Rite Aid Earnings Call Summary: Weak Earnings, Improving Sales

Rite Aid

RAD

hosted its conference call this morning after the drugstore chain missed consensus expectations with its earnings. The call supported Rite Aid's expectations for a stronger future.Shares of Rite Aid fall 3.49 percent by the days close.

Highlights from the call:

Positive comps fors same-store sales and prescription count.
Same-store sales increased by 3.1 percent in the quarter. Pharmacy same-store sales increased by 4.6 percent, including roughly 1.43 percent negative impact from new generic drugs compared to 4.5 percent negative impact from new generic drugs Q1 2013. Pharmacy same-store comp scripts increased by 2.3 percent due to effective utilization in medicaid expansion states. Full year same store sales for 2015 are projected to increase by 2.5 percent to 4.5 percent.
Expand health care alliance by partnering with Penn State Hershey Health System in Hershey Pennsylvania.
Begging to test Fresh Day Caf serving coffee, pastries, breakfast sandwiches, Rite Aid's ice cream.
Adjusted EBITDA for Q1 2014 was $282.6 million, $62.2 million less than Q1 2013's $344.8 million.
Private brand penetration increasing 31 basis points.
Revenue of $6.5 million for Q1 2014, 2.7 percent higher from Q1 last year.
Net income decreased more than double from Q1 2013, currently at $41.4 million or $0.04 per diluted share compared to Q1 2013's $89.7 million or $0.09 per diluted share.
Pharmacy gross profit dollars and margins were lower due to lower generic cost from delays in realizing the level of generic price reductions expected from its purchasing arrangement.
Expectations for the second half of fiscal 2015 to be better than the first due to generic drug releases.
Opening only one new store, with 19 relocations, remodel 450 Wellness stores, and close a total of 40 stores including lease expirations.

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Rite Aid Earnings Call Summary: Weak Earnings, Improving Sales