Rite Aid Corporation (NYSE:RAD) Dips On 3Q14 Earnings Release
Rite Aid Corporation (NYSE:RAD) is a Pennsylvania based retail drugstores operator that sells prescription drugs and a range of other merchandise through more than 4,600 stores in 31 states. The stock is surged more than 400% in trailing twelve months and yesterday it witnessed sharp plunge of 10.25% following an earnings report.
Rite Aid Corporation (NYSE:RAD) reported moderate 1.9% increase in the 3Q14 revenue which remained $6.4 billion as compared to $6.2 billion in a prior year quarter. This increase could be attributed to 2.3% increase in same store sales that includes 3.5% increase in pharmacy sales and 0.2% decrease in front end sales.
Rite Aid Corporation (NYSE:RAD) mentioned that prescription sales accounted for 68.6% of total drugstore sales and the number of prescriptions filled in same stores increased moderate 0.7% over the prior year quarter. Third party prescription revenue was reported at 97.1% of pharmacy sales. However the company faced the hit of new generic introductions as the pharmacy sales suffered approximately 88 basis point negative impact.
Rite Aid Corporation (NYSE:RAD) reported net income of $71.5 million or $0.04 per diluted share for 3Q14 as compared to $61.9 million or $0.07 per diluted share reported for 3Q13. The increase was primarily attributed to decreases in interest expense, lease termination and impairment charges.
Besides the earnings release, Rite Aid Corporation (NYSE:RAD) also announced an extension of its existing partnership with a leading specialty retailer GNC Holdings Inc. (NYSE:GNC) through 2019. Both the companies have been into the partnership since December 1998.
Ken Martindale, Rite Aid president and chief operating officer said, “With the extension of our retail agreement with GNC, we will be able to continue bringing our customers the outstanding lineup of highly popular GNC products they trust while delivering on our mission of helping our customers meet their unique health and wellness needs.”
The partnership extension will allow Rite Aid Corporation (NYSE:RAD) to add at least 300 GNC LiveWell stores within its stores through 2019. Presently there are more than 2,200 GNC stores operating within the Rite Aid stores across the country.