CAMP HILL, Pa. What a difference three months make.
Rite Aid last quarter reported wider-than-expected losses; shares were trading at much less than $1 and the common thought then was that a reverse stock split was imminent; and worries that a tighter credit market would impact the chain’s ability to clear a significant debt hurdle only 16 months away were abundant.
On Wednesday, the chain reported narrower-than-expected losses; shares are now valued at more than $1 and climbing, a feat the chain accomplished organically; and those shares climbed above $1 in part because the credit market has become much more favorable, enabling Rite Aid executives to begin implementing a planned refinancing that will push out that debt hurdle beyond 2013.
Rite Aid very well may have turned a corner in the past three months, traveling on a road with fewer potholes. The chain expects to turn Brooks/Eckerd same-store sales positive in the near-term, at least across its pharmacy base, which will mark another pretty significant turned-corner for the chain. “On the pharmacy end ... I think we’re getting very close to the crossover [into positive comps] with the Brooks/Eckerd pharmacies,” John Standley, Rite Aid president and COO, acknowledged Wednesday morning on a conference call with analysts.
In addition to the re-financing, Rite Aid has completed the rollout of its metro-market model, designed to improve performance across its metropolitan footprint, and is making progress. And the chain has optimized its SKU-base by some 10%, improved generic penetration and reduced shrink.
All of this has contributed to a posted loss of 11 cents per share, 2 cents better than analysts’ projections. Total same-store sales improved by 0.6%, and the number of prescriptions climbed 2.2%.