AM 720 KDWN
News, Traffic, Weather

Another profitable quarter, Rite Aid breaks out

KDWN

Rite Aid has left the recovery ward and appears ready to break into a sprint after booking its sixth straight quarterly profit and making a deal to strengthen the drugstore chain’s foothold in the burgeoning health clinic market.

Shares that had slumped below $1 by late 2012 soared above $7 Thursday morning after the retailer topped Wall Street expectations for the fourth quarter.

Rite Aid said that it acquired RediClinic, which runs 30 retail health clinics in or next to grocery stores in Texas, and it plans to add about 70 more over the next couple of years, including some in Rite Aid’s existing drugstores.

Grocery stores, big retailers and Rite Aid competitors Walgreen Co. and CVS Caremark Corp. have built hundreds of clinics inside their stores in recent years as they push to provide more health care services. These clinics can bring in pharmacy business and customers seeking immunizations, treatment for relatively minor ailments and, in some cases, help with chronic conditions.

While this clinic boom developed, Rite Aid was busy closing underperforming stores and cleaning up a balance sheet heavy with debt from its purchase of Brooks Eckerd drugstores nearly seven years ago.

The company now appears ready to start catching up on clinics, a year after booking its first annual gain since 2007.

Drugstores are expanding their health care offerings as they vie for more business from both aging baby boomers with growing health needs and millions of people who are expected to gain health insurance coverage under the health care overhaul. Aside from clinics, they also are offering more vitamins, food and healthy living products

Rite Aid also is installing a new wellness theme in its locations. The store format, which the company introduced in 2011, offers more organic food and natural personal care products and a line of home fitness equipment that Rite Aid helped design.

Those stores have employees with iPads who can look up information on vitamins, find and print coupons, or enroll customers in services like automated pharmacy refills. Rite Aid said Thursday that it now has 1,215 wellness stores.

Rite Aid Chairman and CEO John Standley told analysts during a Thursday morning conference call that the remodeled stores will continue to be a key part of the company’s strategy, but it also is starting to consider relocations and new stores.

Rite Aid has 4,600 stores in 31 states, compared to 8,200 operated by Walgreen, the nation’s largest drugstore chain.

For the fourth quarter, Rite Aid earned $56.7 million, or 6 cents per share. That beat average analyst projections by 2 cents, according to FactSet.

It also represented a 54 percent drop from the previous year’s final quarter, when Rite Aid benefited from a “last-in-first-out,” or LIFO, inventory credit of more than $175 million. That compares with a $44.1 million charge in the recent quarter.

LIFO is an accounting method for inventory that assumes a company sells its newest inventory first, and takes a credit or charge according to anticipated inflation.

Revenue of $6.6 billion in the quarter that ended last month also edged out analyst expectations.

Rite Aid shares jumped more than 13 percent, or 84 cents, to $7.24 Thursday morning, while the Standard & Poor’s 500 index fell slightly. That continued a tear the stock has been on since last year, when the shares more than tripled in value.

Another profitable quarter, Rite Aid breaks out

KDWN

Rite Aid is out of the recovery ward and appears ready to break into a sprint after booking its sixth-straight quarterly profit and announcing an acquisition that aims to strengthen the drugstore chain’s foothold in the burgeoning health care market.

Shares, which had slumped below $1 by late 2012, soared before markets opened Thursday after the retailer topped Wall Street expectations for the fourth-quarter.

The company earned $56.7 million, or 6 cents per share, in the quarter that ended March 1. That beat average analyst projections by 2 cents, according to FactSet.

It also represented a 54 percent drop from the previous year’s final quarter, when it benefited from a “last-in-first-out,” or LIFO, inventory credit of more than $175 million. That compares to a $44.1 million charge in the recent quarter.

LIFO is an accounting method for inventory that assumes a company sells its newest inventory first, and takes a credit or charge according to anticipated inflation.

Revenue of $6.6 billion in the quarter that ended last month also edged out analyst expectations.

Rite Aid Corp. also said Thursday that it acquired RediClinic, which runs retail health clinics in or next to grocery stores in Texas. The company plans to expand the 30-clinic chain and add some to its existing stores.

Rite Aid, based in Camp Hill, Pa., runs about 4,600 drugstores in 31 states and the District of Columbia, ranking it third in size behind Walgreen Co. and CVS Caremark Corp.

A year ago, the company booked its first annual gain in six years. It has working aggressively to clean up its performance, closing underperforming stores and installing a new wellness theme in others. The stores, which Rite Aid introduced in 2011, offer more organic food and natural personal care products and a line of home fitness equipment that Rite Aid helped design.

Employees are now equipped with iPads to look up information on vitamins, find and print coupons, or enroll customers in services like automated pharmacy refills.

Walgreen and CVS also are pushing health care as drugstores vie for more business from both aging Baby Boomers with growing health needs and millions of people who are expected to gain health insurance coverage under the health care overhaul.

Rite Aid shares had climbed more than 10 percent, or 65 cents, to $7.05 less than an hour before markets opened Thursday. That continued a tear the stock has been on since last year, when the shares more than tripled.

Another profitable quarter, Rite Aid breaks out

KDWN

Rite Aid is out of the recovery ward and appears ready to break into a sprint after booking its sixth-straight quarterly profit and announcing an acquisition that aims to strengthen the drugstore chain’s foothold in the burgeoning health care market.

Shares, which had slumped below $1 by late 2012, soared before markets opened Thursday after the retailer topped Wall Street expectations for the fourth-quarter.

The company earned $56.7 million, or 6 cents per share, in the quarter that ended March 1. That beat average analyst projections by 2 cents, according to FactSet.

It also represented a 54 percent drop from the previous year’s final quarter, when it benefited from a “last-in-first-out,” or LIFO, inventory credit of more than $175 million. That compares to a $44.1 million charge in the recent quarter.

LIFO is an accounting method for inventory that assumes a company sells its newest inventory first, and takes a credit or charge according to anticipated inflation.

Revenue of $6.6 billion in the quarter that ended last month also edged out analyst expectations.

Rite Aid Corp. also said Thursday that it acquired RediClinic, which runs retail health clinics in or next to grocery stores in Texas. The company plans to expand the 30-clinic chain and add some to its existing stores.

Rite Aid, based in Camp Hill, Pa., runs about 4,600 drugstores in 31 states and the District of Columbia, ranking it third in size behind Walgreen Co. and CVS Caremark Corp.

A year ago, the company booked its first annual gain in six years. It has working aggressively to clean up its performance, closing underperforming stores and installing a new wellness theme in others. The stores, which Rite Aid introduced in 2011, offer more organic food and natural personal care products and a line of home fitness equipment that Rite Aid helped design.

Employees are now equipped with iPads to look up information on vitamins, find and print coupons, or enroll customers in services like automated pharmacy refills.

Walgreen and CVS also are pushing health care as drugstores vie for more business from both aging Baby Boomers with growing health needs and millions of people who are expected to gain health insurance coverage under the health care overhaul.

Rite Aid shares had climbed more than 10 percent, or 65 cents, to $7.05 less than an hour before markets opened Thursday. That continued a tear the stock has been on since last year, when the shares more than tripled.