Rite Aid Corp. (RAD), one of the nation’s leading drugstore chains, reported yet another month of poor same-store sales. After falling 0.9% in September 2010, same-store sales dropped further by 1.7% in October. This marks the 17th 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 $1,909 million, down 2.7% from the year-ago quarter.
Front-End Same-Store Sales
As per the company, front-end same-stores sales fell 1.3% in October 2010, a sharp decline from a moderate slide of 0.3% in September 2010.
Prescription Same-Store Sales
Prescription registered a 1.9% cut in same-store sales in October 2010 compared with a reduction of 1.3% in September and 1.2% in August.
Pharmacy Same-Store Sales
The company hinted that pharmacy same-store sales dropped 1.8% in October 2010, after recording marginal declines of 1.2% and 1.0% in September and August, respectively. Rite said that the introduction of new generic drugs towed down pharmacy’s October same-store sales by 242 basis points.
34-week Period Sales
For the thirty four-week ended October 23, 2010, same-store sales tumbled 1.3% with Front-End, Pharmacy and Prescription responsible for 1.0%, 1.4% and 1.8%, respectively, of the total fall. Total drugstore sales for the thirty four-week period were $16,316 million compared with $16,706 million in the prior-year period.
Guidance
Rite, the operator of 4,735 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.
Rite currently has a short-term Zacks #4 Rank (Sell) rating and a long-term Neutral recommendation.
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