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Rite Aid Reports Fiscal Q4 Revenue Gains

Monday April 21st, 2014 - 10:49AM


For its fiscal fourth quarter ended March 1, Rite Aid posted net income of $55.4 million, or six cents per diluted share, versus $123.1 million, or 13 cents per diluted share, for the period a year ago. Comparable store sales increased 2.1% over the prior year, as pharmacy comps gained 3.5% and front-end comps, including general merchandising such as home goods, decreased 0.7%, the company announced.

In the fourth quarter, the company reported revenues of $6.6 billion, up 2.2% over last year's period. Prescription sales accounted for 67.5% of total drugstore sales.

In the current fiscal year quarter, net income included a LIFO charge of $44.1 million due to pharmacy inflation while prior year net income included a LIFO credit of $175.4 million resulting from generic deflation. The increase in LIFO expense was partially offset by an increase in adjusted EBITDA, no loss on debt retirement in the current year versus a $122.7 million loss on debt retirement in the prior year and decreases in interest expense and lease termination and impairment charges. With the LIFO charge excluded, current year net income was $99.5 million, or 10 cents per diluted share. With the LIFO credit and loss on debt retirement excluded, prior year net income was $70.4 million, or seven cents per diluted share.

The 10 cents per diluted share adjusted result beat a Zacks Consensus Estimate of four cents.

For the fiscal full fiscal year, net income was $249.4 million, or 23 cents per diluted share, versus $118.1 million, or 12 cents per diluted share, last year, Rite Aid noted. Comps for the year increased 0.7% as pharmacy sales gained 1.2% and front end comps slipped 0.2%, the company pointed out.

Rite Aid revenues advanced 0.5% to $25.5 billion, the company related, while prescription sales accounted for 67.9% of total drugstore sales.

Contributing to the increase in net income was a gain in Adjusted EBITDA and lower interest expense, a loss on debt retirement of $62.4 million versus $140.5 million in the year prior, and lower lease termination and impairment charges, Rite Aid asserted. Partially offsetting these improvements was a LIFO charge of $104.1 million in the current year compared to a LIFO credit of $147.9 million in the prior year. Adjusted EBITDA was $1.33 billion versus $1.13 billion in the year earlier. Increased pharmacy gross profit due to the continued benefit of generic introductions on pharmacy gross margin in the first half of the fiscal year, purchasing efficiencies on generic drugs and strong cost control drove the advance in Adjusted EBITDA, Rite Aid maintained.

During the fiscal year, the company added, Rite Aid relocated 11 stores, acquired 1 store, remodeled 405, expanded four and closed 37.