Rite Aid Rises to Five-Year High After Boosting Forecast

Rite Aid Corp. (RAD), the third-largest U.S. drugstore chain, climbed to the highest in almost six years after raising its profit forecast because of increasing sales at remodeled stores.

The shares rose 23 percent to $4.58 in New York, the highest closing price since Sept. 28, 2007. Rite Aid has more than tripled this year, compared with a 21 percent gain for the Standard & Poor’s 500 Index.

Net income in the year through February will be as much as 27 cents a share, up from a previous estimate of a maximum of 16 cents, the Camp Hill, Pennsylvania-based company said today in a statement. The average of three analysts’ estimates compiled by Bloomberg was 13 cents.

Chief Executive Officer John Standley has remodeled 1,019 of Rite Aid’s more than 4,600 stores into so-called wellness centers with expanded pharmacy services and health-focused products. Same-store non-pharmacy sales at wellness centers increased, compared with a drop at the old-format stores, and prescription sales at the revamped locations grew faster as well.

Net income in the quarter ended Aug. 31 was $32.8 million, or 3 cents a share, compared with a net loss of $38.8 million, or 5 cents, a year earlier, the company said. The average estimate of four analysts surveyed by Bloomberg was for a loss of 4 cents a share.

To contact the reporter on this story: Minsi Chung in New York at mchung82@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.