Pep Boys 2005 Annual Report Download - page 3

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On the service and tire side, our primary focus is on improving labor and service bay productivity by:
•Developing our service advisor team. We are focused on providing ongoing training and measuring
individual metrics such as sales per hour and Customer Satisfaction Index (CSI) levels for this
critical position that deals directly with our customers.
•Adding flat-rate technical staff. We are actively recruiting and hiring these skilled technicians in order
to increase the utilization of our service bays and provide more capacity to service customers.
•Driving tire sales. We have a very strong tire offering that provides great value and choice for our
customers. In addition, tires are an excellent first transaction for customers to experience Pep Boys
and often lead to the customer requesting additional attachment sales and related services. In every
customer interaction, selling tires must become a priority.
We have set a powerful foundation for Pep Boys’ success. In the fourth quarter of 2005, that
foundation began to take hold. As compared to the previous year, we achieved improvement in gross
profit dollars and gross profit rate vs. last year on the retail side, and recorded accelerated comparable
Service Center Revenue from the second and third quarters. We expect that this was the beginning of our
road back to superior financial performance.
Having just returned from our National Managers’Meeting, I am very encouraged to report that, despite
the difficult year we just experienced, our front-line team remains highly motivated and extremely
energetic. This team of store managers, service managers, field managers and associates are exceptionally
knowledgeable and capable professionals. They all know our game plan and we are committed to ensuring
that 2006 will be the year that both sides of the business contribute to an improved bottom line.
Lawrence N. Stevenson
Chief Executive Officer