Rite Aid Sales Increase, Meets Profit Expectations

Rite Aid Corp announced that its revenue for the third quarter increased by 22% as its sales at same stores grew even though the company introduced new generic drugs.

The third biggest chain of drugstores in the U.S. agreed to a takeover by Walgreens Boot Alliance the No. 1 chain in a deal worth $17.2 billion during late October. On Thursday, according to that agreement the company said it would not offer guidance for 2016.

John Standley the CEO at Rite Aid cited growth in sales at same stores and revenue and positive contribution from the new pharmacy segments for the strong results.

He added that the retail healthcare unit at the pharmacy was strengthened by converting stores to the wellness format.

The chain and its rivals have adjusted to offerings to broaden the business model as the drugstore and pharmacy industry expands to cover the health and wellness sector.

The company worked to expand the RediClinics as well as remodeled over 95 wellness stores that offer natural personal care items and organic food and feature rooms for consultation for talking with pharmacies.

Sales at same stores increased 0.9% over the same period one year ago, with an increase of 0.3% in sales in the front-end and an increase of 1.2% in pharmacy sales.

Pharmacy sales were hit by 252 basis points from the introduction of generic drugs, said the company.

Rite Aid posted $59.5 million in profit equal to 6 cents per share, which was lower than last year’s $104.8 million equal to 10 cents per share.

The profit from last benefited from a deferred tax valuation of $45.9 million.

Adjusted earning prior to interest, taxes amortization and depreciations reached $373.1 million, which was up from last year’s $332.8 million.

Revenue soared 22% to end the quarter at $8.15 billion. Analysts forecasted earnings at 6 cents per share on revenue of $8.18 billion.

Shares have increased by 30% over the past 12 months and were up Thursday morning before the opening bell by 1.1%.

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