Rite Aid’s January Sales Show Steady Eddy Growth

by Trefis Team
Rite Aid
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Rite Aid (NYSE:RAD), the third largest retail pharmacy chain in the United States that competes with Walgreen (NYSE:WAG) and CVS Caremark (NYSE:CVS), recently announced its January revenues, posting robust same-store sales increase of 2.2%, with strong pharmacy sales and prescription count per store as well as improved front-end sales.

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Pharmacy same store sales grew 2% y-o-y despite absorbing a negative impact of around 230 bps from new low-priced generic drugs. Prescription count at comparable stores increased 1.6% helped by the Wellness+ Loyalty and immunization programs. Even front end sales increased 2.7% compared to 1% in December 2011.

Improving Trend in Key Metrics

Last quarter, Rite Aid posted a fourth consecutive quarter of comparable store sales growth and raised its fiscal 2012 guidance. The consistently improving comps have resulted from Rite Aid’s focus on improving cost-efficiency and profitability by driving up same store sales and improving key metrics like prescriptions per store and front-end sales per unit area of retail space, along with the gradual closure of highly under-performing stores.

Same store sales have grown by 2% over the 11-month period of fiscal 2011 so far, with a 1% improvement in front-end same-store sales and 2.3% higher pharmacy comparable same-store sales and about 1% more prescriptions filled at each Rite Aid store. To date, Rite Aid operates 4,672 stores, compared to 4,718 stores in January 2011. The company is due to announce its annual results next month.

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