CAMP HILL, Pa. – Rite Aid, the nation’s No. 3 drugstore chain, today posted a loss of 1 cent per diluted share for the fiscal year ended March 3, compared with the previous year’s profit of $1.89 per share, on revenue that increased 1.4 percent to $17.5 billion.
Net income was $26.8 million, the company said, a dramatic decrease from 2006’s $1.27 billion, which included a one-time income tax benefit of $1.24 billion.
Revenue increased 1.4 percent to $17.5 billion, despite the impact of a shorter fiscal year. (Fiscal 2007 had 52 weeks, compared with the previous year’s 53.)
Same-store sales increased 3.4 percent year over year. Pharmacy same-store sales increased 4.4 percent and front-end sales increased 1.9 percent.
The year saw the opening of 40 Rite Aid stores, relocation of 66, acquisition of two, remodeling of 19 and closing of 32, leaving the company with 3,333 stores on March 3.
“Our fourth quarter was a good finish to a milestone year for Rite Aid, in which we turned our pharmacy business around and reached agreement on an acquisition that will increase our store base by more than 50 percent, giving us the scale to better compete with our drugstore competitors,” said President and CEO Mary Sammons.
For the 13-week quarter ended March 3, income plunged to $15.1 million or 1 cent per share from the year-ago $1.25 billion or $1.83 per share. The year-ago result include a one-time credit of $1.23 billion from an income tax benefit.
EBITDA for the quarter was $201.0 million.
Fourth-quarter revenue decreased 4.4 percent to $4.56 billion. Same-store sales increased 3.0 percent, with pharmacy same-store sales increasing 4.1 percent and front-end sales 1.2 percent.
Fourth-quarter highlights included the approval by Rite Aid shareholders of the company’s pending acquisition of about 1,850 Brooks/Eckerd Pharmacy stores and six distribution centers. The acquisition, now expected to close by the end of May, will boost fiscal 2009 earnings by an estimated 18 cents to 20 cents per share, Rite Aid said.
Having “developed an extensive, detailed integration plan for the upcoming Brooks and Eckerd [acquisition, Rite Aid is] ready to hit the ground running,” Sammons said. Rite Aid today announced it has reached agreement with Federal Trade Commision staff – subject to approval by agency supervisors – to divest 24 stores, located in Connecticut, Maryland, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Virginia and Vermont. The attorney generals of several states are also reviewing the transaction, a process the company said continues to go smoothly.
The company in August agreed to buy the Eckerd and Brooks pharmacy chains from Jean Coutu Group Inc. for $2.54 billion to compete with Walgreen Co. and CVS/Caremark Corp., Bloomberg News noted.
Today, Rite Aid predicted savings annual savings of $225 million in fiscal 2009, up from an original estimate of $150 million. “That number could still prove to be conservative,” Chris Kagaoan, an analyst at J. & W. Seligman in New York, which manages $20 billion including Rite Aid shares, told Bloomberg.
Additional information is available at www.riteaid.com.
