Customer leaves a Pep Boys – Manny, Moe & Jack auto parts store in Hayward, Calif. (AP Photo/Paul Sakuma)

New car sales buff Pep Boys’ outlook

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Customer leaves a Pep Boys – Manny, Moe & Jack auto parts store in Hayward, Calif. (AP Photo/Paul Sakuma)

Customer leaves a Pep Boys – Manny, Moe & Jack auto parts store in Hayward, Calif. (AP Photo/Paul Sakuma)

New car sales buff Pep Boys’ outlook

By: Chris Woodyard, USA TODAY

With the auto industry finishing the year with the highest sales since 2007, investors might consider another way of taking advantage of Americans’ newfound love of motoring: auto parts and service.

Pep Boys (PBY), one of the best known retail auto-parts chains, is already seeing consumers pouring some of the added cash in their pockets from a rising economy into their cars. In releasing third-quarter earnings this month, the company noted that tire sales are on the increase — up 3.1% on units on a same-store basis, with a 1.2% increase in pricing, says Stifel analyst James Albertine in a Dec. 9 note.

Plus, the stores are moving to inventories of better-quality stuff. Pep Boys is shifting its mix away from private-label merchandise toward more name brands. Albertine said, however, that he expects most of Pep Boys’ gains to come in service.