Rite Aid Corporation (RAD), a leading drugstore chain operator, reported an increase of 2.9% in same-store sales for the four-week period ended October 22, 2011. Increase in comparable store sales were primarily driven by increased prescription counts and growth at pharmacy and front-end same store sales.
For the month of October, front-end same-store sales inched up 1.3%. Pharmacy same-store sales in the month improved 3.6% despite a 160 basis point headwind from new generic introductions. Prescriptions count also increased 1.3% at comparable stores.
Total drugstore sales increased 2.8% year over year to $1,962.0 million for October 2011. In the four-week period, prescription revenue contributed 69.3% of drugstore sales while third party prescription revenue accounted for 96.4% of pharmacy sales.
For the thirty-four week period ended October 22, 2011, the company reported same-store sales increase of 1.6% with total drugstore sales increasing 1.1% to $16,497.0 million. Same-store sales growth at pharmacy and front-end contributed 1.9% and 1.1%, respectively. Prescription counts registered a growth of 0.3% during the period.
For the thirty four week period ended October 22, 2011, prescription revenue contributed 68.5% of drugstore sales while third party prescription revenue accounted for 96.4% of pharmacy sales.
Rite Aid posted 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.
