Rite Aid reports $6.3 billion revenues for second quarter ended August, 2011

Sep 22 2011

Rite Aid Corporation (NYSE: RAD) today reported financial results for its fiscal second quarter ended August 27, 2011.

“Customers are responding positively to our sales initiatives, including our highly popular and fast-growing wellness + loyalty program, which now has over 44 million enrolled members. Our positive same store sales growth, along with continued reductions in operating costs, drove an increase in adjusted EBITDA.”

The company reported revenues of $6.3 billion, a net loss of $92.3 million, or $0.11 per diluted share, and adjusted EBITDA of $184.3 million, or 2.9 percent of revenues. Results benefited from continued growth in same store sales and a decrease in selling, general and administrative (SG&A) expenses. The prior year results included a $44 million charge related to refinancing activities.

"We are pleased with the continued improvement in our top-line results, highlighted by three consecutive quarters of same store sales growth," said John Standley, Rite Aid President and CEO. "Customers are responding positively to our sales initiatives, including our highly popular and fast-growing wellness + loyalty program, which now has over 44 million enrolled members. Our positive same store sales growth, along with continued reductions in operating costs, drove an increase in adjusted EBITDA."

"We also started the rollout of our new wellness store format in the second quarter, with 40 wellness stores completed as of the end of the second quarter. Customers tell us they like the look and feel of our new format which offers expanded clinical services, new health and wellness product offerings and our unique on-site Wellness ambassadors. We have also expanded our immunization program, with more than 11,000 immunizing pharmacists available to provide these vital services in all Rite Aid stores."

Second Quarter Summary

Revenues for the 13-week quarter were $6.3 billion versus revenues of $6.2 billion in the prior year second quarter. Revenues increased 1.8 percent primarily as a result of an increase in same store sales, which were partially offset by store closings.

Same store sales for the quarter increased 2.2 percent over the prior year 13-week period, consisting of a 2.5 percent increase in the front end and a 2.0 percent increase in the pharmacy. Pharmacy sales included an approximate 148 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 0.1 percent over the prior year period. Prescription sales accounted for 67.8 percent of total drugstore sales, and third party prescription revenue was 96.4 percent of pharmacy sales.

Net loss was $92.3 million or $0.11 per diluted share compared to last year's second quarter net loss of $197.0 million or $0.23 per diluted share. Increased revenues, decreases in SG&A and interest expense, and a gain on bond repurchases in the current year compared to charges relating to refinancing activities in the prior year, contributed to the decrease in net loss. Partially offsetting these improvements was lower front-end margin, driven by investments in Rite Aid's wellness + customer loyalty program.

Adjusted EBITDA (which is reconciled to net loss in the attached table) was $184.3 million or 2.9 percent of revenues for the second quarter compared to $181.2 million or 2.9 percent of revenues for the like period last year.

In the second quarter, the company relocated five stores, remodeled 35 stores and closed seven stores. Stores in operation at the end of the second quarter totaled 4,697.

Rite Aid Updates Sales, Adjusted EBITDA, Net Loss and Capital Expenditures Guidance for Fiscal 2012.

Rite Aid has updated its fiscal 2012 guidance with sales expected to be between $25.8 billion and $26.1 billion, same store sales to range from an increase of .75 percent to an increase of 2.0 percent over fiscal 2011 and Adjusted EBITDA (which is reconciled to net loss in the attached table) to be between $825 million and $900 million. Net loss is expected to be between $345 million and $495 million or a loss per diluted share of $0.40 to $0.56. Capital expenditures are expected to be $250 million.

Source Rite Aid Corporation