Rite Aid’s June comps decrease 1%
CAMP HILL, Pa. — Rite Aid’s same-store sales decreased in June, compared with June 2011, due largely to a decrease in pharmacy comps, the retail pharmacy chain said Thursday.
The 1% decrease in overall comps included a 1.6% decrease in pharmacy same-store sales — including a negative effect of 672 basis points from new generic introductions — and a 0.3% increase in front-end same-store sales. Prescription count at comparable stores increased 2.9%.
The results for the month stand in contrast to Rite Aid’s strong first-quarter 2012 results, but appear in line with results for the pharmacy retail industry overall and with analyst forecasts. In a report Thursday, Guggenheim Partners analyst John Heinbockel said his firm remained "bullish" about Rite Aid, saying that despite comps’ being below the forecasted 1.5% increase, the decrease was due to the hit from generics and the timing of the Fourth of July holiday.
In a report last week, Heinbockel wrote that spending had gone down somewhat in May "with more to go," resulting in a "cautious" outlook on consumer spending due to ongoing pressure on personal incomes from payroll taxes. As a result, he wrote, comps likely would moderate. "We continue to lean in a more defensive direction, preferring investments in the dollar stores and drug retailers, both of which should benefit from superior relative earnings momentum through the balance of 2012 and into 2013," Heinbockel wrote.
Total drug store sales declined as well, to $1.9 billion, compared with nearly $1.6 billion in June 2011.
Comps for the 17-week period that ended June 30 increased 1.7% over the same period last year, including a 2.1% increase in front-end comps and a 1.4% increase in pharmacy comps, as well as a 3% increase in prescription count at comparable stores.
Meanwhile, total drug store sales increased 1%, from $8.28 billion to $8.37 billion.
Sales up, comps down for Fred’s
MEMPHIS — June sales for Fred’s rose 2% to $182.6 million, compared with the year-ago period, the retailer said Thursday.
Comparable-store sales, however, saw a decline of 4%, compared with a decrease of 0.7% in the same period last year. Fred’s CEO Bruce Efird said the drop primarily was due to branded-to-generic shift in pharmacy sales that now are under way.
"Adjusting for the brand-to-generic shift in the pharmacy department, we now anticipate overall comparable-store sales in July to be in the range of flat to a decline of 3%," Efird said. "We expect earnings to be at the lower end of our projected range of 15 cents to 17 cents for the second quarter."
During the month, Fred’s opened two express pharmacy locations and closed 12 stores. The store closings were in line with the company’s real estate plan for 2012.
Cool Off personal cooling towelette makes retail debut
SAN ANTONIO — A personal cooling towelette has entered the market.
Cool Off is designed to reduce surface skin temperatures 12 degrees and will maintain that lower temperature for approximately one hour, the company said. The towelettes, which are pocket-sized, are infused with 17 different cooling and therapeutic herbs, botanicals and essential oils.
Cool Off is available at such retailers as Duane Reade and H-E-B, as well as online at Amazon.com, CVS.com and Drugstore.com.