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Rite Aid Expecting More Losses Despite Sales Gains

Thursday, 07 Apr 2011 11:45 AM

Rite Aid Corp.'s sales rose over the most recent quarter, supported by a late flu season, but the company Thursday forecast another loss this fiscal year despite the expectation of additional sales gains.

Sales at its established drugstores were $6.46 billion, down slightly from a year ago as the chain has closed some weaker stores. Rite Aid reported a rare increase in sales at stores open at least a year, partly due to a 1 percent increase in general merchandise sales.

That contrasts with declines in recent quarters, as the drugstore chain has lost business to larger rivals Walgreen Co. and CVS Caremark.

Rite Aid said it expects sales at established drugstores to rise between 0.5 percent and 2 percent for the fiscal year that began in late February.

But it has not gotten off to a good start. March same-store sales slid 0.1 percent, compared with Walgreen's 3 percent rise.

Prescriptions make up two-thirds of Rite Aid's quarterly sales. Chief Executive John Standley said on a conference call that its prescriptions filled had become more profitable due to the introduction of more generic drugs and loyalty cards that have attracted more customers.

The third-largest U.S. drugstore operator reported a net loss of $205.7 million, or 24 cents per share, compared with a loss of $208.4 million, or 24 cents per share, for the same quarter a year ago, in line with analyst estimates, according to Thomson Reuters I/B/E/S.

Rite Aid expects a first full-year loss of between $370 million and $560 million, or 42 cents and 64 cents per share.

Raymond James analyst John Ransom said Rite-Aid's forecast "shows little to no growth in the business" and said a slow economy and lack of new generic drugs will continue to weigh on the chain.

Its shares rose 2.8 percent, or about 3 cents, to $1.09 in early trading.

© 2017 Thomson/Reuters. All rights reserved.

   
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Rite Aid Corp.'s sales rose over the most recent quarter, supported by a late flu season, but the company Thursday forecast another loss this fiscal year despite the expectation of additional sales gains. Sales at its established drugstores were $6.46 billion, down...
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Thursday, 07 Apr 2011 11:45 AM
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