Drugstore chain
Rite Aid Corporation
(
RAD
) posted a 3.6% increase in same-store sales (comps) for the month
of March, based on strong front-end, pharmacy and prescription
count comps for the month. Front-end same-store sales for the
four-week period ended March 31, 2012, increased 4.6%, while
pharmacy and prescription count comps were up 3.2% and 2.6%,
respectively.
Pharmacy comps for March included a negative impact of around
240 basis points from new generic introductions.
Rite Aid recorded total drugstore sales of $1.989 billion in
March, with prescription sales accounting for 69.2% of drugstore
sales and third party prescription sales making up for 96.7% of
pharmacy sales. The company's March sales represented a 3% rise
from the year-ago level of $1.930 billion.
Fiscal 2011 sales, a snapshot
During fiscal 2011, the company registered a year-over-year
growth of 1.5% in total drugstore sales to $26.019 billion from
$25.633 billion recorded in fiscal 2010. The increase in total
sales was primarily driven by a 2% growth in total comparable
sales, comprising 1.1%, 2.4% and 0.9% rise in same-store sales at
front-end, pharmacy and prescription counts, respectively.
Our Take
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
long-term profitability.
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 March 31, 2012, the company
operated 4,659 stores versus 4,711 stores in the same period last
year.
Rite Aid, which competes with
CVS Caremark Corporation
(
CVS
) and
Walgreen Co
. (
WAG
), currently, holds a Zacks #3 Rank, implying a short-term 'Hold'
rating on the stock. The company retains a long-term 'Neutral'
recommendation on the stock.
CVS CAREMARK CP (
CVS
): Free Stock Analysis Report
RITE AID CORP (
RAD
): Free Stock Analysis Report
WALGREEN CO (
WAG
): Free Stock Analysis Report
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