Drugstore chain retailer, Rite Aid Corporation RAD reported healthy sales results for the month of June. The company’s comparable-store sales (comps) for the four weeks ended Jun 27, 2015 rose 2.4%, reflecting an increase in front-end and pharmacy comps as well as higher prescription count at comparable stores.
Pharmacy comps went up 3.4%, including a negative impact of nearly 226 basis points from generic drug introduction. Front-end comps improved 0.3% while prescription count at comparable stores inched up 0.2% year over year.
Rite Aid’s total drugstore sales for the month came in at $2.040 billion, up 2.2% from the year-ago figure of $1.995 billion. Prescription sales constituted 69% of total drugstore sales and third-party prescription sales accounted for 97.8% of pharmacy sales.
Year-to-date, this Zacks Rank #3 (Hold) stock reported a 2.8% rise in comps for the 17 weeks ended Jun 27. Pharmacy and front-end comps for the period were up 3.8% and 0.6%, respectively, while prescription count at comparable stores rose 1.3%.
Total drugstore sales for the 17-week period improved 2.6% to $8.643 billion from $8.420 billion in the year-ago comparable period. Prescription sales constituted 69.1% of total drugstore sales. Third-party prescription sales accounted for 97.7% of pharmacy sales.
Rite Aid has been gaining from its stringent focus on strengthening its portfolio of health and wellness services. We applaud the company’s sustained focus on enhancing pharmacy and clinical services through the Rite Aid Health Alliance and its Wellness+ customer loyalty program.
Through its Health Alliance Program, the company works with different healthcare providers to offer holistic care to patients suffering from chronic or poly-chronic health problems. Further, Rite Aid has been aggressively expanding its Health Alliance Program across all its stores to increase customer traffic and enhance 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, has been undertaking a number growth initiatives, such as expansion of its pharmacy and clinical services and cost reduction. We believe these programs and initiatives will enable the company to increase its customer base and generate long-term profitability.
A better-ranked stock in the drugstore retail space is Herbalife Ltd. HLF with a Zacks Rank #1 (Strong Buy).
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