Drugstore chain retailer, Rite Aid Corporation (RAD) came up with robust sales results for the month of January. The company’s comparable-store sales (comps) for the four weeks ended Jan 24, 2015 rose 4.8%. The improvement reflected an increase in front-end and pharmacy comps as well as higher prescription count at comparable stores.
Pharmacy comps went up 5.7%, which included a negative impact of nearly 114 basis points from generic drug introduction. Front-end comps improved 2.9% while prescription count at comparable stores rose 3.5% compared with the prior-year period.
Rite Aid’s total drugstore sales for the month came in at $2.026 billion, up 4.3 % from the year-ago figure of $1.943 billion. Prescription sales constituted 70.3% of total drugstore sales, while third-party prescription sales accounted for 97.3% of pharmacy sales.
Further, this Zacks Rank #1 (Strong Buy) stock reported a 4.4% rise in comps for the 47 weeks ended Jan 24. Pharmacy and front-end comps for the period were up 5.9% and 1.2%, respectively, while prescription count at comparable stores rose 3.6%.
Total drugstore sales for the 47-week period improved 3.9% to $23.789 billion against $22.896 billion in the year-ago comparable period. Prescription sales constituted 68.7% of total drugstore sales. Third-party prescription sales accounted for 97.5% of pharmacy sales.
Rite Aid, which competes with Herbalife Ltd. (HLF), has been riding on the success of its Health Alliance Program, which commenced in Mar 2014. Through this, the company works with different healthcare providers to offer holistic care to patients suffering from chronic or poly-chronic health problems. Rite Aid has been aggressively focusing on the expansion of the Health Alliance Program across all its stores to increase both customer traffic and top line.
Moreover, Rite Aid, which is the nation's third-largest drugstore chain in terms of store count, following Walgreens Boots Alliance, Inc. (WBA) and CVS Health Corporation (CVS), is focused on expanding its business and market share through alliances and lucrative acquisition opportunities, as evident from its partnerships with GNC Holdings Inc. and RediClinic. These collaborations form part of the company's strategic initiatives directed toward enhancing top and bottom lines.
We believe that these constant endeavors, along with its spectacular sales results, act as significant growth drivers for the company.
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