Rite Aid sees near 50 percent revenue increase due to Brooks/Eckerd acquisition
CAMP HILL, Pa. Rite Aid on Thursday posted $6.6 billion in revenues for its first quarter ended May 31, representing an increase of 49.3 percent compared with the year-ago quarter, primarily as a result of the acquisition of the Brooks/Eckerd stores. Net loss for the first quarter was $156.6 million, or $.20 per diluted share, compared with last year’s first-quarter net income of $27.6 million, or $.04 per diluted share.
Same-store sales (which do not yet include those Brooks/Eckerd stores) for the 13-week first quarter increased 1.5 percent, consisting of a 1.4 percent pharmacy same-store sales increase and a 1.7 percent increase in front-end same-store sales.
The number of prescriptions filled in same-stores increased 0.2 percent. Prescription sales accounted for 67.6 percent of total sales, and third-party prescription sales represented 96.2 percent of pharmacy sales.
During the quarter, Rite Aid completed the conversion of all of the acquired Brooks and Eckerd store systems and remains on schedule to finish the minor remodels and complete the integration by October of this year.
“We increased both pharmacy and front end sales in the core Rite Aid stores during the quarter, and sales trends in our acquired stores continued to improve,” stated Mary Sammons, Rite Aid chairman, president and chief executive officer. “We also passed a major milestone in the integration of the former Brooks/Eckerd stores by completing the store systems conversion. Today pharmacy dispensing, cash registers and all business applications are now consistent in all of our stores, and we can manage our business seamlessly nationwide. We’re in the home stretch now, finishing the remaining minor remodels of the acquired stores.”
The completion of the remodels, which typically provides a lift in the remodeled stores, and other chain-wide pharmacy and front-end initiatives to be introduced over the course of the second quarter ought to help offset the impact of a down economy, Sammons said.
In the first quarter, Rite Aid opened 5 stores, relocated 6 stores, acquired 8 stores, remodeled 39 stores and closed 68 stores, the majority of which were related to combining acquired stores in close proximity to existing stores. Stores in operation at the end of the first quarter totaled 5,004.
Consumer technology sales jump 7 percent in May
PORT WASHINGTON, N.Y. Consumers spending their economic stimulus checks helped consumer technology sales jump 7 percent to $5.4 billion in May, the biggest monthly increase of 2008.
Notebook computers and LCD TVs were the strongest categories followed by digital cameras, MP3 players, inkjet cartridges and desktop computers.
Consumer technology spending had been down 5 percent from January through April. “The stimulus checks played a part in the positive results we saw in May but we still have a lot of ground to make up,” said Stephen Baker, vice president of industry analysis for the NPD Group.
Blu-Ray on pace for $1 billion in 2008 sales
LAS VEGAS Home entertainment executives said they expect the Blu-Ray DVD format to gain traction this year and approach $1 billion in sales as player prices fall and consumer awareness rises.
“I think we’re going to come close to $1 billion in software sales for 2008,” 20th Century Fox Home Entertainment president Mike Dunn told retailers at the 27th annual Home Media Expo in Las Vegas this morning. That compares to just $260 million generated by Blu-Ray in 2007.
While those sales will represent only 7 percent of the $15 billion in total DVD sales expected in 2008, they’ll more than double to $2.5 billion in 2009 and overtake standard DVD by 2012, according to the Entertainment Merchandisers Association. The industry is counting on Blu-Ray to reinvigorate the DVD business, where sales were flat last year and are expected to decline the next few years.
During the Home Media Expo opening session June 24, Blockbuster Entertainment president Jim Keyes told the audience more than 2,000 Blockbuster stores now have Blu-Ray display areas that give customers a side-by-side comparison of movies on Blu-Ray compared to standard DVD.
Keyes said the chain is also training employees to explain the benefits of the high definition format. “This is the first time in a quite a while that we’ve had something really new to talk about in stores,” said Keyes.
But Forrester Research principle analyst James McQuivey said it would take at least another year for consumers to get on the Blu-Ray bandwagon. “I don’t think you’re really going to see it happen until the 2009 holiday season,” said McQuivey.