Rite Aid Nov. same-store sales flat, miss Street

CAMP HILL, Pa. - Drugstore operator Rite Aid Corp. on Thursday reported weaker-than-expected sales in the fiscal third quarter, and also fell short on a key measurement of retailer health as it posted disappointing same-store sales in November.

Rite Aid said traditional holiday sales were not as strong as they were last year because of a later Thanksgiving, while sales of recently introduced generic drugs hurt its pharmacy sales.

The company's total sales decreased 0.9 percent in the fiscal third quarter, to $6.44 billion from $6.5 billion. Analysts had expected $6.49 billion, according to Thomson Reuters. The period ended Nov. 29.

In November, Rite Aid said its same-store sales, or sales open at least one year, were flat compared with the same period in 2007. Same-store pharmacy sales edged up 0.2 percent, as Brooks Eckerd pharmacies continued to struggle, and front-end, or non-pharmacy, sales fell 0.4 percent.

Analysts predicted same-store sales would grow 2.5 percent for the month, with pharmacy sales rising 2 percent and front-end stores up 3.6 percent.

Same-store sales at Brooks Eckerd stores declined 2.1 percent, with pharmacy sales down 3 percent and front-end sales rising 0.8 percent. Rite Aid bought the Brooks Eckerd stores in June 2007. While same-store sales at those locations have been in decline, they were steadying in recent months: total Brooks Eckerd same-store sales grew in October, with pharmacy sales only down slightly and front-end sales showing strong improvement.

Those trends reversed in November, which for retailers was the last five weeks of the quarter.

Excluding Brooks Eckerd stores, November same-store sales increased 1 percent, as pharmacy sales grew 2.1 percent and front-end sales dipped 0.8 percent.

Total sales fell 2 percent in November, to $2.48 billion from $2.53 billion a year ago.

In the third quarter, Rite Aid's same-store sales improved 1.4 percent, with pharmacy sales up 1 percent and front-end sales 2.3 percent better. That included a 1-percent decrease at Brooks Eckerd stores, where pharmacy sales slid 2.6 percent and front-end sales rose 3.7 percent.

Non-Brooks Eckerd same-store sales increased 2.6 percent, as pharmacy sales increased 3 percent and front-end sales grew 1.9 percent.

Shares of the company fell 4 cents, or 8.5 percent, to 43 cents in morning trading.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.