Drugstore chain retailer,
Rite Aid Corporation
) saw the highest improvement in its monthly comparable store
sales (comps) in about a decade with comps for the four weeks
ended Apr 26, 2014 increasing 5.0%. This marked a significant
turnaround in the company's performance since the start of 2014.
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Buoyed by the spectacular comps performance, shares of Rite Aid
moved up 5.48% on the index during yesterday's trade. Shares of
the nation's third largest drugstore chain, following
CVS Caremark Corp.
), touched a 52-week and multi-year high of $7.90 during the
day's trade before closing at $7.70. This represented the stock's
most spectacular run on the index since 2001, when the stock last
hit the 52-week high mark. Moreover, the stock has been a star
performer amassing a massive return of 197.3% in one year's time
and about 52.8% year-to-date.
Rite Aid, which also competes with
), attributed the growth in comps for April to a rise in
front-end and pharmacy comps as well as an improvement in
prescription count at comparable stores.
Front-end comps for the month reflected 4.7% growth that came
primarily on the back of strong Easter-related sales during the
month as Easter moved into April this year versus March last
year. Of the total comps growth at front-end stores, the company
accredited 4.6% to Easter related sales.
Pharmacy comps for April were up 5.2%, which included a negative
impact of nearly 138 basis points from generic drug introduction.
Moreover, the company witnessed a 2.3% increase in prescription
count at comparable stores.
Rite Aid's total drugstore sales for the month stood at $1.995
billion, up 4.9% from the year-ago figure of $1.902 billion.
Prescription sales constituted 67.9% of the total drugstore sales
while third-party prescription sales accounted for 97.4% of
On a year-to-date basis (8-weeks ended Apr 26), Rite Aid's comps
grew 2.9% primarily due to 4.3% rise in pharmacy comps, while
front-end comps declined 0.2%. The company also gained from a
1.7% rise in prescription counts for the period.
Total drugstore sales for the period grew 2.6% to $3,941 billion
against $3,841 billion in the year-ago comparable period.
Prescription sales constituted 68.7% of total drugstore sales.
Third-party prescription sales accounted for 97.4% of pharmacy
Looking ahead, the company's sustained focus on expanding
pharmacy and clinical services through its Wellness+ customer
loyalty program and remodeling of wellness stores raise our
hopes. We believe that such measures will enable the company to
broaden its customer base and boost top- and bottom-line
Rite Aid currently has a Zacks Rank #1 (Strong Buy).