Rite Aid Corporation RAD recently released its sales data for the month of November. The company’s comparable-store sales (comps) for the five weeks ended Nov 28, 2015 climbed 0.9% year over year, reflecting an increase in front-end and pharmacy comps, as well as prescription count at comparable stores.
Front-end comps jumped 1.2%, while Pharmacy comps were up 0.7%, including a negative impact of nearly 267 basis points from generic drug introduction. Further, prescription count at comparable stores increased 0.8% year over year.
Rite Aid’s total drugstore sales for the month came in at $2.556 billion, down 0.6% from the year-ago figure of $2.571 billion. Prescription sales constituted 69.2% of total drugstore sales and third-party prescription sales accounted for 97.9% of pharmacy sales.
The company’s comps were up 0.9% for the third quarter of fiscal 2016. Pharmacy and front-end comps for the 13 weeks ended Nov 28, 2015 inched up 0.3% and 1.2%, respectively, while prescription count at comparable stores rose 0.2%.
Total drugstore sales for the quarter improved 0.8% to $6.701 billion from $6.651 billion in the comparable year-ago period. Prescription sales constituted 69.9% of total drugstore sales. Third-party prescription sales accounted for 97.9% of pharmacy sales.
For the year-to-date period (39 weeks ended Nov 28, 2015), Rite Aid reported comps increase of 1.9%, wherein Pharmacy comps rose 0.4% and front-end comps were up 2.6%. Prescription count at comparable stores improved 0.6%.
Total drugstore sales for the 39 week period increased 1.8% to $19.906 billion from $19.553 billion in the comparable year-ago period. Prescription sales constituted 69.5% of total drugstore sales. Third-party prescription sales accounted for 97.8% of pharmacy sales.
We note that Rite Aid, the nation’s third-largest drug store chain (in terms of store size), operated 4,560 stores in the U.S., as of Nov 28, 2015.
Recent Development
Rite Aid and leading drug store retailer Walgreens Boots Alliance Inc. WBA have agreed to merge. The deal, which is expected to close in the second half of calendar year 2016, is likely to create a drugstore behemoth with a superior network that will cater to a vast array of health and wellness solutions in-store as well as online. Further, this will intensify Walgreens’ competitive strength vis-à-vis CVS Health Corp. CVS, the second-largest drugstore chain by store size and the largest in terms of revenues.
The combined company to be formed from the Walgreens-Rite Aid merger will operate over 12,000 stores in the U.S. and fill over 1 billion prescription drugs every day. This compares favorably with CVS Health, which currently operates about 8,300 stores in the U.S. In an attempt to expand its foothold in the retail pharmacy space and outperform its competitor, Walgreens Boots, CVS Health, on its part, recently acquired Omnicare for $12.9 billion and took over Target Corporation’s TGT pharmacy business (in Jun 2015) for $1.9 billion.
The latest Walgreens-Rite Aid merger deal is definitely the talk of the town. However, we would like to see how this drugstore behemoth, once formed, benefits the industry, consumers and shareholders alike.
Rite Aid currently has a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment