Rite Aid Rallies After Reporting Q1 Earnings
Retail drugstore chain Rite Aid (NYSE: RAD) reported first quarter earnings Thursday.
Rite Aid reported an EPS of $-0.03, in line with the street's profit estimates. This a $0.04 increase compared to the year ago EPS of $-0.07. Rite Aid's Q1 revenues were $6.47 billion compared to estimates of $6.43 billion. The company's revenues grew by 1.2% from the first quarter of 2011.
Chairman, President and CEO of Rite Aid, John Standley, stated, “Our turnaround efforts continue to be successful as demonstrated by our sixth consecutive quarter of increased same store sales and Adjusted EBITDA.”
Rite Aid's revenue and earnings growth were fueled by the 2.5% increase in its year-over-year same store sales. The company's front end sales grew by 2.7% and pharmacy sales by 2.4%. In spite of the sales growth, Rite Aid did not open any new stores in the first quarter. Rather, the company closed 15 stores, making its total store count 423. This may be seen as a negative indicator regarding the company's future sales growth.
CEO Standley commented on the sales growth: “During the quarter, we saw strong growth in same-store prescription counts while key initiatives like our popular wellness+ customer loyalty program, enhanced Rite Aid brand offerings and ground-breaking Wellness store format continued to gain traction. We're proud of the hard work and dedication that our entire Rite Aid team has displayed in driving these positive results and look forward to delivering an even better shopping experience to our customers as we move ahead.”
Rite Aid also updated its FY 2013 guidance. The company now expects annual revenues of $25.3-25.7 billion versus the estimates of $25.53 billion and same store sales to be between -0.5% and 1.0% over FY 2012. Rite Aid cites the impact of new generic drug introductions as the catalyst for lowers sales numbers.
Additionally, Rite Aid raised the lower end of its Adjusted EBITDA guidance to $950 million-1.025 billion. It also expects the 2013 net loss to be between $103 million and $248 million resulting in the EPS loss of $0.13 to $0.29. Lastly, Rite Aid is forecasting capital expenditures of approximately $300 million.
The strong quarterly sales gave the shares of Rite Aid a nice boost and the stock is up over 7% on Thursday's trading session. On the year, the stock is up approximately 2%, but it is down 40% from the March highs of $2.12.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.