Rite Aid Corporation (NYSE:RAD) Dips On 3Q14 Earnings Release

Posted by Chris Bell December 20, 2013 0 Comment 1507 views

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.

Earnings Highlights

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.

Partnership Extension

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.

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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