Rite Aid Corp. (NYSE: RAD): Q4 Earnings Preview 2011

Rite Aid Corp. (NYSE: RAD), the third-largest drugstore chain, is scheduled to release fourth quarter earnings before the opening bell on Thursday, April 7, 2011. Analysts, on average, expect the company to report a loss of $0.24 per share on revenue of $6.38 billion. In the year ago quarter, the company posted a loss of $0.24 per share on revenue of $6.46 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. As of March 26, 2011, the company operated 4,711 stores compared to 4,777 stores a year ago. 

In the preceding third quarter, the Camp Hill, Pennsylvania-based company's net loss was 79.07 million or $0.09 per share, compared to a loss of $83.86 million or $0.10 per share in the prior-year quarter. Revenue dropped 2.4% to $6.20 billion from $6.35 billion in the same quarter last year. Analysts, on average, expected the company to post a loss of $0.13 per share on revenue of $6.20 billion. 

At its last earnings call in December, the company lowered its fiscal 2011 financial guidance. Rite Aid now expects net loss in a range of $525 million-$655 million or $0.60-$0.74 per share. Earlier, the company projected net loss in a range of $400 million-$590 million or $0.46-$0.67 per share. The company also reduced the higher end of its revenue forecast range for the year. The company now expects revenue for the full year in a range of $25.0 billion-$25.2 billion, compared to the prior range of $25.0 billion-$25.4 billion. te Aid now projects same store sales for fiscal 2011 to range from a decrease of 1.5%-0.9%. Earlier, the company forecast same store sales to range from a decrease of 1.5% to being flat. The company also lowered its outlook for capital expenditure for the year to $215 million from the prior forecast of $250 million.

Early in March, the company said that its fourth-quarter same store sales increased 0.9 percent over the prior-year period. Front-end same store sales increased 1.0 percent over the prior-year while pharmacy same store sales increased 0.8 percent. Prescriptions filled at comparable stores increased 0.8 percent over the prior-year period. Total drugstore sales for the 13-week fourth quarter decreased 0.1 percent to $6.432 billion compared to $6.438 billion in last year's like period. Prescription revenue represented 66.7 percent of total drugstore sales, and third party prescription revenue was 96.3 percent of pharmacy sales.

Rite Aid operates in a highly fragmented specialty retail sector. 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. Moreover, Wal-Mart's foray into the retail generic drug market is putting pressure on Rite Aid's pharmacy margin. Also, an increased debt burden and interest expenses due to the acquisition of Brooks Eckerd has limited the scope of additional finance..  

Rite-Aid continues to pay off debt and struggles to progress sales. In March, Rite Aid successfully refinanced the approximately $343 million Tranche 3 Term Loan due June 2014 under its senior secured credit facility with the proceeds of a new $343 million Tranche 5 Term Loan due March 2018 under its senior secured credit facility.

Last month, Rite Aid announced that it successfully regained compliance with the New York Stock Exchange. The New York Stock Exchange's rules require that a company's stock must trade at a minimum average closing price of more than a $1 over a consecutive 30-day trading period.

In terms of stock performance, Rite Aid shares have lost nearly 29% over the past year.

Full Disclosure: None.

Rite Aid Corp. (NYSE: RAD): Q4 Earnings Preview 2009

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.

Rite Aid Corp. (NYSE: RAD): Third Quarter Earnings Preview 2010

Rite Aid Corp. (NYSE: RAD), the third largest US retail drugstore chain, is scheduled to release financial results for the third quarter ended November 28, 2009 on Thursday, December 17, 2009. Analysts, on average, expect the company to report a loss of 18 cents on revenue of $6.38 billion. In the year ago quarter, the company reported loss of 30 cents per share on revenue of $6.47 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. As of November 28, 2009, the company operated 4801 stores, compared with 4,914 a year ago. The drug retailer has lost money in each quarter since its June 2007 acquisition of Brooks & Eckerd. Total losses have amounted to more than $4 billion amid massive write-downs.

Late in September, the Camp Hill, Pennsylvania-based company reported second-quarter results that recorded a ninth straight quarter in which it posted a loss. Net loss attributable to common stockholders was $120.38 million or $0.14 per share, compared to a loss of $227.39 million or $0.27 per share in the same quarter of last year. Revenue for the quarter were $6.32 billion, compared to $6.50 billion in the prior year quarter. Analysts, on average, expected the company to report a loss of $0.16 per share on revenue of $6.40 billion for the quarter.

Same store sales for the quarter declined 1.1% over the prior-year 13-week period, consisting of a 4.9% decrease in the front end and a 0.8% increase in pharmacy. Excluding the acquired Brooks Eckerd stores, same store sales for the 13-week second quarter decreased 0.6% over the prior-year period with front-end decreasing 4.9% and pharmacy growing 2.0%. Gross margin was 26.7% for the thirteen week period ended August 29, 2009 compared to 27.4% for the thirteen week period ended August 30, 2008.

The struggling drugstore chain operator said in September that it expects negative trends and a tough economy to continue throughout the second half of the year. In September, the company lowered its earnings and revenue guidance for fiscal 2010. Net loss for fiscal 2010 is now expected to be between $390 million and $615 million. Earlier, the company expected net loss for the year in a range of $265 million to $490 million. For fiscal 2010, the company now expect loss per share to be in the range of $0.48 to $0.74. Earlier, the company expected loss per share of $0.33-$0.59 per share. For fiscal 2010, Total sales are expected to be between $25.7 billion and $26.2 billion with same store sales ranging from a decrease of 1.0% to an increase of 1.0% over fiscal 2009. Earlier, the company had projected fiscal 2010 sales of between $26.30 billion and $26.70 billion, with same store sales improving 0.50% to 2.50% over fiscal 2009.

Rite Aid expects its front-end sales to continue to be pressured during the remainder of fiscal 2010 as cautious consumers continue to spend less on non-essential items and be more aggressive about searching for promotional sales. It expects pharmacy gross margin to be lower than the prior year for the remainder of fiscal 2010 due to continued reimbursement rate pressures, fewer new generics and the impact of the recently implemented AWP cost adjustments on Medicaid business.

The company has reported drop in same-store sales during each month of the quarter. Rite Aid reported a 0.8% decline in comparable store sales for the five-week period ended November 28, 2009, compared to the same period last year. Total drugstore sales for the quarter declined 1.8% to $6.329 billion from $6.444 billion in the year-ago quarter. Same store sales for the four weeks ended October 24, 2009, decreased 0.5% while September same-store sales fell 0.3%.

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.

In terms of stock performance, Rite Aid shares are down 15% since the beginning of third quarter.

Full Disclosure: None