Rite Aid’s (RAD) comps rise 3.9% in August & 4.1% in Q2

Drugstore chain retailer, Rite Aid Corporation (RAD) came up with robust sales results for the month of August. Rite Aid’s comparable-store sales (comps) for the five weeks ended Aug 30, 2014 rose 3.9%. The improvement reflected an increase in front-end and pharmacy comps as well as higher prescription count at comparable stores.

Pharmacy comps for August were up 5.2%, which included a negative impact of nearly 219 basis points from generic drug introduction. Front-end comps improved 1.1%, while prescription count at comparable stores rose 3.7%.

Rite Aid’s total drugstore sales for the month stood at $2.515 billion, up 3.7% from the year-ago figure of $2.425 billion. Prescription sales constituted 69.3% of total drugstore sales while, third-party prescription sales accounted for 97.5% of pharmacy sales.

Further, the nation’s third largest drugstore chain in terms of store count following Walgreen Co. (WAG) and CVS Caremark Corp. (CVS), reported a 4.1% rise in comps for the second quarter ended Aug 30, 2014. The increase was driven by 5.6% growth in pharmacy comps, 1.1% increase in front-end comps and 3.7% rise in prescription count at comparable stores.

Total drugstore sales for the quarter improved 3.7% to $6.485 billion as against $6.250 billion in the year-ago comparable period. Prescription sales constituted 68.8% of total drugstore sales. Third-party prescription sales accounted for 97.5% of pharmacy sales.

Year-to-date (26 weeks ended Aug 30, 2014), Rite Aid reported a 3.6% rise in comps. The increase was driven by 5.1% growth in pharmacy comps, 0.6% increase in front-end comps and 3.0% rise in prescription count at comparable stores.

Total drugstore sales for the year-to-date period improved 3.2% to $12.910 billion against $12.514 billion in the year-ago comparable period. Prescription sales constituted 68.6% of total drugstore sales. Third-party prescription sales accounted for 97.5% of pharmacy sales.

Though Rite Aid’s recent sales results were strong, this Zacks Rank #4 (Sell) company maintains its previously lowered fiscal 2015 earnings and EBITDA forecast based on the dismal first-quarter fiscal 2015 results. The lowered guidance reflects anticipated reductions in generic drugs purchase price for the rest of the year.

The company expects fiscal 2015 earnings per share to be in the range of 30–40 cents as against the earlier forecast of 31–42 cents. Adjusted EBITDA for fiscal 2015 is expected to range from $1.275–$1.350 billion compared with $1.325–$1.4 billion guided earlier.

This Herbalife Ltd. (HLF) competitor is expected to release second-quarter fiscal 2015 earnings on Sep 18, 2014. As of Aug 30, 2014, the company operated 4,572 stores compared with 4,604 stores in the year-ago period.
 
RITE AID CORP (RAD): Free Stock Analysis Report
CVS HEALTH CORP (CVS): Free Stock Analysis Report
WALGREEN CO (WAG): Free Stock Analysis Report
HERBALIFE LTD (HLF): Free Stock Analysis Report
 
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