Rite Aid 4th-Quarter Loss Narrows
Rite Aid Corp., the No. 3 U.S. drugstore chain, posted a narrower fiscal fourth-quarter loss Tuesday, sending its shares up 13% as investors welcomed signs of a recovery after more than two years of poor performance.
Rite Aid said its performance was helped by strong sales of prescription drugs, debt reduction and the closing of under-performing stores.
“The new management is making real progress. There’s a lot of improvement going on and I think they are gaining market share from CVS and Walgreens, [which] took market share from this company over the last two years,” said Eric Bosshard, an analyst at Midwest Research.
Rite Aid--which is emerging from a 1998 accounting scandal--said its net loss for the quarter ended March 3, 2001, was $331.7 million, or 98 cents a share, compared with a loss of $729 million, or $2.81, in the year-earlier period.
Excluding a $207-million charge for store closings and other one-time items, Rite Aid said its loss from continuing operations was $75.7 million, or 22 cents.
It gave no year-earlier figure for comparison.
Revenue rose 17% to $4.10 billion. Sales at stores open at least a year rose 11%.
Prescription drug same-store sales increased 13%, while sales of nonprescription products such as beauty aids, electronics and candy rose 7.7%.
“Our associates have made dramatic improvements in the operation of our stores as part of our turnaround plan,” said Mary Sammons, Rite Aid president and chief operating officer.
“In addition to the improvement in our operations, we are pleased by the substantial reduction in our debt,” Chief Executive Bob Miller said.
Miller is trying to pay down long-term debt of about $6 billion incurred when former management added more than 1,400 stores through six acquisitions. Rite Aid is closing less profitable stores, improving pharmacy service and cutting prices on some items.
The company plans to close 65 stores in fiscal 2002, executives told analysts.
In 2000, the company had restated its financial results $1 billion lower for 1998 and 1999 after allegations of accounting fraud led to an investigation and the hiring of a new management team.
Shares of Camp Hill, Pa.-based Rite Aid rose 95 cents to close at $8.10 on the New York Stock Exchange.
Other earnings
* Cephalon Inc.’s first-quarter loss narrowed to $11.8 million, or 28 cents a share, from $22.1 million, or 56 cents, a year ago, meeting forecasts. The year-earlier results include a charge of $7.4 million, or 19 cents a share, because of a change in accounting rules. Revenue surged 139% to $47.1 million, led by strong sales of Cephalon’s lead drug, Provigil, a narcolepsy treatment.
* Legg Mason Inc. said profit fell 26% in its fiscal fourth quarter to $37.3 million, or 55 cents a share, as sliding stock markets led to lower customer commission revenue. The results missed analysts’ consensus forecast of 60 cents. Total revenue fell 10% to $339 million.
* MetLife Inc. said first-quarter profit rose 1% to $384 million, or 49 cents a share, as higher returns from some venture capital and hedge fund investments offset a weak quarter for annuities and mutual funds and losses from storm-related car and home insurance claims. The results beat lowered forecasts by 2 cents. Revenue rose 5% to $8.1 billion.
* Midway Airlines Corp. said its first-quarter loss widened to $8.4 million, or 55 cents a share, from $7.6 million, or 88 cents a share, a year ago, as revenue rose 29% to $78.1 million.
* Mylan Laboratories Inc.’s fiscal fourth-quarter net income fell 6.1% to $42.1 million, or 33 cents a share, better than the 31 cents analysts expected, as sales of newer generic medicines helped limit the effect of higher costs. Revenue rose 16% to $248.6 million.
