By Tess Stynes
Rite Aid Corp. (RAD) said its same-store sales rose 1.5% in
February from a year earlier as generic drug introductions and a
decline in flu-related over-the-counter and prescription medicines
weighed on growth.
Rite Aid, the No. 3 U.S. drugstore chain by sales behind
Walgreen Co. (WAG) and CVS Caremark Corp. (CVS), has posted a
string of quarterly profits in a turnaround following years of
losses. The company's loyalty program has bolstered its sales and
Rite Aid also has worked to improve its balance sheet.
Still, Rite Aid and its competitors have faced revenue pressure
lately due to a wave of new generic drugs. Though generic drugs
carry higher margins than branded ones, they can hurt sales because
they command lower prices.
During February, Rite Aid's pharmacy same-store sales increased
3.1%, including a negative impact of 1.38 percentage points from
generic drug introductions. Same-store prescriptions decreased
1.4%, with the vast majority of the decline owing to fewer
flu-related prescriptions.
Same-store sales at the front end, where items such as
toiletries and food are sold, fell 1.8%, partly thanks to weaker
sales of flu-related over-the-counter products.
Total drugstore sales rose 2.4% to $2.52 billion.
For its fiscal fourth quarter ended March 1, Rite Aid reported
that same-store sales rose 2.1%, including a decline of 0.7% in the
front of the store and a 3.5% increase in the pharmacy section.
Same-store prescription counts fell 1.8%.
Total drugstore sales increased 2.2% to $6.57 billion. Analysts
polled by Thomson Reuters expected revenue of $6.5 billion.
On Wednesday, Walgreen reported that its same-store sales rose
4.5% in February from a year earlier, led by strong growth in the
pharmacy section.
Write to Tess Stynes at tess.stynes@wsj.com
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