Retail News Breaks
Rite Aid narrows first quarter loss
June 21st, 2012
CAMP HILL, Pa. – Rite Aid Corp. surprised Wall Street with a smaller loss and stronger-than-expected sales during the first quarter of fiscal 2013.
The drug chain posted a net loss of $28.1 million, or 3 cents per diluted share, compared with red ink totaling $63.1 million, or 7 cents per diluted share, in the prior-year quarter. Analysts on average were expecting a loss of 4 cents per share, according to Thomson Reuters.
The most recent loss included $17.8 million, or 2 cents per share, for debt modification related to the successful completion of the company’s debt refinancing, as well as $20.9 million, or 2 cents per share, for the proposed settlement of a series of wage and hour class-action lawsuits.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 4.3% to $274.2 million, or 4.24% of sales, from $262.9 million, or 4.11% of sales, a year ago.
Sales rose 1.2% to $6.47 billion, ahead of analysts’ projected total of $6.42 billion. Same-store sales grew 2.5%, driven by a 2.7% increase in front-end sales and 2.4% gain in pharmacy sales, which absorbed a negative impact from new generic introductions of approximately 326 basis points.
Pharmacy sales reflect a 3% rise in the number of prescriptions filled, which benefited from the dispute between Walgreen Co. and Express Scripts Inc. Prescription sales made up 68.4% of total sales.
"Our turnaround efforts continue to be successful, as demonstrated by our sixth consecutive quarter of increased same-store sales and adjusted EBITDA," chairman, president and chief executive officer John Standley said in a statement. "During the quarter we saw strong growth in same-store prescription counts, while key initiatives like our popular wellness+ customer loyalty program, enhanced Rite Aid brand offerings and groundbreaking Wellness store format continued to gain traction."
Management lowered its sales forecast for the full fiscal year to between $25.3 billion and $25.7 billion, with same-store sales expected to range from a 0.5% decrease to an increase of 1%. The revised ranges incorporate a projected negative impact on pharmacy same-store sales of 520 to 600 basis points. However, Rite Aid has raised the lower end of its projection for adjusted EBITDA to a range of $950 million to $1.025 billion. The full-year net loss is estimated at $103 million to $248 million, or 13 cents to 29 cents per diluted share.
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