Leading drugstore chain operator Rite Aid Corp. (RAD) reported a growth of 1% in same-store sales for the five weeks ended February 26, 2011.
For the month of February, front-end same-store sales increased 1.1%. Results moderated from an increase of 2.2% in January 2011.
Pharmacy same-store sales in February improved 0.9% despite a 243 basis point headwind from new generic introductions. Results improved from a 0.6% increase in January 2011. Prescriptions filled at comparable stores increased 1.3%.
Total drugstore sales improved 0.1% year over year to $2.438 billion for February 2011. In the five-week period, Prescription revenue contributed 68% of drugstore sales while third party prescription revenue accounted for 96.4% of pharmacy sales.
Rite Aid reported full year, same-store sales decline of 0.7%. Front-end same-store sales declined 0.3% while pharmacy same-store sales decreased 0.9%. For the 52 weeks ended February 26, 2011, total drugstore sales recorded a year-over-year decline of 1.8% to gross $25.118 billion. Prescription revenue represented 67.8% of total drugstore sales and third-party prescription revenue accounted for 96.2% of pharmacy sales.
Walgreen Co. (WAG), which competes with Rite Aid Corp., reported February same store sales growth of 3.1%. Total sales increased 7.8% year over year to $5.72 billion.
Rite Aid posted a third quarter loss per share of 9 cents, beating the Zacks Consensus Estimate of a loss of 13 cents.
Rite Aid expects fiscal 2011 revenue between $25.0 billion and $25.2 billion based on same-store sales decline of 1.5% to 0.9%. The company expects net loss in the range of $525 million to $655 million (or 60 cents to 74 cents per share).
The Zacks Consensus Estimate for fourth-quarter 2011 is a loss of 22 cents per share. For fiscal years 2011 and 2012, the Zacks Consensus Estimates are a respective loss of 64 cents per share and 47 cents per share.
The company competes with, among others, retail drugstore chains, independently owned drugstores, supermarkets, mass merchandisers, discount stores, dollar stores and mail order pharmacies. Competitive pressure in the industry is unlikely to subside with continued consolidation, new store openings and increased mandatory mail orders.
The quantitative Zacks #3 Rank (short-term Hold rating) for Rite Aid Corp. indicates no clear directional pressure on the shares over the near term.
Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation, through its subsidiaries, operates retail drugstores in the United States.
RITE AID CORP (RAD): Free Stock Analysis Report
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