Rite Aid Corp. (NYSE: RAD), the third-largest drugstore chain, is scheduled to release financial results for the fiscal fourth quarter 2009 before the opening bell on Thursday, April 1, 2010. Analysts, on average, expect the company to report a loss of 19 cents per share on revenue of $6.49 billion. In the year ago quarter, the company posted a loss of 14 cents per share on revenue of $6.71 billion.Rite Aid Corporation, through its subsidiaries, operates retail drugstores. Its drugstores primarily provide pharmacy services. The company sells prescription drugs and front-end products. The drug retailer has lost money in each quarter since its June 2007 acquisition of Brooks & Eckerd as it is still struggling with integration issues. So far, total losses have amounted to more than $4.3 billion amid massive write-downs.
In the preceding third quarter, the Camp Hill, Pennsylvania-based company reported narrower net loss of $86.1 million or $0.10 per share, compared to a loss of $248.7 million or $0.30 per share, in the prior-year quarter. Quarterly revenues totaled $6.35 billion, down 1.8% from the previous year's revenue of $6.47 billion. Analysts, on average, expected the company to post a loss of $0.18 per share on revenue of $6.47 billion.
For fiscal year 2010, the company expects to report net loss between $413 million and $542 million, or $0.50 and $0.66 per share. Previously, the company had expected full-year net loss in the range of $390 million to $615 million or $0.48 to $0.74 per share.
The company has reported decrease in same-store sales during the each month of the quarter. Early this month, Rite Aid Corp. announced an eighth straight monthly decline in same store sales. Rite Aid Corp. said its same store sales for the five weeks ended February 27, 2010, decreased 3.2% over the prior-year period. Same store sales for the 13-week quarter ended February 27, 2010 declined 2.4% over the prior-year period. Total drugstore sales for the quarter decreased 3.7% to $6.438 billion compared to $6.683 billion in the previous year period. Similarly, for the four weeks ended January 23, 2010, same store sales decreased 2.1% over the prior-year period. Same store sales decreased 1.8% in the four weeks ended December 26, 2009, compared to the prior-year period.
The company has been closing stores and cutting debt in response to poor corporate performance, but these moves haven't proved fruitful so far. Rite Aid's trouble has been compounded by intense competition from its larger rivals, Walgreen (NYSE: WAG) and CVS (NYSE: CVS), as they continue to add stores to their chains. Rite Aid's name has often turned up in various bankruptcy risk list. The turnaround still remains elusive and the company has been struggling to integrate Brooks & Eckerd. Since the Eckerd acquisition in June 2007, Rite Aid has closed more than 400 stores, laid off more than 10% of the workforce, and has restructured its debt. It has closed more than 115 stores in the past year, reduced inventories, brought in new senior managers and. During the third quarter, the company opened 3 stores, relocated 13 stores, remodeled 3 stores and closed 14 stores. Stores in operation at the end of the third quarter totaled 4,801. As of February 27, 2010; the company operated 4,780 stores compared to 4,901 stores in the like period a year ago.
The retailer is now hoping that a change in leadership will help reverse its fortunes. Current COO John T. Standley will replace CEO Mary Sammons, who has led the company since 2003, effective June 24th.
Rite Aid is also being seen as a potential takeover target. According to industry experts, Wal-Mart Stores Inc., CVS Caremark Corp. and Walgreen may be interested in Rite Aid’s stores.
Among other developments during the quarter, Rite Aid Corp. in February announced that it will expand its own exclusive Rx Suncare line with two new products - Rx Suncare Sport SPF 70 and Rx Suncare HairGuard. The company has priced all Rite Aid Rx Suncare products under $10.
In terms of stock performance, Rite Aid shares are up 528% over the past year.
Full Disclosure: None.
