Rite Aid (RAD) reports increased second-quarter loss

Posted Sep 27th 2007 5:45PM by Beth Gaston Moon
Filed under: Earnings Reports, Bad News, Walgreen Co (WAG), CVS Corp (CVS), Rite Aid Corp (RAD)

Rite Aid (NYSE: RAD), the third-largest operator of drug stores in the U.S., said earlier today that its second-quarter loss was wider than expected.

In the retailer's latest reporting period, the company swallowed a loss of $78.2 million, or 10 cents per share, wider than the year-ago loss of $8.2 million (two cents per share) and four cents below Wall Street's consensus view of six cents per share. While cash flow and tax benefits improved during the quarter, Rite Aid spent more on interest and integration, as well as other items. RAD also absorbed a one-time financing commitment charge of $12.9 million. On the plus side, revenue rose 54% to $6.6 billion; on the minus side, analysts were expecting sales of $6.8 billion. Same-store sales edged 1.1% higher during the quarter.

RAD chairman and CEO, Mary Sammons, participated in a post-earnings conference call and was quoted by Forbes as taking a cheerful view: "The good news is we've seen the margin rate improve and expect sales to do the same."

Things don't look so "rad" going forward, however. The company reduced its full-year revenue guidance to a range of $24.5 billion and $25.1 billion, down from an earlier target of $25.3 billion to $26 billion. What's more, Rite Aid expects to lose between $78 million and $161 million this year, wider than the previously estimated loss of $47 million to $129 million.

RAD shares closed with a loss of 4.16% today. The move failed to impact chief competitors Walgreen Co. (NYSE: WAG) and CVS Caremark (NYSE: CVS); both stocks moved modestly higher in Thursday's session.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Tags: CVS, inthenews, RAD, Rite Aid, RiteAid, WAG, Walgreen

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9-28-2007 @ 5:54AM

C said...

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Your comments: Been posting all night aand yet again I'm censored and not for bad
language. When Rite Aide finally goes broke I'll buy it up. Last
post was censored.
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9-28-2007 @ 6:02AM

C said...

No help here I guess Rite Aide wins but with their rubbish service and late nioght drug dealing they will not last. A pity for the great two girls at my local, who regularly deal with lines of 40 and more. And then with the pick up after 20 customers dump their shopping on the floor and leave.

9-28-2007 @ 6:04AM