Rite Aid Corp. (RAD), one of the nation’s leading drugstore chains, reported yet another month of disappointing same-store sales. After falling 1.0% in August 2010, same-store sales dropped further by 0.9% in September, marking the 16th consecutive month of decline, since May 2009, when it had registered positive same-store sales of 0.6%.
For the month under review, Rite posted sales of $1,901 million, down 2.0% from the year-ago quarter.
Front-End Same-Store Sales
As per the company, front-end same stores sales fell 0.3% in September 2010, an improvement nevertheless from a 0.9% decline August 2010.
Pharmacy Same Store Sales
The company informed that pharmacy same-store sales dropped 1.2% in September 2010, after witnessing a marginal decline of 1.0% and 1.4% in August and July, respectively. Rite said that the introduction of new generic drugs hauled up pharmacy’s September same-store sales by 233 basis points.
Prescription Same Store Sales
Prescription recorded a 1.3% decrease in same-store sales in September 2010 as compared to a decrease of 1.2% in August and 1.5% in July.
Thirty-week Period Sales
For the thirty weeks ended September 25, 2010, same-store sales plummeted 1.2% with Front-End, Pharmacy, and Prescription contributing 1.0%, 1.3% and 1.8%, respectively, to the total fall. Total drugstore sales for the thirty-week period came in at $14,407 million as compared to $14,743 million in the prior-year period.
Outlook
Rite expects its various sales initiatives like a new wellness and customer loyalty program along with immunization training to aid a number of Rite Aid pharmacists providing vaccinations, should help drive company sales in the long term.
Guidance
The company which is the operator of 4,759 drug stores, now expects total sales between $25 billion and $25.4 billion for fiscal 2011. Same-stores sales for fiscal year 2011 are expected in the range of negative 1.5% to break-even.
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