Despite sales drop, Rite Aid's business will see 'significant positive impact'

CAMP HILL, Pa. Rite Aid on Wednesday reported a revenue decline of 2.1% to $6.4 billion, for the first quarter ended May 29. The results reflect a move in the right direction, Rite Aid officials contended, and that momentum should build along with some of the initiatives Rite Aid currently is putting into play.

“During the quarter, we made excellent progress on our initiatives,” stated John Standley, Rite Aid president and COO, who officially took the reigns as the chain's CEO Wednesday. “We nationally launched our new Wellness+ customer loyalty program, began immunization training that will more than triple the number of Rite Aid pharmacists able to provide vaccinations and introduced the first products in our revamped private-brand program into the stores,” he said. “We expect these sales initiatives, along with the continued rollout of our segmentation strategy, to have a significant positive impact on our business long term.”

“Our team continued to improve operational efficiency to help offset the challenging economic and competitive environment impacting sales and margin,” added Mary Sammons, Rite Aid chairman and CEO. “We increased adjusted EBITDA as a percent of sales, [and] at the same time improved customer satisfaction ratings on both the front end and in the pharmacy. Our liquidity position remained strong, which is critically important if the economy continues to be slow to recover.”

Same-store sales for the quarter decreased 1% over the prior year's 13-week period, consisting of a 1.3% decrease in the front end and a 0.9% decrease in pharmacy. Pharmacy sales included an approximate 138 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores decreased 1.7% over the prior-year period. Prescription sales accounted for 68.3% of total drug store sales and third-party prescription revenue was 96.3% of pharmacy sales.

In the first quarter, the company opened two new stores, relocated eight stores, remodeled one store and closed 15 stores. Stores in operation at the end of the first quarter totaled 4,767.