Sept. 27 (Bloomberg) -- Rite Aid Corp., the third-biggest U.S. drugstore chain, reported a bigger second-quarter loss than analysts anticipated and forecast a wider loss for the rest of the year, sending the shares down the most in seven weeks.

The net loss grew to $69.6 million, or 10 cents a share, in the three months through Sept. 1, from $330,000, or 2 cents, a year earlier. The company also lowered its sales forecast for the year as consumer demand wanes.

The retailer was hurt by an expense of $65.2 million related to depreciation and amortization from the Brooks and Eckerd purchase and additional interest expense of $55.1 million. The chain is also seeing negative sales trends continue with the acquired stores as it works to remodel and rebrand them and compete with larger rivals Walgreen Co. and CVS Caremark Corp.

``They were overly aggressive in their sales target and they realized they are not getting there,'' said Carla Casella, a fixed-income analyst at J.P. Morgan Securities Inc. in New York.

Rite Aid, based in Camp Hill, Pennsylvania, dropped 21 cents, or 4.2 percent, to $4.84 in New York Stock Exchange composite trading at 4:05 p.m., the biggest drop since Aug. 6.

Sales increased 54 percent to $6.6 billion, the company said today in a statement.

Rite Aid completed its acquisition of Eckerd and Brooks from Jean Coutu Group Inc. for about $4 billion in June to compete with Walgreen and Caremark. The purchase makes Rite Aid the largest drug retailer on the U.S. East Coast.

The drugstore chain cut its sales forecast to $24.5 billion to $25.1 billion from an earlier estimate of $25.3 billion to $26.5 billion and now expects a loss of 15 cents to 27 cents a share, wider than the 11 cents to 23 cents loss it previously expected.

`More Cautious' Consumers

``The customer just generally speaking is a little more cautious in terms of purchasing with everything going on out there from an economy point of view,'' Chief Executive Mary Sammons said on a conference call with analysts and investors.

Sales at stores open at least a year are expected to rise 1.3 percent to 3.3 percent this year, down from an earlier estimate of 3.7 percent to 5.8 percent.

The company also reduced its target for how much the Eckerd and Brooks acquisition will add to earnings in fiscal 2009 to 12 cents to 14 cents from an earlier estimate of 18 cents to 20 cents.

The negative sales trends at the Brooks and Eckerd stores continued into the second quarter, Sammons said. The sales trends were negative in the pharmacy and front-end of the store.

Rite Aid raised its savings estimates from the purchase this year to $200 million from an earlier forecast of $155 million and for fiscal 2009 to $300 million from previous guidance of $225 million.

Integration `On Track'

The chain is ``on track'' to complete integration of the purchase in 16 months as originally forecast, Sammons said.

The retailer reiterated its forecast for earnings before interest, taxes, depreciation and amortization of $1 billion to $1.1 billion this year. Ebitda for the quarter was $261.5 million, above the $253.7 million estimate by Lisa Gill, an analyst at J.P. Morgan.

Rite Aid gained more than 1,800 stores in the agreement with Jean Coutu to add to its 3,330 locations.

The chain has said it may spend $1 billion to remodel the new stores and convert distribution centers.

Even with the addition of about 1,500 Eckerd and 300 Brooks stores, the company trails CVS's 6,200 locations and Walgreen's almost 6,000.

Sales at stores open at least a year rose 1.1 percent in the quarter, Rite Aid said earlier this month. Same-store pharmacy sales increased 1.4 percent, while sales of non- pharmacy goods such as snacks and health and beauty products added 0.6 percent.

Of the nine analysts covering Rite Aid in the past 12 months, two rate the stock ``buy,'' three say ``hold'' and four recommend selling the shares.

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net.

Last Updated: September 27, 2007 16:25 EDT