Rite Aid's (RAD) Key Sales Metrics for July Improved 4.6% - Analyst Blog


Last week, drugstore chain retailer, Rite Aid Corporation ( RAD ) came up with robust sales results for the month of July.

Rite Aid's comparable store sales (comps) for the four weeks ended Jul 26, 2014 rose 4.6%. The improvement reflected an increase in front-end and pharmacy comps as well as higher prescription count at comparable stores.

Pharmacy comps for July were up 6%, which included a negative impact of nearly 203 basis points from generic drug introduction. Front-end comps improved 1.5%, while prescription count at comparable stores rose 3.9%.

Rite Aid's total drugstore sales for the month stood at $1.975 billion, up 4.1% from the year-ago figure of $1.898 billion. Prescription sales constituted 68.6% of the total drugstore sales while third-party prescription sales accounted for 97.5% of pharmacy sales.

Further, the nation's third largest drugstore chain in terms of store count following Walgreen Co. ( WAG ) and CVS Caremark Corp. ( CVS ), reported a 3.5% rise in comps for the year-to-date period (21-weeks ended Jul 26, 2014). The increase was driven by 5% growth in pharmacy comps, 0.5% increase in front-end comps and 2.8% rise in prescription count at comparable stores.

Total drugstore sales for the year-to-date period improved 3% to $10.395 billion against $10.089 billion in the year-ago comparable period. Prescription sales constituted 68.4% of total drugstore sales. Third-party prescription sales accounted for 97.5% of pharmacy sales.

Comparing the July sales metrics with June, we noticed that the company has witnessed a remarkable improvement in every area. In June, Rite Aid had reported a 3.9% rise in total comps which comprised of an increase of 0.9% and 5.4% at front-end and pharmacy comps, respectively. Prescription counts at comparable stores were 3.5% higher from the previous-year period.

Though Rite Aid's July sales results were strong, the pace of this Herbalife Ltd. ( HLF ) competitor remains low based on the dismal first-quarter fiscal 2015 results and a previously lowered fiscal 2015 earnings and EBITDA forecast. The lowered guidance reflects anticipated reductions in generic drugs purchase price for the rest of the year.

The company expects fiscal 2015 earnings per share to be in the range of 30-40 cents as against the earlier forecast of 31-42 cents. Adjusted EBITDA for fiscal 2015 is expected to range from $1.275-$1.350 billion compared with $1.325-$1.4 billion guided earlier. Rite Aid currently has a Zacks Rank #4 (Sell).

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RITE AID CORP (RAD): Free Stock Analysis Report

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HERBALIFE LTD (HLF): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: RAD , CVS , WAG , HLF



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