Rite Aid Conference Call Highlights

Rite Aid (NYSE: RAD) reported its third quarter earnings on Thursday. Shares of the company are neutral. Below are some key highlights from its conference call:• A key highlight was our 5.4% increase in total same-store sales, which was driven by a 4.5% increase in same-store prescription count. • Continuing the trends we've seen throughout the year, our script count was fueled by higher utilization in Medicaid expansion states and the success of our various pharmacy initiatives. • We also benefited from an increase in flu shots administered during the quarter.• As we generated top line momentum, we also did a good job of managing expenses to effectively leverage our sales increase and drive gross profit. • These factors helped us to achieve net income of $104.8 million and adjusted EBITDA of $332.8 million, both of which are solid increases over the prior year period.• We've exceeded 3 million flu shots for the year and we continue to work diligently to engage our patients as we educate them about the value of this convenient health and wellness service.• Our third quarter results reflect strong script count and front-end trends, improvements in gross profit, good cost control and continued progress on our business initiatives.• Revenue for the quarter was $6.7 billion which was $335 million or 5.3% higher than last year's third quarter. The increase was primarily due to higher pharmacy sales. • Overall, same-store sales increased 5.4% in the quarter which was driven mostly by a higher pharmacy script count. • Front-end same-store sales increased by 1.6%. Pharmacy same-store sales were higher by 7.2% which included an approximate 228 basis point negative impact from new generic drugs.• Total gross profit dollars in the quarter were $122.6 million better than last year's third quarter and 42 basis points higher as a percent of revenues.• We expect free cash flow to be in a range of $325 million to $375 million for the year