Rite Aid Corp. reported upticks in revenue and same-store sales for its fiscal 2012 third quarter and narrowed its net loss in the period, beating Wall Street analyst estimates.

Rite Aid, third quarter, fiscal 2012, revenue, same-store sales, net loss, comparable-store sales, comp-store sales, John Standley, drug store, pharmacy, front end, adjusted EBITDA, wellness+, comparable pharmacy sales, flu immunization program, pharmacy sales, flu shots, Russell Redman

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Rite Aid sees results improve in 3Q

December 15th, 2011

CAMP HILL, Pa. – Rite Aid Corp. reported upticks in revenue and same-store sales for its fiscal 2012 third quarter and narrowed its net loss in the period, beating Wall Street analyst estimates.

Rite Aid said Thursday that for the 13-week third quarter ended Nov. 26, revenue totaled $6.3 billion, up 1.8% from $6.2 billion a year earlier. The drug store chain attributed the gain to a rise in comparable-store sales, which were partially offset by store closings.

For the quarter, comp-store sales rose 2%, including flat same-store results in the front end and a 2.9% increase in the pharmacy. Rite Aid said comparable pharmacy sales reflect a 163-basis-point negative impact from generic drug introductions, and the number of prescriptions filled in comparable stores edged up 0.5% versus a year ago.

The 2012 third-quarter net loss fell to $52 million, or 6 cents per diluted share, from a loss of $79.1 million, or 9 cents per diluted share, in the prior-year period. Analysts had forecast, on average, a loss of 11 cents per share for the quarter, according to Thomson Reuters.

Rite Aid said the smaller net loss stemmed from an increase in gross profit along with declines in depreciation and amortization, lease termination and impairment charges, interest expenses and lower deferred revenue related to its customer loyalty program. That was partially offset by an increase in operating expenses and LIFO charges, the company added.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the third quarter came in at $221.5 million, or 3.5% of revenue, up from $212.5 million, or 3.4% of revenue, a year earlier.

"We remain pleased with the continued improvement in our top-line results, highlighted by same-store sales and adjusted EBITDA increases for the fourth consecutive quarter," Rite Aid president and chief executive officer John Standley said in a statement. "Our pharmacy sales growth was strong this quarter, with key drivers being our well-planned and executed flu immunization program and continued favorable customer response to our wellness+ loyalty program."

Standley noted that Rite Aid has seen much more flu shot activity compared with a year ago.

"With respect to our flu immunization program, through the entire team's efforts, our more than 11,000 chainwide immunizing pharmacists have already provided more than double the number of flu shots we did last year and are on pace to achieve our goal of administering 1.5 million immunizations for this season," he stated. "Additionally, we now have more than 47 million enrolled members in our wellness+ program, and we will continue to enhance its value to members with even stronger, more compelling offerings in the new year."

Rite Aid relocated two drug stores, remodeled 119 locations to its "wellness store" format and closed 18 stores in the third quarter. As of Nov. 26, the retailer operated 4,679 drug stores.

Looking ahead to the full year, Rite Aid updated its fiscal 2012 guidance, pruning the top end of its revenue and same-store sales forecasts but also lifting the bottom end of the comp-store outlook. The company now projects overall sales of $25.85 billion to $26 billion and a same-store sales gain of 1.15% to 1.75% for the year.

Rite Aid also narrowed its projected net loss for fiscal 2012 to between $325 million and $440 million, a loss per diluted share of 37 cents to 50 cents, compared with its earlier estimate of a net loss of $345 million to $495 million, or 40 cents to 56 cents per diluted share. Adjusted EBITDA is pegged at $865 million to $910 million, up from the previous forecast of $825 million to $900 million.

For fiscal 2012, the consensus estimate of analysts polled by Thomson Reuters is for Rite Aid to post a net loss of 43 cents per share, with the forecast ranging from a low of a net loss of 51 cents to a high of a net loss of 36 cents.