Retail

Rite Aid Loss Narrower Than Expected

Rite Aid Corp. (NYSE: RAD) is seeing a warm reception after the troubled drug store chain managed to turn in a narrower loss in its quarterly report. The loss beat estimates by $0.03 per share, at a loss of $0.05 per share. Revenues were more or less in-line at $6.23 billion, versus the $6.21 billion consensus, even if those sales were down by 0.6%.

The company did actually lower its 2013 expectations and for comparable sales. Rite Aid said that its same-store sales for the quarter were flat over the prior year’s 13-week period. That report consists of a 1.4% increase in front-end sales, but those were offset by a 0.7% decrease in pharmacy sales. The earnings report said that the weak pharmacy sales included roughly a 750 basis point negative impact from new generic introductions, while prescriptions filled in same stores rose by 4.0%.

Prescription sales accounted for 67.5% of total drugstore sales, and third-party prescription revenue was 96.5% of pharmacy sales. One issue that has helped is that Rite Aid has grown to roughly 25 million members now.

Shares are up 2% to $1.34 so far this morning and the 52-week trading range is $0.85 to $2.12. Unfortunately, Rite Aid remains a troubled story that has not gone very well for most shareholders.

JON C. OGG

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