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Rite Aid Profit Falls, Hurt By Special Charges

Rite Aid, the third-largest U.S. drugstore chain, posted a lower quarterly profit on Thursday, weighed down by special charges.

Profit was $15.1 million, or 1 cent a share, in the fiscal fourth quarter ended March 3, compared with $1.25 billion, or $1.83 a share, a year earlier, when the company got a boost from a large income tax benefit.

In the latest quarter, Rite Aid was hit by an $18.7 million charge for the early redemption of debt and a $16.2 million inventory charge.

Analysts, on average, expected Rite Aid to earn 3 cents a share, according to Reuters Estimates.

Separately, the company said it expected to complete its acquisition of the Brooks and Eckerd drugstore chains from Canada's Jean Coutu Group by the end of May, pending final regulatory approval by the Federal Trade Commission and other conditions.

Rite Aid, the third-largest U.S. drugstore chain, also said it had reached an agreement with FTC staff to divest 24 stores.

That pact is subject to the FTC commissioners' approval, which Rite Aid said it expected to obtain.

The attorneys general of several states are also reviewing the deal, and that process is going smoothly, the retailer said.

Rite Aid got shareholder approval in January for its plan to buy the U.S. Eckerd and Brooks stores. It previously said the deal should close shortly after the end of its fourth quarter, which ended on March 3.

The deal includes about 1,850 U.S. Brooks and Eckerd stores and six distribution centers located mainly on the East Coast and in the Mid-Atlantic states.

In the agreement with FTC staff, Rite Aid plans to divest 24 stores in Connecticut, Maryland, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Virginia and Vermont.

The company, which is based in Camp Hill, Pa., declined to comment on which state attorneys general are reviewing the deal, since that process is still ongoing.

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