Retail drugstore chain operator Rite Aid Corp. (RAD) Thursday reported a profit for the third quarter, compared to a loss last year, benefiting from continued front end sales and prescription count growth. Updating its full year guidance, the company said it may report a profit for the year.
Income attributable to shareholders for the quarter was $60.53 million or $0.07 per share, compared to a loss of $54.51 million or $0.06 per share last year.
On average, 7 analysts polled by Thomson Reuters expected a loss of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.
Adjusted EBITDA was $295.3 million, or 4.7 percent of revenues, while it totaled $221.5 million or 3.5 percent of revenues last year.
Rite Aid Chairman, President and CEO John Standley said, "We have reached a significant milestone in our turnaround efforts by returning to profitability. Our record Adjusted EBITDA was driven by strong prescription count growth, an increase in front-end same store sales and higher pharmacy gross margin resulting from the introduction of new generic medications."
Revenues slid to $6.24 billion from $6.31 billion, primarily due to the impact of the introduction of lower cost generics on pharmacy same store sales as well as store closings. Analysts expected revenues of $6.28 billion.
Same store sales slipped 1.5 percent, consisting of a 1.1 percent rise in front end sales offset by a 2.7 percent decrease in pharmacy sales. Pharmacy sales included around 924 basis point negative impact from new generic introductions.
The number of prescriptions filled in same stores increased 3.6 percent, including the benefit of additional prescriptions resulting from the Walgreens/Express Scripts dispute.
Prescription sales accounted for 67.8 percent of total drugstore sales, and third party prescription revenue formed 96.5 percent of pharmacy sales.
Further, Rite Aid updated its fiscal 2013 guidance. The company now sees between a net loss of $38 million or $0.05 per share and net income of $33 million or $0.03 per share for the full year.
Sales are now expected to be between $25.150 billion and $25.300 billion and same store sales are estimated to range from a decrease of 0.90 percent to a decrease of 0.30 percent compared to last year.
Rite Aid raised its Adjusted EBITDA guidance to be between $1.050 billion and $1.075 billion.
The previous projection was for a net loss between $69 million and $196 million or a loss per share of $0.09 to $0.23. Sales were earlier projected to be between $25.1 billion and $25.4 billion while same-store sales were forecast to range from a decrease of 1.0 percent to an increase of 0.25 percent.
Wall Street expects a full year loss of $0.15 per share on revenues of $25.36 billion.
RAD, which closed at $1.04 on Wednesday, is surging over 16 percent in pre-market activity and is currently at $1.22.
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