Rite Aid Reports Drops in Net Income, Sales

Rite Aid Corp. said Thursday that its fiscal first-quarter earnings and revenue fell because of higher store-closing costs and lower sales stemming from the United Auto Workers’ mail-order drug policy.

The nation’s third-largest drugstore chain also lowered its expectations for fiscal 2006. Its shares fell 44 cents to $4.11.

Net income after paying about $8 million in preferred dividends fell to $25.2 million, or 5 cents a share, from $58.3 million, or 10 cents, a year ago, the company said.

Revenue in the period ended May 28 edged down slightly to $4.22 billion from $4.24 billion last year. Sales at stores open at least a year fell 0.3%, including a 1.2% drop in prescription drug sales. Prescription sales accounted for 64% of total sales.

On Thursday, Rite Aid again lowered its earnings expectations, saying profit for fiscal 2006 is expected to be break-even to 5 cents a share on sales of $17.1 billion to $17.4 billion. Previously, the company predicted 2006 earnings of 2 cents to 7 cents a share on sales of $17.3 billion to $17.7 billion.