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Drugstore chain retailer, Rite Aid Corporation’s (RAD - Analyst Report) comparable-store sales (comps) for the month of November (5 weeks ended Nov 30, 2013) rose 2.8% from the prior-year period, primarily driven by higher comps at its front-end and pharmacy stores.

Pharmacy comps for November were up 3.9%, which included a negative impact of nearly 81 basis points from generic drug introduction. Further, the company witnessed a 0.1% rise in prescription count at comparable stores. The company’s front-end comps depicted a marginal increase of 0.4%.

The company believes that the year-ago comparable period’s results benefited from the cyclic impact of Superstorm Sandy, which had a positive impact of 0.4% on front-end comps and 1.6% in prescription count at comparable stores.

Rite Aid’s total drugstore sales for the month was $2.434 billion, up 1.6% from the year-ago figure of $2.396 billion. Prescription sales constituted 68.1% of total drugstore sales. Third-party prescription sales accounted for 97.1% of pharmacy sales.

For the 13-week period ended Nov 30, comps improved 2.3% year over year resulting from a 3.5% rise at pharmacy comps, partially offset by a 0.2% drop at front-end comps. Further, the company witnessed a 0.7% rise in prescription count at comparable stores.

Rite Aid reported total drugstore sales of $6.330 billion for the quarter, up 1.9% from the year-ago figure of $6.213 billion. Prescription sales constituted 68.6% of total drugstore sales. Third-party prescription sales accounted for 97.1% of pharmacy sales.

For the 39-week period ended Nov 30, Rite Aid’s comps inched up 0.3% from the prior-year period. The increase was primarily due to a 0.4% rise in pharmacy comps. Front-end comps remained flat year over year. The company witnessed a 0.2% rise in prescription count at comparable stores during the period.

The company’s total drugstore sales in the 39-week period dropped 0.1% to $18.844 billion from $18.859 billion in the year-ago comparable period. Prescription sales comprised 68.0% of total drugstore sales. Additionally, third-party prescription sales constituted 97.0% of pharmacy sales.

Rite Aid, which trails Walgreen Co. (WAG - Analyst Report) and CVS Caremark Corp. (CVS - Analyst Report) in terms of store count, has witnessed a persistent downward sales trend over several quarters due to the introduction of lower cost generic (non-brand) drugs. Such non-branded drugs are less expensive in the market but generate higher gross margins for the company.

This is evident from Rite Aid’s performance in the first two quarters of fiscal 2014, when generic medication primarily drove its margin expansion. Going forward, this Zacks Rank #3 (Hold) stock is likely to focus on expanding its portfolio of generic medication, given the rising demand for such drugs.

However, Rite Aid’s generic drug sales could be dented by Wal-Mart Stores Inc.’s (WMT - Analyst Report) entry into the retail generic drug market. Due to Wal-Mart’s wide array of manufacturers in India, Israel and the U.S., the mass merchant can offer the particular drugs at a more discounted price when compared to other drugstore chain retailers.

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