Rite Aid suffers losses, expects flat performance in fiscal 2011

CAMP HILL, Pa. Rite Aid revenues dropped 2.4% for its fiscal year ended Feb. 27, the chain reported Wednesday morning, reaching revenues of $25.7 billion and posting a net loss of $506.7 million. Rite Aid attributed the revenue decline to 121 fewer stores and a drop in same-store sales.

"It was a difficult [fourth] quarter with continued weak consumer demand, a weaker cough, cold and flu season than last year and continued pressure on pharmacy reimbursement," stated Mary Sammons, Rite Aid chairman and CEO. "But our team did a good job of improving front-end margins and holding tight on expenses. Thanks to our working capital initiatives, we moved into the new fiscal year with a strong liquidity position."

For fiscal 2011, which started in March, Rite Aid is projecting relatively flat performance, with sales falling between $25.2 billion and $25.6 billion and same-store sales ranging between a 1% decline and a 1% increase. Net loss for fiscal 2011 is expected to be between $355 million and $570 million.

Same-store sales for the year decreased 0.9%, consisting of a 2.9% front-end same-store sales decrease and a 0.1% increase in pharmacy same store sales. The number of prescriptions filled in same stores increased 0.8%. Prescription sales accounted for 67.9% of total revenue, and third party prescription revenue was 96.2% of pharmacy sales.

For the year, the company opened 17 new stores, relocated 41 stores, remodeled eight stores and closed 138 stores. Stores in operation at the end of the year totaled 4,780.