Retail News Breaks Archives
Net loss decreases at Rite Aid in 1Q
June 23rd, 2011
CAMP HILL, Pa. – Rite Aid Corp. beat Wall Street's projection for its fiscal 2012 first quarter by turning in a smaller net loss on flat sales.
The drug store chain said Thursday that for the 13-week first quarter ended May 28 it recorded a net loss of $63.1 million, or 7 cents per diluted share, down from a net loss of $73.7 million, or 9 cents per diluted share, a year earlier. It was the third consecutive quarter that the company shrunk its net loss.
Analysts' average estimate for Rite Aid's 2012 first quarter was for a net loss of 12 cents per share, with their forecasts ranging from a low of a 16-cents-per-share loss to a high of a 6-cents-per-share loss, according to Thomson Financial.
Rite Aid noted that decreases in selling, general and administrative expenses (SG&A) and interest expenses contributed to the smaller net loss in the quarter. That was partially offset by a thinner front-end margin, which stemmed from investments in the wellness+ customer loyalty program and a loss on debt modification related to the refinancing of a $343 million term loan in March, the company said.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter came in at $262.9 million, up from $249.8 million in the prior-year period.
On the revenue side, Rite Aid posted total sales of $6.4 billion in the first quarter, flat versus a year ago. The retailer said revenue got a lift from a 0.8% gain in same-store sales, which were offset by store closings.
In the front end, same-store sales were flat in the quarter. Pharmacy same-store sales rose 1.1%, reflecting a 145-basis-point negative impact from generic drug introductions, according to Rite Aid. The number of prescriptions filled in same stores edged up 0.4% year over year.
"We are pleased with the continued improvement in our results. We increased adjusted EBITDA as we again grew same-store sales and further reduced operating costs," Rite Aid president and chief executive officer John Standley said in a statement. "Our sales initiatives continued to gain traction, with the number of members enrolled in our wellness+ customer loyalty program reaching nearly 40 million. Prescriptions filled in comparable stores increased as customers took advantage of our new pharmacy programs.
"We’re also excited about the new wellness store format we piloted during the quarter," Standley added. "These totally revamped stores offer expanded clinical services, hundreds of new products that support health and wellness and our unique, on-site Wellness Ambassadors. Even in these early stages, the customer response has been extremely positive." The chain currently has eight wellness stores in Pennsylvania, New Jersey and California.
During the first quarter, Rite Aid relocated six drug stores, remodeled three stores and closed 10 stores. The retailer said it operated 4,704 drug stores as of the quarter's end.
Also on Thursday, Rite Aid confirmed its fiscal 2012 guidance, forecasting sales of $25.7 billion to $26.1 billion, same-store sales growth of 0.5% to 2%, and a net loss of $370 million to $560 million (42 cents to 64 cents per diluted share).
Analysts project Rite Aid's fiscal 2012 sales at $25.65 billion and, on average, peg its net loss for the year at 53 cents per share, with the net loss estimates running from a low of 62 cents to a high of 39 cents, according to Thomson Financial.