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Rite Aid Posts Robust June Comps: Stock Moves Higher
RAD CVS HLF
Drugstore chain retailer,
Rite Aid Corporation ( RAD - Analyst Report) came up with robust sales results for the month of June on Jul 3 and spurred a positive market reaction as the company’s shares soared 5.58% on the day.
Rite Aid’s comparable store sales (comps) for the four weeks ended Jun 28, 2014 rose 3.9%. The improvement reflected an increase in front-end and pharmacy comps as well as higher prescription count at comparable stores.
Pharmacy comps for June were up 5.4%, which included a negative impact of nearly 169 basis points from generic drug introduction. Front-end comps improved a marginal 0.9%, while prescription count at comparable stores rose 3.5%.
Rite Aid’s total drugstore sales for the month stood at $1.995 billion, up 3.5% from the year-ago figure of $1.927 billion. Prescription sales constituted 68.4% 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. and CVS Caremark Corp. ( CVS - Analyst Report) , reported a 3.3% rise in comps for the year-to-date period (17-weeks ended Jun 28, 2014). The increase was driven by 4.8% growth in pharmacy comps, 0.2% increase in front-end comps and 2.6% rise in prescription count at comparable stores.
Total drugstore sales for the year-to-date period improved 2.8% to $8.420 billion against $8.191 billion in the year-ago comparable period. Prescription sales constituted 68.4% of total drugstore sales. Third-party prescription sales accounted for 97.4% of pharmacy sales.
Though Rite Aid’s June sales results were strong, the pace of this Herbalife Ltd. ( HLF - Snapshot Report) 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).