Tags: US | Earns | Rite | Aid

Rite Aid Loss, Forecast Worse Than Expected

Wednesday, 31 Mar 2010 09:47 AM

Rite Aid posted a worse-than-expected quarterly loss due to a mild winter cold and flu season and forecast a wider fiscal year loss than Wall Street was anticipating, sending shares down 12.7 percent.

The results marked the No. 3 U.S. drugstore chain's 11th straight quarterly loss and were hurt by a 1.7 percent drop in the number of prescriptions filled at stores open at least a year. Prescription sales made up two-thirds of total drugstore sales.

"It was a difficult quarter with continued weak consumer demand, a weaker cough, cold and flu season than last year, and continued pressure on pharmacy reimbursement," Chief Executive Mary Sammons said in a statement.

Rite Aid posted a loss of $208.4 million, or 24 cents per shares, in the fourth quarter ended on Feb. 27 from a loss of $2.29 billion, or $2.67 per share, a year earlier.

Analysts on average had forecast a loss of 19 cents a share, according to Thomson Reuters.

Sales fell 3.6 percent to $6.46 billion.

Sales at stores open at least a year fell 2.4 percent, the company said in early March. Same-store sales of general merchandise sold dropped 2.6 percent while pharmacy same-store sales fell 2.4 percent.

The new fiscal year showed some moderation in that decline, with same-store sales falling by 0.1 percent in March. Rite Aid forecast same-store sales would range from a decline of 1 percent to an increase of 1 percent in its fiscal 2011.

The drugstore chain said it expects the economy to remain weak with high unemployment and forecast a fiscal 2011 loss per share of between 41 cents and 65 cents, while analysts expect a loss of 36 cents.

Rite Aid has had a hard time boosting sales at the Brooks and Eckerd stores it bought from Canada's Jean Coutu in 2007. The acquisition, which saddled Rite Aid with debt, came just before the recession hit and shoppers cut back.

Rite Aid has refinanced debt, trimmed expenses and taken other steps to improve its position, but has yet to show a major turnaround as shoppers cut back on discretionary purchases.

Shares were down about 19 cents at around $1.50 before the bell on Tuesday. They closed at $1.69 on Monday on the New York Stock Exchange.

© 2015 Thomson/Reuters. All rights reserved.

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