Last week, drugstore chain retailer,
Rite Aid Corporation
) 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
Further, the nation's third largest drugstore chain in terms of
store count following Walgreen Co. (
) and CVS Caremark Corp. (
), 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
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. (
) 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
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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