Rite Aid pares 4Q loss without write-down
NEW YORK - March 31, 2010 -- Drugstore chain Rite Aid Corp. said Wednesday it cut its fourth-quarter loss compared to a year ago, when it took a $1.81 billion write-down.
However, shares slid in premarket trading after Rite Aid forecast weaker-than-expected results for the current year.
The Camp Hill, Pa., company lost $210.6 million, or 24 cents per share, in three months ended Feb. 27. That compares with $2.3 billion, or $2.67 per share, a year ago. Revenue fell 4 percent to $6.46 billion from $6.71 billion as the company continued to close stores.
Thomson Reuters says analysts expected a smaller loss of 19 cents per share and revenue of $6.49 billion.
"It was a difficult quarter with continued weak consumer demand, a weaker cough cold and flu season than last year and continued pressure on pharmacy reimbursement," said Chairwoman and CEO Mary Sammons.
Rite Aid said it made smaller profits on sales of new generic drugs and lower reimbursement rates. Sales at stores open at least one year declined 2.4 percent.
A year ago, with its share price plunging, Rite Aid wrote down the value of its assets by $1.81 billion. That included a $1.2 billion write-down on the value of the Brooks Eckerd drugstore chain. The company bought 1,850 Brooks Eckerd stores for $2.36 billion in June 2007, but sales at those stores have remained weak.
Rite Aid lost $515.6 million, or 59 cents per share, in fiscal 2010. That was down from $2.94 billion, or $3.49 per share, in fiscal 2009. Its sales fell 2 percent to $25.67 billion from $26.29 billion. Sales at stores open at least one year slipped 0.9 percent.
The company has closed almost 300 stores over the last two years, including 22 during the fourth quarter, and operated 4,777 at March 27.
The company's fiscal 2011 outlook was about in line with analyst estimates. Rite Aid said it expects to post a loss of $355 million to $570 million, or 41 cents to 65 cents per share. Revenue was forecast at $25.2 billion to $25.6 billion. Analysts expect a loss of 36 cents per share and $25.8 billion in revenue.
At stores open at least a year, sales will could grow as much as 1 percent or fall as much as 1 percent, the company said.
Rite Aid said its forecasts are based on current trends, including a weak economy, high unemployment, and investments in a new customer rewards program. It did not announce any plans on store closings.
Shares of Rite Aid changed hands at $1.52 in premarket trading, down 10 percent from Tuesday's close.
rite aid, business/finance
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