Rite Aid Reports Narrower Loss and Lower Revenue
Jun 23rd 2010 7:50AM
Updated Jun 23rd 2010 8:41AM
Rite Aid (RAD) posted Wednesday morning a narrower loss of $73.7 million, or 9 cents per share, in its fiscal first quarter ended May 29. This compared to last year's first quarter net loss of $98.4 million, or 11 cents per share. The narrower loss was the result of a decrease in selling, general and administrative expenses and lower charges related to store closings. Analysts had expected a loss of 14 cents per share. RAD shares jumped over 10% in premarket trading.
But the company's revenue declined 2.1% to $6.4 billion from $6.5 billion as a result of store closings and a decline in same-store sales. Revenue matched analyst estimates. Adjusted EBITDA was $249.8 million, or 3.9% of revenues, slightly higher than last year. While results also benefited from a decrease in SG&A expenses, they were partially offset by a decline in sales and gross margin.
Same-store sales for the quarter decreased 1%, with the number of prescriptions filled in same stores decreasing 1.7% over the same period last year. Prescription sales accounted for 68.3% of total drugstore sales.
Looking ahead, Rite Aid confirmed fiscal 2011 guidance, with sales expected to be between $25.2 billion and $25.6 billion, same-store sales to range from a decrease of 1.0% to an increase of 1.0% over fiscal 2010, and adjusted EBITDA to be between $875 million and $975 million. Net loss is expected to be between $355 million and $570 million or a loss per diluted share of 41 cents to 65 cents.
"We accomplished a lot in the first quarter. Our team continued to improve operational efficiency to help offset the challenging economic and competitive environment impacting sales and margin," said Mary Sammons, Rite Aid Chairman and CEO.
John Standley, Rite Aid president and chief operating officer, who is also set to become the company's president and CEO added, "During the quarter, we made excellent progress on our initiatives. We nationally launched our new wellness + customer loyalty program, began immunization training that will more than triple the number of Rite Aid pharmacists able to provide vaccinations and introduced the first products in our revamped private brand program into the stores."