Rite Aid sees rise in May same-store sales, updates 2015 fiscal year outlook

CAMP HILL, Pa. — Rite Aid announced on Thursday a 3.5% boost in same-store sales for May, provided preliminary estimated financial results for the quarter ended May 31 and updated its outlook for 2015 fiscal year.



For the five weeks ended May 31, same-store sales increased 3.5% over the prior-year period. May front-end same store sales increased 0.5%. Pharmacy same-store sales, which included an approximate 156 basis points negative impact from new generic introductions, increased 5.0%. Prescription count at comparable stores increased 3.2% over the prior-year period.



Total drug store sales for the five-week period increased 2.5% to $2.48 billion compared with $2.42 billion for the same period last year. Prescription sales accounted for 68.0% of drug store sales, and third party prescription sales represented 97.4% of pharmacy sales.



Same-store sales for the 13-week period ended May 31 increased 3.1% over the prior-year period. Front-end same-store sales were flat compared with the prior-year period while pharmacy same-store sales increased 4.6%. Prescription count at comparable stores increased 2.3% over the prior-year period.



Total drug store sales for the 13 weeks ended May 31 increased 2.6% with sales of $6.43 billion compared with $6.26 billion for the same period last year. Prescription sales represented 68.4% of total drug store sales, and third party prescription sales represented 97.4% of pharmacy sales.



Although results for the quarter ended May 31 will not be released until June 19, the company expects adjusted EBITDA for the quarter to be between $275 million and $285 million, net income to be between $35 million and $45 million and income per diluted share to be 4 cents. Based on pharmacy margin trends, particularly in May, the company expects its results for adjusted EBITDA to trail the results for the previous year’s first quarter due primarily to higher-than-expected drug costs resulting from a delay in realizing the level of expected generic purchase price reductions and a greater-than-expected reduction in reimbursement rates.



Based on the expected results for the quarter ended May 31 and the generic purchase price reductions that are expected for the remainder of the year, the company is updating its fiscal 2015 guidance for adjusted EBITDA, net income and income per diluted share. Adjusted EBITDA is expected to be between $1.28 billion and $1.35 billion. Net income for fiscal 2015 is expected to be between $298 million and $408 million or income per diluted share of 30 cents to 40 cents. In April, it had forecast earnings of $313 million to $423 million, or 31 cents to 42 cents per share. The company’s guidance for sales, same-store sales increases and capital expenditures remain unchanged.