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Guidance for fiscal year cut by Rite Aid
June 16th, 2014
CAMP HILL, Pa. – Though same-store sales rose in May, Rite Aid Corp. lowered its fiscal 2015 forecast, citing factors affecting pharmacy margins.
For the five weeks ended May 31, comparable-store sales advanced 3.5% year over year. The gain continued Rite Aid’s comp-store sales growth trend this year.
In the front end, same-store sales edged up 0.5%. Comparable pharmacy sales rose 5%, reflecting a negative impact of 156 basis points from introductions of new generic drugs. The prescription count at comparable stores was up 3.2%.
Overall drug store sales for May were $2.484 billion, up 2.5% year over year. Prescription sales accounted for 68% of sales.
For the 13-week fiscal 2015 first quarter, same-store sales rose 3.1%. Prescriptions filled at comparable stores increased 2.3%. Total drug store sales climbed 2.6% to $6.425 billion.
While Rite Aid plans to release full first-quarter results on June 19, the retailer said it expects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to come in at $275 million to $285 million and net income at $35 million to $45 million, with earnings per diluted share of 4 cents.
“Based on pharmacy margin trends, particularly in May, the company expects its results for adjusted EBITDA to trail the results for the previous year’s first quarter due primarily to higher-than-expected drug costs resulting from a delay in realizing the level of expected generic purchase price reductions and a greater-than-expected reduction in reimbursement rates,” Rite Aid stated.
The company also lowered its fiscal 2015 outlook due to the revised first-quarter guidance and generic purchase price reductions expected for the rest of the year.
For fiscal 2015, Rite Aid now projects adjusted EBITDA of between $1.275 billion and $1.350 billion and net income of between $298 million and $408 million, or 30 cents to 40 cents per diluted share.
In previous guidance for fiscal 2015, Rite Aid forecast adjusted EBITDA of $1.325 billion to $1.4 billion and net income of $313 million to $423 million, or 31 cents to 42 cents per diluted share.