Drugstore chain retailer,
Rite Aid Corporation
) reported a same-store sales (comps) increase of 0.4% for the
five-week period ended September 1, 2012. The improvement was
driven by positive front-end and prescription count comps for the
month, offset by decline in pharmacy comps.
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Front-end same-store sales for August registered a marginal
improvement of 2.4%, while pharmacy comps declined 0.6%.
Prescription count at comparable stores witnessed an upside of
4.5%. Pharmacy comps for August included a negative impact of
around 819 basis points from new generic introductions.
Rite Aid reported total drugstore sales of $2.406 billion in
August, with prescription sales accounting for 67.6% of drugstore
sales and third-party prescription sales making up for 96.4% of
pharmacy sales. The company's August sales represent a 0.3% dip
from the year-ago level of $2.414 billion.
For the fiscal second quarter ended September 1, 2012, Rite Aid's
comps remain flat compared to last year, with front-end comps
increasing 1.4%, offset by a 0.7% decline in pharmacy comps.
Prescription count at comparable stores grew 4.0% during the
Total drugstore sales for the quarter came in at $6.208 billion,
sliding down 0.7% from $6.251 billion in the prior-year quarter.
Quarterly sales included a 67.5% contribution from prescription
sales, while third-party prescription sales accounted for 96.5% of
Year-to-date, the company's comps grew 1.2%, while net sales rose
0.5% year over year to $12.646 billion. The upside in comps mainly
came from a 2.0% rise in front-end comps, 0.8% jump in pharmacy
comps and a 3.5% increase in prescription count at comparable
stores. Total sales for the period comprised of 68.0% from
prescription sales. Additionally, third party prescription sales
represented 96.6% of pharmacy sales.
Headquartered in Camp Hill, Pennsylvania, Rite Aid is the
third-largest retail drugstore in the U.S. on the basis of revenues
and number of stores. The company operates in 31 states across the
country and in the District of Columbia. As of September 1, 2012,
the company operated 4,643 stores as compared with 4,697 stores in
the same period last year.
Rite Aid, which competes with
CVS Caremark Corporation
), currently, has a Zacks #3 Rank, implying a short-term Hold
rating. Moreover, we are maintaining a long-term Neutral
recommendation on the stock.