Rite Aid Corp., the No. 3 U.S. drugstore chain, said profit this year will be below analyst
estimates and it will start a mail-order pharmacy to reverse a decline in prescription sales.
Fourth-quarter sales fell 1.3 percent to $4.34 billion as pharmacy revenue declined. Profit more than tripled because of a tax gain, the Camp Hill, Pennsylvania-based company said today in a statement. Rite Aid forecast earnings this year of as much as 7 cents a share, below the 16 cents estimated by analysts.
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Competition from mail-order programs and demand for generic drugs crimped prescription sales, which account for about 60 percent of total revenue. Rite Aid will offer medications by mail to fend off rivals and try to win new customers, Chief Executive
Mary Sammons said on a conference call.
“There is no silver bullet with which to jump start the notoriously sticky pharmacy business,” Goldman Sachs analyst John Heinbockel, who has an “in-line” rating on the stock, said in a report yesterday. The company must boost pharmacy revenue 2 percent to 3 percent to have a “sustained turnaround,” he said.
Shares of Rite Aid rose 24 cents, or 6.4 percent, to $4.01 at 4:01 p.m. in New York Stock Exchange composite trading.
They’ve risen 9.6 percent this year.
Bloomberg News
