Rite Aid Corporation
) reported a decline of 1% in same-store sales (comps) for the
four-week period ended June 30, 2012. The weak comps result were
mainly due to decreased pharmacy same store sales, partially offset
by improved prescription counts at comparable stores and front-end
same store sales.
Pharmacy comps for June 2012 inched down 1.6% including a
negative impact of around 672 basis points from new generic
introductions. However, front-end same-store sales for the month
inched up 0.3%, while prescription count at comparable stores
witnessed an upside of 2.9%.
Rite Aid reported total drugstore sales of $1.924 billion in
June, with prescription sales accounting for 67.4% of drugstore
sales and third-party prescription sales making up for 96.6% of
pharmacy sales. The company's June sales represented a 1.6% decline
from the year-ago level of $1.955 billion.
For the 17-week period ended June 30, 2012, Rite Aid registered
a comps increase of 1.7%. Comps for the period comprised 2.1% rise
in front-end comps and 1.4% increase in pharmacy comps.
Prescription count at comparable stores spiked 3.0% for the
Total drugstore sales of $8.365 billion for the 17-week period
reflected a 1% increase from $8.284 billion reported in the
year-ago period. Sales for the 17-week period included a 68.2%
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 Wellness+ program for
diabetes and Flu Immunization program. We believe these programs
will enable the company to increase its customer base as well as
Moreover, the company is in the process of various cost-cutting
initiatives including centralized indirect procurement of drugs,
administrative headcounts requirement, reducing supply chain costs,
reducing debt, etc., which will certainly benefit the company to
improve its bottom line.
Headquartered in Camp Hill, Pennsylvania, Rite Aid is the third
largest retail drugstore in the U.S. based on revenues and number
of stores. The company operates in 31 states across the country and
in the District of Columbia. As of June 30, 2012, the company
operated 4,648 stores versus 4,703 stores in the same period last
Rite Aid competes with
CVS Caremark Corporation
). Currently, the company has a Zacks #3 Rank, implying a
short-term Hold rating on the stock. We are maintaining our
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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