Drugstore operator Rite Aid Corp., of Camp Hill, said Thursday its fiscal third-quarter loss narrowed, but revenue slipped as a slower start to the cold and flu season hurt performance and it again lowered its full-year forecast.
The company said the number of prescriptions filled at stores open at least a year fell 1.7 percent compared to last year, when swine flu cases helped drive sales. Sales in the rest of the store were flat but saw a boost in November due to a new card-based customer rewards discount program.
Overall, Rite Aid lost $81.5 million, or 9 cents per share, after paying preferred dividends in the quarter that ended Nov. 27. That compares to a loss of $86.1 million, or 10 cents per share, in the same quarter last year. Revenue fell 2 percent to $6.2 billion.
Analysts polled by Thomson Reuters expected, on average, a loss of 13 cents per share on about $6.2 billion in revenue.
Revenue from stores open at least a year dropped 1.3 percent compared to the same quarter last year. This is a key indicator of a retailer's health because it excludes sales at stores that open or close during the year.
The company's total costs and expenses also fell, as Rite Aid trimmed selling, general and administrative expenses 2 percent to about $1.58 billion.
Rite Aid said adjusted earnings before income taxes, depreciation and amortization, or EBITDA, was hurt by a $29.5 million increase in workers' compensation and general liability self insurance expense.
CEO John Standley said the quarter fell below the company's expectations.
"Even though we will not achieve our sales and EBITDA goals . . . we remain encouraged by the progress we are making and believe we have invested in the right strategies for future revenue and earnings growth," Standley said during a Thursday morning conference call with analysts.
He noted that Rite Aid has administered 635,000 flu shots this year, compared to 157,000 last year, and 30 percent of those shots were given to new pharmacy customers. Standley said they expect that business to continue to grow, and he noted that it gives the company a chance to increase prescriptions by administering other vaccines for illnesses like shingles and whooping cough.
But Rite Aid also said revenue from stores open at least a year will be softer than expected in the fourth quarter. It now expects a net loss of between 60 cents and 74 cents per share for fiscal 2011 on revenue of $25 billion to $25.2 billion. In September, the company said it expected a loss of between 46 cents and 67 cents per share, which was greater than a previous forecast.
Analysts expect, on average, a loss of 57 cents per share on $25.19 billion in revenue.
Rite Aid is the third largest drugstore chain in the U.S. behind Walgreen and CVS. It opened one store, relocated 11 and closed 17 during the quarter. That left Rite Aid with a total of 4,731.