Rite Aid Corp. (RAD), one of the nation’s leading drugstore chains, reported yet another month of disappointing same-store sales. After falling 1.7% in May 2010, same-store sales dropped further by 2.5% in June, marking the 13th consecutive month of negative sales trends since May 2009, when it had registered positive same-store sales of 0.6%.
For the month under review, Rite Aid posted sales of $1,908 million, down 3.3% from the year-ago quarter. Rite Aid hinted that the prescription revenue contributed 67.4% of drugstore sales, and third party prescription revenue accounted for 96.3% of pharmacy sales.
Front-End Same Store Sales
Rite Aid said that front-end same stores sales fell 1.1% in June 2010, reflecting an improvement over a decline of 3.6% in May. However, front-end same-store sales were weak compared to the combined March/April sales growth of 0.3%.
Pharmacy Same Store Sales
The company informed that pharmacy same-store sales dropped 3.1% in June 2010, after witnessing a marginal decline of 0.8% and 0.9% in the month of May and April, respectively. Rite Aid said that the introduction of new generic drugs hauled pharmacy’s June same-store sales by 157 basis points.
Prescription Same Store Sales
Prescription recorded a 3.7% decrease in same-store sales in June 2010 compared with a decrease of 2.0% in May and 1.8% in April.
Seventeen-Week Period Sales
For the seventeen weeks ended June 26, 2010, same-store sales plummeted 1.4% with Front-end, Pharmacy and Prescription contributing 1.2%, 1.4% and 2.2%, respectively to the total fall. Total drugstore sales for the seventeen-week period came in at $8,276 million compared to $8,479 million in the prior-year period.
Outlook
Rite Aid expects its various sales initiatives like a new wellness and customer loyalty program coupled with immunization training to aid a number of Rite Aid pharmacists providing vaccinations should help drive the sales of the company in the long term.
Guidance
Rite Aid, the operator of 4,759 drug stores, now expects total sales between $25.2 and $26.6 billion in fiscal 2011. Same-stores sales are expected in the range of negative 1.0% to positive 1.0% for fiscal 2011.
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