Zacks_Analysts' Blog : Rite Aid December Comps Rise - Analyst Blog

Same-store sales for December were strong at drugstore chain Rite Aid Corporation (RAD">RAD), driven by increased pharmacy sales. Same-store sales (comps) for the month increased 3.6% from last year, with front-end comps increasing 0.7%, pharmacy comps up 5.2% and prescription count at comparable stores increasing 3.2%.

Pharmacy comps for December incorporated a negative impact of around 177 basis points from new generic introductions.

Sales results, for the five weeks ended December 31, 2011, benefited from the shift of the New Year’s holiday season in the month of January.

Including the sales through January 2, Rite Aid estimates the comps to have risen of 2.1%, with flat front-end comps, a 3.3% rise in pharmacy comps and a 1.1% rise in prescription count at comparable stores.

For the 44 weeks ended December 31, 2011, Rite Aid reported a 1.8% increase in same store sales, including a 0.8% rise in front-end comps, a 2.3% rise in pharmacy comps and a 0.7% rise in prescription filled at comparable stores.

Sales

Rite Aid recorded total December drugstore sales of $2.644 billion, with prescription sales accounting for 64.5% of drugstore sales and third party prescription sales making up for 96.6% of pharmacy sales. The company’s December drugstore sales represented a 3.3% increase from sales of $2.560 billion in December 2010.

On a year-to-date basis through December 31, 2011, Rite Aid’s sales rose 1.4% to $21.545 billion from $21.246 billion in the year-ago period. Total drugstore sales for the period comprised about 67.9% of prescription sales, while pharmacy sales comprised nearly 96.5% of third-party prescription sales.

Headquartered in Camp Hill, Pennsylvania, Rite Aid is the third largest retail drugstore in the U.S. based on revenues and number of stores. The company operates in 31 states across the country and in the District of Columbia. As of December 31, 2011, the company operated 4,676 stores versus 4,726 stores as of December 31, 2010.

Rite Aid, which competes with CVS Caremark Corporation (CVS) and Walgreen Co. (WAG), currently, holds a Zacks #3 Rank, implying a short-term Hold rating on the stock. The company retains a long-term Neutral recommendation on the stock.