Rite Aid Corporation
) reported a same-store sales (comps) increase of 1.1% for the
five-week period ended June 2, 2012. The increase was driven by
strong front-end, pharmacy and prescription count comps for the
month. Front-end same-store sales for May 2012 increased 1.3%,
while pharmacy comps were up 1.0%. Prescription count at comparable
stores witnessed an upside of 2.6%.
Pharmacy comps for May included a negative impact of around 406
basis points from new generic introductions.
Rite Aid reported total drugstore sales of $2.454 billion in
May, with prescription sales accounting for 68.2% of drugstore
sales and third-party prescription sales making up for 96.6% of
pharmacy sales. The company's May sales represented a 0.3% rise
from the year-ago level of $2.446 billion.
For the 13-week period ended June 2, 2012, Rite Aid registered a
comps increase of 2.5%. Comps for the period comprised 2.7% rise in
front-end comps and 2.4% increase in pharmacy comps. Prescription
count at comparable stores spiked 3.0% for the quarter.
Total drugstore sales of $6.441 billion for the quarter
reflected a 1.8% increase from $6.329 billion reported in the
year-ago period. Sales for the 13-week period included a 68.4%
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 2, 2012, the company
operated 4,652 stores versus 4,704 stores in the same period last
Rite Aid, which competes with
CVS Caremark Corporation
), currently, holds a Zacks #2 Rank, implying a short-term Buy
rating on the stock. The company retains 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
To read this article on Zacks.com click here.