Leading drugstore chain operator Rite Aid Corporation (RAD) reported a marginal increase of 1.3% in same-store sales for the four weeks ended September 24, 2011. Results decreased somewhat from a growth of 2.5% in August 2011. In the reported month, same-store sales were negatively affected by Hurricane Irene.
For the month of September, front-end same-store sales decreased 0.5%. Pharmacy same-store sales in the month improved 2.1% despite a 143 basis point headwind from new generic introductions. Prescriptions count decreased 0.5% at comparable stores.
Total drugstore sales increased 1.1% year over year to $1,923 million for September 2011. In the four-week period, prescription revenue contributed 68.8% of drugstore sales while third party prescription revenue accounted for 96.4% of pharmacy sales.
For the thirty-week period ended September 24, 2011, the company reported same-store sales increase of 1.4% with total drugstore sales increasing 0.9% to $14,535 million. Prescription revenue contributed 68.4% of drugstore sales while third party prescription revenue accounted for 96.4% of pharmacy sales.
Rite Aid posted a second quarter loss of 11 cents a share, beating the Zacks Consensus Estimate of a loss of 18 cents per share.
Looking ahead, Rite Aid expects fiscal 2012 revenue to be between $25.8 billion and $26.1 billion based on same-store sales increase of 0.75% to 2.0%. Net loss is now expected to be in the range of $345 million to $495 million (or 40 cents to 56 cents per share).
Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation operates in a highly fragmented specialty retail sector and faces intense competition from CVS Caremark Corporation (CVS), Walgreen Co. (WAG) and Wal-Mart Stores Inc. (WMT).
Rite Aid Corporation currently has a Zacks #2 Rank, implying a short-term Buy rating on the stock. We hold a long-term Neutral recommendation on the stock.
