Rite Aid Reports Third Quarter Financial Results
3Rite Aid recently reported its third quarter results for fiscal 2010, making progress on many of the company’s key initiatives and completing the quarter in a much stronger financial position than a year ago.
With more than $900 million in liquidity and no major debt coming due until 2012, the company is “in a good position to both weather the current economic storm and improve our results long-term with the growth and profit strategies we’ve identified,” says Chairman and CEO Mary Sammons.
Net loss for the third quarter, which ended Nov. 28, decreased significantly when compared to the previous year’s third quarter, and the company delivered adjusted EBITDA similar to the prior year’s number despite lower front-end sales and increased pharmacy margin pressure.
“Our team did a great job of operating more efficiently,” says Sammons. “And even though we held tight on expenses, customer satisfaction ratings in both the front-end and pharmacy were substantially higher than last year’s third quarter.”
The economy and high unemployment rate continued to negatively impact same store front-end sales, which decreased 2.5 percent from the prior year’s third quarter. With consumers increasingly shopping for bargains, Sammons said it’s even more important for Rite Aid to emphasize value through special promotions, special buys and continuing to step up the company’s commitment to private brand.
Rite Aid’s prescription growth initiatives continued to deliver good results as pharmacies filled 1.5 percent more prescriptions in the third quarter than in the same quarter the previous year, helping to offset some of the pharmacy margin rate decrease. The company’s more than 2,000 immunizing pharmacists administered 84 percent more flu shots during the quarter than during the same period the previous year.
Enrollment in the RX Savings Card program increased to 4.3 million and the company’s generic dispense rate grew to nearly 71 percent, helping to deliver value to patients.
Rite Aid launched wellness+, its new customer loyalty program, in four test markets. The program is doing “very well, and we’re excited about the potential it offers our business,” Sammons says. The company expects to launch the program chainwide in 2010.
Sammons said the company expects liquidity to remain strong, and to finish fiscal 2010 on Feb. 27 cash flow positive and having reduced its debt.