Rite Aid 3Q loss narrows as sales climb

Associated Press

Published: Thursday, Dec. 15 2011 6:20 a.m. MST

This Dec. 14, 2011 photo, shows a a Rite Aid sign at a store in Woodmere, Ohio. Drugstore operator Rite Aid Corp. said Thursday, Dec. 15, 2011, it took a bigger loss in the third quarter despite improved sales.

Amy Sancetta, Associated Press

Enlarge photo»

Rite Aid Corp.'s third quarter loss narrowed, as its pharmacies improved sales at stores open at least a year and the drugstore operator's customer loyalty program continued to grow.

The third-largest U.S. drugstore chain also again trimmed its projected loss for fiscal 2012.

Its shares rose 5 cents, or 4.4 percent, to $1.19 in premarket trading.

Rite Aid said Thursday it lost $54.5 million, or 6 cents per share, after paying preferred dividends in the quarter ended Nov. 26. That compares to a loss of $81.5 million, or 9 cents per share, a year ago.

Revenue climbed nearly 2 percent to $6.31 billion from $6.2 billion a year ago.

Analysts surveyed by FactSet expected, on average, a loss of 12 cents per share on $6.29 billion in revenue.

The Camp Hill, Pa., company said sales at stores open at least a year climbed 2 percent, as pharmacy sales increased 2.9 percent, while front-end sales were flat. That statistic is considered a key measure of retailer health because it leaves out results from stores that have opened or closed in the last year.

Rite Aid said it has already more than doubled the number of flu shots delivered last year and is on pace to administer 1.5 million immunizations this season.

Rite Aid's sales have improved in the last two quarters, but it has a string of quarterly losses dating back to 2007. The company is spending more money on store improvements and its Wellness Plus rewards program, which it launched in April 2010. Rite Aid says Wellness Plus membership surpassed 47 million people, up from 44 million three months earlier.

The company now expects a fiscal 2012 loss of between $325 million and $440 million, or 37 cents to 50 cents per share, on revenue ranging from $25.85 billion to $26 billion. Three months ago, Rite Aid cut its projected loss for the year to $345 million to $495 million, or 40 cents to 56 cents per share, with sales of $25.8 billion to $26.1 billion.

Analysts expect a loss of 44 cents per share on $25.79 billion in revenue

Rite Aid had 4,679 stores as of Nov. 26, down 62 from a year ago. The company has closed hundreds of stores in the last few years to cut costs and eliminate underperforming locations. Rite Aid's biggest competitors are CVS Caremark Corp. and Walgreen Co., which both have well over 7,000 stores.

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