Back to top

Analyst Blog

Drugstore chain retailer, Rite Aid Corporation (RAD - Analyst Report) saw the highest improvement in its monthly comparable store sales (comps) in about a decade with comps for the four weeks ended Apr 26, 2014 increasing 5.0%. This marked a significant turnaround in the company’s performance since the start of 2014.

Buoyed by the spectacular comps performance, shares of Rite Aid moved up 5.48% on the index during yesterday’s trade. Shares of the nation’s third largest drugstore chain, following Walgreen Co. (WAG - Analyst Report) and CVS Caremark Corp. (CVS - Analyst Report), touched a 52-week and multi-year high of $7.90 during the day’s trade before closing at $7.70. This represented the stock’s most spectacular run on the index since 2001, when the stock last hit the 52-week high mark. Moreover, the stock has been a star performer amassing a massive return of 197.3% in one year’s time and about 52.8% year-to-date.

Rite Aid, which also competes with Herbalife Ltd. (HLF - Snapshot Report), attributed the growth in comps for April to a rise in front-end and pharmacy comps as well as an improvement in prescription count at comparable stores.

Front-end comps for the month reflected 4.7% growth that came primarily on the back of strong Easter-related sales during the month as Easter moved into April this year versus March last year. Of the total comps growth at front-end stores, the company accredited 4.6% to Easter related sales.

Pharmacy comps for April were up 5.2%, which included a negative impact of nearly 138 basis points from generic drug introduction. Moreover, the company witnessed a 2.3% increase in prescription count at comparable stores.

Rite Aid’s total drugstore sales for the month stood at $1.995 billion, up 4.9% from the year-ago figure of $1.902 billion. Prescription sales constituted 67.9% of the total drugstore sales while third-party prescription sales accounted for 97.4% of pharmacy sales.

On a year-to-date basis (8-weeks ended Apr 26), Rite Aid’s comps grew 2.9% primarily due to 4.3% rise in pharmacy comps, while front-end comps declined 0.2%. The company also gained from a 1.7% rise in prescription counts for the period.

Total drugstore sales for the period grew 2.6% to $3,941 billion against $3,841 billion in the year-ago comparable period. Prescription sales constituted 68.7% of total drugstore sales. Third-party prescription sales accounted for 97.4% of pharmacy sales.

Looking ahead, the company’s sustained focus on expanding pharmacy and clinical services through its Wellness+ customer loyalty program and remodeling of wellness stores raise our hopes. We believe that such measures will enable the company to broaden its customer base and boost top- and bottom-line performance.

Rite Aid currently has a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CHINA BIOLO… CBPO 56.96 +2.50%
AROTECH COR… ARTX 3.74 +1.77%
BANCO DO BR… BDORY 14.18 +1.65%
GTT COMMUNI… GTT 12.18 +1.58%
CHYRONHEGO… CHYR 2.59 +1.57%