Duane Reade's Q4 driven by store renovations, sales growth

NEW YORK Duane Reade announced on Tuesday that fourth-quarter sales rose 5.3% due in part to store renovations and strong pharmacy same-store sales growth.

Net retail store sales, which exclude pharmacy resale activity, increased 5.3% to $451.3 million from $428.6 million in the fourth quarter 2008. Total net sales inclusive of pharmacy resale activity rose 0.1% to $465 million.

Total same-store sales increased 2.6% as pharmacy same-store sales rose 6%. Front-end same-store sales increased 3.5% driven, in part, by strong sales of food and beverage items and OTC products.

Net loss for the fourth quarter was $84.8 million, compared with a loss of $17.4 million in the year-ago period. The retailer attributed the increase to an additional $59.5 million in fair value charges for the preferred stock's mandatory redemption features.

For the full year, total net sales were $1.84 billion, reflecting an increase of 3.6%. Net retail store sales increased 4% to $1.76 billion.

Total same-store sales for the year increased 1.5%, with a front-end same-store sales decrease of 0.8% and a pharmacy same-store sales increase of 4.6%.

For the full year, net loss was $124.3 million, compared with a loss of $72.8 million in 2008. The increase in net loss, according to the 257-store chain, is attributable to the fourth-quarter fair value charge related to the company's preferred stock, partially offset by a $12.5 million gain on debt extinguishment and the improvement in full year operating loss.

As previously reported, Walgreens is looking to acquire Duane Reade from affiliates of Oak Hill Capital Partners in a cash deal valued at about $1.08 billion, which includes the assumption of debt.

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