Drugstore chain retailer, Rite Aid Corporation’s (RAD) same-store sales (comps) for the four weeks ended Jan 26, 2013 inched up 0.3%. The rise was an outcome of an increase in front-end comps, offset by a decline in pharmacy comps.
Higher over-the-counter sales of flu-related products resulted in a 4.2% rise in the company’s front-end comps. Flu-related product sales contributed 2.4% to the growth in front-end comps. Despite a 5.0% increase in prescription counts at comparable stores, Pharmacy comps for January declined 1.4%. Pharmacy comps for the month was adversely impacted by about 665 basis points due to the introduction of new generic drugs. An increase of 3.4% in flu-related prescriptions and flu shots primarily prompted the growth in prescription counts.
Rite Aid reported total drugstore sales of $1.914 billion for the month, with prescription sales accounting for 68.9% of drugstore sales and third-party prescription sales making up for 96.2% of pharmacy sales. The company’s January sales declined 0.5% from the year-ago level of $1.923 billion.
Year-to-date, i.e. for the 47-week period ended on Jan 26, the company’s comps were up by a modest 0.1%, while net sales slipped 0.6% year over year to $22.826 billion. The increase in comps mainly came from a 1.6% rise in front-end comps partially offset by a 0.7% decrease in pharmacy comps. Meanwhile, prescription count at comparable stores jumped 3.7%.
Prescription sales comprised 67.5% of total drugstore sales. Additionally, third-party prescription sales accounted for 96.5% of pharmacy sales.
Rising estimates over the last 60 days – basically due to the company’s solid third-quarter fiscal 2013 results and revised bottom-line outlook – have helped Rite Aid to achieve a Zacks Rank #1 (Strong Buy).
Other drug store stocks that are performing well include CVS Caremark Corporation (CVS), AmerisourceBergen Corporation (ABC) and Cardinal Health Inc. (CAH). These companies currently have a Zacks Rank #2 (Buy).
More From Zacks.com
- Investment & Company Information
- Rite Aid Corporation