Drugstore chain retailer
Rite Aid Corporation
) same-store sales (comps) reported an increase of 0.5% for the
four-week period ended July 28, 2012. The improvement was driven by
positive front-end, pharmacy and prescription count comps for the
Front-end same-store sales for July 2012 marginally increased
1.2%, while pharmacy comps inched up 0.2%. Prescription count at
comparable stores witnessed an upside of 4.5%. Pharmacy comps for
July included a negative impact of around 742 basis points from new
Rite Aid reported total drugstore sales of $1.881 billion in the
month under review, with prescription sales accounting for 67.5% of
drugstore sales and third-party prescription sales making up for
96.4% of pharmacy sales. The company's July sales represented a
0.1% dip from the year-ago level of $1.883 billion.
For the 21-week period ended July 28, 2012, Rite Aid registered
a comps increase of 1.5%. Comps for the period comprised a 2% rise
in front-end comps and a 1.2% hike in pharmacy comps. Prescription
count at comparable stores grew 3.2% during the period.
Total drugstore sales of $10.247 billion for the 21-week period
reflected a 0.8% increase from $10.167 billion reported in the
year-ago period. Sales for the 21-week period included a 68.1%
contribution from prescription sales with third-party prescription
sales making up for 96.6% of pharmacy sales.
In an effort to expand its pharmacy and clinical services, Rite
Aid has applied additional resources, such as the Wellness+ program
for diabetes and Flu Immunization. We believe such programs will
enable the company to increase its customer base as well as
Moreover, the company is taking various cost-cutting
initiatives, such as centralized indirect procurement of drugs,
managing administrative headcounts, reducing supply chain costs,
reducing debt, etc., which should help improve the bottom line.
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 July 28, 2012, the
company operated 4,646 stores as compared with 4,702 stores in the
same period last year.
Rite Aid competes with
CVS Caremark Corporation
). Currently, the company has a Zacks #3 Rank, implying a
short-term Hold rating. Moreover, we are maintaining a long-term
Neutral recommendation on the stock.
CVS CAREMARK CP (CVS): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis Report
WALGREEN CO (WAG): Free Stock Analysis Report
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