American Express Announces Coalition Loyalty Program with Retailers

American Express announced a new coalition loyalty program, called Plenti. Macy’s, Rite Aid, ExxonMobil and other major companies are joining American Express for this new  offering not previously available to U.S. shoppers.

Shoppers can earn points when they make purchases with participating retailers, and then those points are good for savings at all of those stores. A customer could purchase a cream and lipstick at Rite Aid and then redeem those points to get savings when buying a dress at Macy’s. They can get points paying a cell phone bill with AT&T and then get a discount at their ExxonMobil gas station.

Participating companies believe this will be more attractive to consumers because it is flexible. Although the Plenti program will be operated by American Express, shoppers can use any form of payment as they earn or redeem their points.

American Express is selecting only one participant in every industry; there will not be multiple department stores or gas stations. Retailers will not get access to one another’s consumer data. If a consumer purchases an item at Rite Aid, Macy’s will not know about that purchase. Each participating brand will have control over how consumers accumulate points in their stores.

“Consumers today are busy and smart. They know good value, and they want to be rewarded for the dollars they spend day-in and day-out at their favorite stores,” said Martine Reardon, chief marketing officer at Macy’s. “Plenti will offer customers everyday opportunity to earn and to redeem those points with much more choice.”

Resource: Washington Post

Rite Aid Sales Surge 5.3%

January 5, 2015

Rite Aid Corp. says sales at stores open at least a year grew 5.3% in December, boosted again by strengthening pharmacy sales.

Same-store sales at the Camp Hill, Pennsylvania-based retailer grew 5.3% to $2.2 billion, beating analyst consensus of 4.5% and reflecting a 1.7% increase in front-end same-store sales and a 7.3% increase in pharmacy same-store sales.

"The front-end comp of 1.7% outpaced consensus of 1.2% and represents the strongest two-year trend since last January," noted Ed Kelly, Credit Suisse research analyst.  "Flu-related OTC helped and Wellness remodels are likely a tailwind impact could ramp over time as a higher proportion of the store base is remodeled.  The pharmacy comp beat as wellk, as sales rose 7.3% vs. consensus of 6.3%, although generic impact markedly decelerated sequentially due to the lapping of Cymbalta."

Prescription count at comparable stores increased 5.1% over the prior year period.  Prescription sales accounted for 64.8% of drug store sales, and third party prescription sales represented 97.6% of pharmacy sales.

Same-store sales for the 43 week period ended December 27, 2014 increased 4.3% over the prior-year period.  Front-end same-store sales increased 1% while pharmacy same-store sales increased 5.9%.  Prescription count at comparable stores increased 3.6% over the prior-year period.

Total drug store sales for the 43 week period increased 3.9% with sales of $21.8 billion.  Prescription sales represented 68.6% of total drug store sales, and third party prescription sales represented 97.5% of pharmacy sales.

Source: Retailing Today 

Rite Aid Sales Climb In September

October 2, 2014

Rite Aid reported $2 billion in sales for the four weeks ended September 27, representing a 4.5% increase over the comparable yer-ago period.

Same-store sales increased 5.1% over the prior-year period, including a 2.3% lift in front-end same-store sales and growth of 6.3% in pharmacy and comparable sales.  Pharmacy same-store  sales included an approximate 225 basis points negative impact from new generic introductions.  Prescription count at comparable stores increased 4.4% over the prior-year period.

Prescription sales accounted for 69.5% of drug store sales, and third party prescription sales represented 97.6% of pharmacy sales.

Year-to-date, same-store sales for the 30 week period ended September 27 increased 3.8% over the prior-year period.  Front-end same-store sales increased 0.8% while pharmacy same-store sales increased 5.2%.  Prescription count at comparable stores increased 3.2% over the prior-year period.

Total drug store sales for the 30 weeks ended September 27 increased 3.3% with sales of $14.9 billion.  Prescription sales represented 68.7% of total drug store sales.

Source: Retailing Today

Rite Aid Revises Guidance In Second Quarter

September 18, 2014

Solid same store sales growth at Rite Aid caused second quarter profits to surge but looming pressure on pharmacy margins prompted the company to reduce its full year outlook.

Rite Aid reported revenues of $6.5 billion for its second quarter ended August 30, representing a 3.9% lift credited to rising pharmacy same-store sales.  Rite Aid revised its year-end guidance, however, based on anticipated lower pharmacy margins going forward.

"In the second quarter, our team of dedicated Rite Aid associates worked together to execute our strategy and deliver results that reflect growth in net income and adjusted EBITDA and significant increases in same-store sales and prescription count," stated Rite Aid chairman and CEO John Standley.  "Heading forward, while we believe that our key initiatives will continue to drive top-line growth, we are revising our guidance based on lower than anticipated pharmacy margin in the second half of fiscal 2015.  As we navigate these headwinds, we will remain focused on growing our business, generating continued operational efficiencies and positioning our associates to deliver a consistently outstanding experience for our customers."

Same-store sales for the quarter increased 4.1% over the prior year, consisting of a 1.1% increase in front-end sales and a 5.6% increase in pharmacy sales.  Pharmacy sales included an approximate 199 basis point negative impact from new generic introductions.  The number of prescriptions filled in same stores increased 3.7% over the prior year period.

Prescription sales accounted for 68.8% of total drug store sales, and third-party prescription revenue was 97.5% of pharmacy sales.

Net income was $127.8 million or $0.13 per diluted share compared to last year's second quarter net income of $32.8 million or $0.03 per diluted share.  The improvement in net income resulted primarily from an increase in adjusted EBITDA, a lower LIFO charge due to pharmacy inventory reductions and a $62.2 million loss on debt retirement in the prior year, partially offset by higher income tax expense.

Adjusted EBITDA was $364.2 million or 5.6% for the second quarter compared to $341.6 million or 5.4% of revenues for the like period last year.  Adjusted EBITDA improved due to an increase in front-end and pharmacy gross profit, partially offset by an increase in selling, general and administrative expenses related to the company's higher level of sales.

The improved pharmacy gross profit was driven by the increase in pharmacy revenues and the impact on inventory valuation related to the company's transition to its new drug purchasing and delivery arrangement with McKeeson, partially offset by lower reimbursement rates.  The net effect on inventory valuation resulting from the transition to the outsourced McKesson arrangement is not expected to be material to fiscal 2015 results, but did increase gross profit, adjusted EBITDA and pre-tax income by approximately $40 million in the second quarter.

In the second quarter, the company relocated 5 stores, remodeled 117 stores and expanded 1 store, bringing the total number of wellness stores chainwide to 1,433.  The company also opened 1 store and closed 10 stores, resulting in a total store count of 4,572 at the end of the second quarter.

Based upon current estimates for reimbursement rates and anticipated lower profitability from new generics and generic drugs that recently lost exclusivity, the company is expecting decreases in pharmacy margin in the second half of fiscal 2015 as compared to its prior estimates and therefore is lowering its guidance for adjusted EBITDA, net income and net income per diluted share.  Adjusted EBITDA is expected to be between $1.2 billion and $1.275 billion.  Net income is expected to be between $223 million and $333 million and income per diluted share between $0.22 and $0.33.  The company is also narrowing guidance for sales and same-store sales.  Sales are expected to be between $26 billion and $26.3 billion and same-store sales to range from an increase of 3% to an increase of 4% over Fiscal 2014.  Capital expenditures are expected to be approximately $525 million.

Source: Retailing Today

Rite Aid Sees Lift In August Sales

September 4, 2014

Rite Aid reported a 3.2% lift in sales for the 26 weeks ended August 30, ringing in $12.9 billion.

Same-store sales for the period increased 3.6% over the prior-year period.  Front-end same store sales increased 0.6%, while pharmacy same store sales increased 5.1%.  Prescription count at comparable stores increased 3% over the prior-year period.

Prescription sales represented 68.6% of total drug store sales for the 26 week period, and third party prescription sales represented 97.5% of pharmacy sales.

Same-store sales for the 13 week period ended August 30 increased 4.1% over the prior-year period.  Front-end same store sales increased 1.1% while pharmacy same store sales increased 5.6%.  Prescription count at comparable stores increased 3.7% over the prior-year period.

Total drug store sales for the 13 week period increased 3.7% with sales of $6.5 billion.  Prescription sales represented 68.8% of total drug store sales.

Rite Aid posted sales of $2.5 billion for the five weeks ended August 30, representing a 3.7% lift.  Same-store sales increased 3.9% over the prior-year period.  August front-end same-store sales increased 1.1%.  Pharmacy comparable sales, which included an approximate 219 basis points negative impact from new generic introductions, increased 5.2%.  Prescription count at comparable stores increased 3.7% over the prior-year period.

Prescription sales accounted for 69.3% of drug store sales.

Source: Retailing Today 

Walgreens And Rite Aid Looking Good In June

July 3, 2014

June was a good month for two of the nation's largest drugstore operators.  Walgreens reported sales of $6.3 billion for the month, an increase of 8.9% as compared to the same month in fiscal 2013, while Rite Aid realized a 3.9% same-store sales increase for the four weeks ended June 28.

Total front-end sales at Walgreens increased 1.6% in June compared with the same month in fiscal 2013, while comparable store front-end sales increased 1.3%.  Customer traffic in comparable stores decreased 2% while basket size increased 3.3%.

Prescriptions filled at comparable stores increased by 7.3% in June and increased 4.7% on a calendar day-shift adjusted basis.  June 2014 had one additional Monday and one fewer Saturday compared with June 2013.  These calendar shifts positively impacted prescriptions filled at comparable stores by 260 basis points.

June pharmacy sales increased by 13.4%.  Comparable store pharmacy sales increased 11.3% and increased by a calendar day-shift adjusted 6.7%.  Calendar day-shift adjusted comparable store pharmacy sales were negatively impacted by 140 basis points due to generic drug introductions in the last 12 months.  Pharmacy sales accounted for 65.2% of total sales for the month.

Sales in comparable stores increased by 7.5% in June.  Calendar day shifts positively impacted total comparable sales by 170 basis points.  Generic drug introductions in the last 12 months negatively impacted total comparable sales by 90 basis points.

Calendar 2014 year-to-date sales for the first six months were $38.1 billion, an increase of 5.9%.  Fiscal 2014 year-to-date sales for the first 10 months were $63.7 billion, an increase of 6%.

Walgreens opened 15 stores during June, including three relocations and closed 13.  Nearly all of the June store closings were part of the company's previously announced efforts to optimize its asset base by closing a total of 76 drug stores.

Meanwhile, Rite Aid saw June front-end same-store sales increase 0.9%.  Pharmacy same-store sales, which included an approximate 169 basis points negative impact from new generic introductions, increased 5.4%.  Prescription count at comparable stores increased 3.5% over the prior-year period.

Total drug store sales for the four-week period increased 3.5% to $2 billion.  Prescription sales accounted for 68.4% of drug store sales, and third party prescription sales represented 97.5% of pharmacy sales.

Same-store sales for the 17-week period ended June 28 increased 3.3% over the prior-year period.  Front-end same store sales increased 0.2% while pharmacy same store sales increased 4.6%.  Prescripion count at comparable stores increased 2.6% over the prior-year period. 

Total drug store sales for the 17 weeks ended June 28, 2014 increased 2.8% with sales of $8.4 billion.  Prescription sales represented 68.4% of total drug store sales and third party prescription sales represented 97.4% of pharmacy sales.

Source: Retailing Today 

Rite Aid Delivers 'Strong' Fourth Quarter, Acquires RediClinic

April 10, 2014

In the wake of acquiring Houston-based RediClinic, Rite Aid reported revenues of $6.6 billion for the fourth quarter ended March 1, resulting from a 2.2% lift primarily attributed to an increase in pharmacy same-store sales.

For the full year, Rite Aid reported $25.5 billion in revenues, up 0.5%.

For the quarter, the company reported net income of $55.4 million or $0.06 per diluted share, and adjusted EBITDA of $356.3 million, or 5.4% of revenues.  For the full year, Rite Aid reported net income of $249.4 million or $0.23 per diluted share, and adjusted EBITDA of $1.3 billion, or 5.2% of revenues.

"Thanks to the strong teamwork of our dedicated Rite Aid associates, we delivered strong fourth-quarter and fiscal 2014 results, including new company records for fourth-quarter and full-year adjusted EBITDA," stated Rite Aid chairman and CEO John Standley.  "These accomplishments reflect the significant progress we're making in executing key initiatives and delivering on our promise to actively work with our customers to keep them well," he said.  "Our recent acquisitions of Health Dialog and RediClinic, our expanded partnership with McKesson and our continued commitment to investing in our store base have positioned us to transition our strategy from turnaround to growth as we more aggressively pursue opportunities to become a growing retail healthcare company."

Same-store sales for the quarter increased 2.1% over the prior year, consisting of a 3.5% increase in pharmacy sales, partially offset by a 0.7% decrease in front-end sales.  Pharmacy sales included an approximate 123 basis point negative impact from new generic introductions.  The number of prescriptions filled in same stores decreased 1.8% over the prior year period, with 1.3% of this decrease being driven by a decrease in flu-related prescriptions and flu shots.  Prescription sales accounted for 67.5% of total drug store sales, and third party prescription revenue was 97.1% of pharmacy sales.

In the fourth quarter, the company relocated two stores, remodeled 94 stores and expanded three stores, bringing the total number of wellness stores chainwide to 1,215.  The company also closed eight stores, resulting in a total store count of 4,587 at the end of the fourth quarter.

Comparable sales for the year increased 0.7% consisting of a 1.2% increase in pharmacy sales, partially offset by a 0.2% decrease in front-end sales.  Pharmacy sales included an approximate 232 basis point negative impact from new generic introductions.  The number of prescriptions filled in same stores decreased 0.3% over the prior year period.  Prescription sales accounted for 67.9% of total drugstore sales, and third party prescription revenue was 97% of pharmacy sales.

For the year, the company relocated 11 stores, acquired one store, remodeled 405 stores, expanded four stores and closed 37 stores.

Rite Aid said it expects sales for fiscal 2015 to be between $26 billion and $26.5 billion with same-store sales expected to range from an increase of 2.5% to an increase of 4.5% over fiscal 2014.

The company's outlook for fiscal 2015 is based on the anticipated benefits of its wellness remodels, customer loyalty program, new pharmacy sourcing arrangement with McKesson and other initiatives to grow sales and drive operational efficiencies.  The company's outlook also considers planned wage and benefit increases, the introduction of new generics in the second half of fiscal 2015, generic drug price increases and a challenging reimbursement rate environment.

Capital expenditures are expected to be approximately $525 million.  This number does not include the purchases of Health Dialog or RediClinic, Rite Aid noted.

Source: Retailing Today