Rite Aid Same-Store Sales Rise in February, 4th Quarter

   By Tess Stynes 
 

Rite Aid Corp. (RAD) said its same-store sales rose 1.5% in February from a year earlier as generic drug introductions and a decline in flu-related over-the-counter and prescription medicines weighed on growth.

Rite Aid, the No. 3 U.S. drugstore chain by sales behind Walgreen Co. (WAG) and CVS Caremark Corp. (CVS), has posted a string of quarterly profits in a turnaround following years of losses. The company's loyalty program has bolstered its sales and Rite Aid also has worked to improve its balance sheet.

Still, Rite Aid and its competitors have faced revenue pressure lately due to a wave of new generic drugs. Though generic drugs carry higher margins than branded ones, they can hurt sales because they command lower prices.

During February, Rite Aid's pharmacy same-store sales increased 3.1%, including a negative impact of 1.38 percentage points from generic drug introductions. Same-store prescriptions decreased 1.4%, with the vast majority of the decline owing to fewer flu-related prescriptions.

Same-store sales at the front end, where items such as toiletries and food are sold, fell 1.8%, partly thanks to weaker sales of flu-related over-the-counter products.

Total drugstore sales rose 2.4% to $2.52 billion.

For its fiscal fourth quarter ended March 1, Rite Aid reported that same-store sales rose 2.1%, including a decline of 0.7% in the front of the store and a 3.5% increase in the pharmacy section. Same-store prescription counts fell 1.8%.

Total drugstore sales increased 2.2% to $6.57 billion. Analysts polled by Thomson Reuters expected revenue of $6.5 billion.

On Wednesday, Walgreen reported that its same-store sales rose 4.5% in February from a year earlier, led by strong growth in the pharmacy section.

Write to Tess Stynes at [e-mail]

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