542 |
| 20,816 |
| |||
Other current assets |
| 50,891 |
| 60,812 |
| 53,376 |
| |||
Total current assets |
| 738,590 |
| 763,536 |
| 749,691 |
| |||
Property and equipment - net |
| 693,742 |
| 700,981 |
| 694,262 |
| |||
Goodwill |
| 48,584 |
| 2,549 |
| 2,549 |
| |||
Deferred income taxes |
| 67,988 |
| 66,019 |
| 58,968 |
| |||
Other long-term assets |
| 31,700 |
| 23,587 |
| 14,815 |
| |||
Total assets |
| $ | 1,580,604 |
| $ | 1,556,672 |
| $ | 1,520,285 |
|
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|
|
| |||
Liabilities and stockholders’ equity |
|
|
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|
| |||
Current liabilities: |
|
|
|
|
|
|
| |||
Accounts payable |
| $ | 230,884 |
| $ | 210,440 |
| $ | 196,676 |
|
Trade payable program liability |
| 61,440 |
| 56,287 |
| 55,280 |
| |||
Accrued expenses |
| 206,627 |
| 236,028 |
| 226,505 |
| |||
Deferred income taxes |
| 58,825 |
| 56,335 |
| 35,750 |
| |||
Current maturities of long-term debt |
| 1,079 |
| 1,079 |
| 1,079 |
| |||
Total current liabilities |
| 558,855 |
| 560,169 |
| 515,290 |
| |||
|
|
|
|
|
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|
| |||
Long-term debt less current maturities |
| 294,583 |
| 295,122 |
| 305,661 |
| |||
Other long-term liabilities |
| 75,688 |
| 70,046 |
| 76,325 |
| |||
Deferred gain from asset sales |
| 146,573 |
| 152,875 |
| 159,177 |
| |||
|
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| |||
Stockholders’ equity: |
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|
|
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|
| |||
Common stock, par value $1 per share: |
|
|
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|
|
| |||
Authorized 500,000,000 shares; issued 68,557,041 shares |
| 68,557 |
| 68,557 |
| 68,557 |
| |||
Additional paid-in capital |
| 295,934 |
| 295,361 |
| 294,535 |
| |||
Retained earnings |
| 424,923 |
| 402,600 |
| 393,245 |
| |||
Accumulated other comprehensive loss |
| (15,870 | ) | (17,028 | ) | (18,758 | ) | |||
Treasury stock, at cost - 15,883,352 shares and 15,971,910 shares and 16,072,557 shares |
| (268,639 | ) | (271,030 | ) | (273,747 | ) | |||
Total stockholders’ equity |
| 504,905 |
| 478,460 |
| 463,832 |
| |||
Total liabilities and stockholders’ equity |
| $ | 1,580,604 |
| $ | 1,556,672 |
| $ | 1,520,285 |
|
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES | (UNAUDITED) |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
Twenty-Six weeks ended |
| July 30, 2011 |
| July 31, 2010 |
| ||
|
|
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|
|
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net earnings |
| $ | 26,311 |
| $ | 22,548 |
|
Adjustments to reconcile net earnings to net cash provided by continuing operations: |
|
|
|
|
| ||
(Income) loss from discontinued operations, net of tax |
| (15 | ) | 411 |
| ||
Depreciation and amortization |
| 39,654 |
| 36,656 |
| ||
Amortization of deferred gain from asset sales |
| (6,302 | ) | (6,299 | ) | ||
Stock compensation expense |
| 1,908 |
| 1,998 |
| ||
Deferred income taxes |
| 4,238 |
| 5,600 |
| ||
Net gain from disposition of assets |
| (86 | ) | (2,494 | ) | ||
Loss from asset impairment |
| 389 |
| 970 |
| ||
Other |
| 272 |
| 179 |
| ||
Changes in assets and liabilities, net of the effects of acquisitions: |
|
|
|
|
| ||
Decrease in accounts receivable, prepaid expenses and other |
| 21,816 |
| 19,673 |
| ||
(Increase) decrease in merchandise inventories |
| (12,917 | ) | 186 |
| ||
Increase (decrease) in accounts payable |
| 12,043 |
| (6,298 | ) | ||
Decrease in accrued expenses |
| (33,202 | ) | (14,917 | ) | ||
(Decrease) increase in other long-term liabilities |
| (2,831 | ) | 911 |
| ||
Net cash provided by continuing operations |
| 51,278 |
| 59,124 |
| ||
Net cash used in discontinued operations |
| (44 | ) | (1,249 | ) | ||
Net cash provided by operating activities |
| 51,234 |
| 57,875 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Capital expenditures |
| (30,636 | ) | (27,284 | ) | ||
Proceeds from dispositions of assets |
| 89 |
| 4,077 |
| ||
Premiums paid on life insurance policies |
| (795 | ) | (500 | ) | ||
Acquisitions, net of cash acquired |
| (42,757 | ) | (144 | ) | ||
Collateral investment |
| (4,763 | ) | 500 |
| ||
Net cash used in continuing operations |
| (78,862 | ) | (23,351 | ) | ||
Net cash provided by discontinued operations |
| — |
| 569 |
| ||
Net cash used in investing activities |
| (78,862 | ) | (22,782 | ) | ||
|
|
|
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|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Borrowings under line of credit agreements |
| 5,045 |
| 16,290 |
| ||
Payments under line of credit agreements |
| (5,045 | ) | (16,290 | ) | ||
Borrowings on trade payable program liability |
| 59,097 |
| 63,808 |
| ||
Payments on trade payable program liability |
| (53,944 | ) | (42,627 | ) | ||
Payment for finance issuance cost |
| (2,441 | ) | — |
| ||
Debt payments |
| (539 | ) | (540 | ) | ||
Dividends paid |
| (3,171 | ) | (3,160 | ) | ||
Other |
| 363 |
| 463 |
| ||
Net cash (used in) provided by financing activities |
| (635 | ) | 17,944 |
| ||
Net (decrease) increase in cash and cash equivalents |
| (28,263 | ) | 53,037 |
| ||
Cash and cash equivalents at beginning of period |
| 90,240 |
| 39,326 |
| ||
Cash and cash equivalents at end of period |
| $ | 61,977 |
| $ | 92,363 |
|
|
|
|
|
|
| ||
Supplemental cash flow information: |
|
|
|
|
| ||
Cash paid for income taxes |
| $ | 629 |
| $ | 810 |
|
Cash paid for interest |
| $ | 11,523 |
| $ | 11,452 |
|
Accrued purchases of property and equipment |
| $ | 1,416 |
| $ | 662 |
|
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE |
| (in thousands, except per share data) |
|
|
|
| Thirteen Weeks Ended |
| Twenty-Six weeks ended |
| |||||||||
|
|
|
| July 30, 2011 |
| July 31, 2010 |
| July 30, 2011 |
| July 31, 2010 |
| |||||
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(a) | Earnings from continuing operations |
|
|
| $ | 13,891 |
| $ | 10,799 |
| $ | 26,296 |
| $ | 22,959 |
|
| Income (loss) from discontinued operations, net of tax |
|
|
| 52 |
| (201 | ) | 15 |
| (411 | ) | ||||
|
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|
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|
|
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|
| ||||
| Net earnings |
|
|
| $ | 13,943 |
| $ | 10,598 |
| $ | 26,311 |
| $ | 22,548 |
|
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(b) | Basic average number of common shares outstanding during period |
|
|
| 52,952 |
| 52,682 |
| 52,901 |
| 52,609 |
| ||||
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| ||||
| Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price |
|
|
| 697 |
| 447 |
| 691 |
| 426 |
| ||||
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|
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| ||||
(c) | Diluted average number of common shares assumed outstanding during period |
|
|
| 53,649 |
| 53,129 |
| 53,592 |
| 53,035 |
| ||||
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| ||||
| Basic earnings per share: |
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| ||||
| Earnings from continuing operations |
| (a) / (b) |
| $ | 0.26 |
| $ | 0.21 |
| $ | 0.49 |
| $ | 0.44 |
|
| Discontinued operations, net of tax |
|
|
| — |
| (0.01 | ) | — |
| (0.01 | ) | ||||
| Basic earnings per share |
|
|
| $ | 0.26 |
| $ | 0.20 |
| $ | 0.49 |
| $ | 0.43 |
|
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| ||||
| Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
| ||||
| Earnings from continuing operations |
| (a) / (c) |
| $ | 0.26 |
| $ | 0.20 |
| $ | 0.49 |
| $ | 0.43 |
|
| Discontinued operations, net of tax |
|
|
| — |
| — |
| — |
| — |
| ||||
| Diluted earnings per share |
|
|
| $ | 0.26 |
| $ | 0.20 |
| $ | 0.49 |
| $ | 0.43 |
|
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
ADDITIONAL INFORMATION | (dollar amounts in thousands) |
|
| Thirteen Weeks Ended |
| Twenty-Six weeks ended |
| ||||||||
|
| July 30, 2011 |
| July 31, 2010 |
| July 30, 2011 |
| July 31, 2010 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Capital expenditures |
| $ | 12,513 |
| $ | 14,773 |
| $ | 30,636 |
| $ | 27,284 |
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
| $ | 19,770 |
| $ | 18,442 |
| $ | 39,654 |
| $ | 36,656 |
|
|
|
|
|
|
|
|
|
|
| ||||
Non-operating income: |
|
|
|
|
|
|
|
|
| ||||
Net rental revenue |
| $ | 523 |
| $ | 570 |
| $ | 1,017 |
| $ | 1,087 |
|
Investment income |
| 40 |
| 45 |
| 122 |
| 111 |
| ||||
Other income |
| 6 |
| 6 |
| 17 |
| 7 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total |
| $ | 569 |
| $ | 621 |
| $ | 1,156 |
| $ | 1,205 |
|
|
|
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|
|
|
|
|
| ||||
Comparable sales percentages: |
|
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|
|
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|
| ||||
Service |
| 0.3 | % | -0.7 | % | 0.9 | % | -0.3 | % | ||||
Merchandise |
| -2.5 | % | 2.5 | % | -1.8 | % | 2.1 | % | ||||
Total |
| -2.0 | % | 1.8 | % | -1.3 | % | 1.6 | % | ||||
|
|
|
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|
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|
|
| ||||
Total square feet of retail space (including service centers) |
|
|
|
|
| 12,563,000 |
| 11,749,000 |
| ||||
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| ||||
Store count |
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| ||||
Supercenter |
|
|
|
|
| 561 |
| 555 |
| ||||
Service & Tire Center |
|
|
|
|
| 156 |
| 30 |
| ||||
Retail Only |
|
|
|
|
| 8 |
| 9 |
| ||||
Total |
|
|
|
|
| 725 |
| 594 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Sales and gross profit by line of business (A): |
|
|
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|
|
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|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Service center revenue |
| $ | 260,835 |
| $ | 236,051 |
| $ | 508,165 |
| 476,377 |
| |
Retail sales |
| 261,759 |
| 268,804 |
| 527,969 |
| 538,511 |
| ||||
Total revenues |
| $ | 522,594 |
| $ | 504,855 |
| $ | 1,036,134 |
| $ | 1,014,888 |
|
|
|
|
|
|
|
|
|
|
| ||||
Gross profit from service center revenue |
| $ | 60,669 |
| $ | 55,671 |
| $ | 119,631 |
| 113,512 |
| |
Gross profit from retail sales |
| 74,541 |
| 78,830 |
| 150,701 |
| 158,584 |
| ||||
Total gross profit |
| $ | 135,210 |
| $ | 134,501 |
| $ | 270,332 |
| $ | 272,096 |
|
|
|
|
|
|
|
|
|
|
| ||||
Comparable sales percentages by line of business (A): |
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|
| ||||
|
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|
|
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|
| ||||
Service center revenue |
| -0.7 | % | 0.1 | % | -0.2 | % | 0.5 | % | ||||
Retail sales |
| -3.1 | % | 3.4 | % | -2.3 | % | 2.6 | % | ||||
Total revenues |
| -2.0 | % | 1.8 | % | -1.3 | % | 1.6 | % | ||||
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Gross profit percentage by line of business (A): |
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Gross profit percentage from service center revenue |
| 23.3 | % | 23.6 | % | 23.5 | % | 23.8 | % | ||||
Gross profit percentage from retail sales |
| 28.5 | % | 29.3 | % | 28.5 | % | 29.4 | % | ||||
Total gross profit percentage |
| 25.9 | % | 26.6 | % | 26.1 | % | 26.8 | % |
(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.