Rite Aid Reports Fourth Quarter and Fiscal 2010 Results
“It was a challenging fourth quarter but a productive fiscal year” is how President and COO John Standleydescribed Rite Aid’s recent fourth quarter and fiscal 2010 results. Both Standley and Rite Aid Chairman and CEO Mary Sammons pointed to the exciting initiatives launched during the year that are designed to grow profitable sales and improve the company’s overall performance long-term.
In the fourth quarter, Rite Aid controlled operating expenses and improved front-end margins by better managing seasonal inventory, but those gains could not offset a decrease in same store sales brought about by cautious consumer spending and a cough, cold and flu season that started strong in the third quarter but died in the fourth. Pharmacy margin pressure caused by lower prescription reimbursement rates also negatively affected the bottom line.
Some of those same factors negatively impacted results for the fiscal year. Same store sales for the year decreased 0.9 percent over the prior 52-week comparable period despite the number of prescriptions filled at same stores increasing by 0.8 percent. Net loss for the fiscal year was $0.59 per diluted share.
Sammons says the company made good progress in many areas during the fiscal year. “Even though we held tight on expenses, our overall customer satisfaction rating improved every quarter as our associates continued to take great care of their customers,” she says. “We delivered free cash flow for the first time in three years and started to reduce debt. And thanks to our working capital initiatives, we start the new fiscal year with a strong liquidity position, enabling us to make strategic investments in initiatives for long-term growth.”
Some of those initiatives include launching Rite Aid’s new customer loyalty program wellness+ chainwide, training an additional 4,000 pharmacists to give immunizations by next flu season and releasing a new Rite Aid Brand architecture to increase these higher margin transactions. Rite Aid also expects its segmentation strategy to improve the productivity of its diverse store base will continue to deliver positive results.