Rite Aid Advances After Boosting Profit Forecast
Rite Aid Corp. (RAD), the third-largest U.S. drugstore chain, gained the most in more than three years after forecasting better full-year results and returning to a profit in the third quarter.
Rite Aid rose 16 percent to $1.21 at the close in New York for the biggest gain since August 2009. The Camp Hill, Pennsylvania-based company’s shares have lost 4 percent this year.
The retailer, which operates more than 4,600 stores in 31 states, cited strong prescription growth and higher pharmacy gross margin from the introduction of new generic medications in its fiscal third quarter ended Dec. 1.
“We have reached a significant milestone in our turnaround efforts by returning to profitability,” Chief Executive Officer John Standley said in a statement.
The chain forecast a net loss of 5 cents a share to net income of 3 cents for fiscal 2013, according to the statement. Rite Aid had previously projected a net loss of 23 cents to 9 cents a share. That compared to an average estimate for a loss of 15 cents, according to data compiled by Bloomberg.
The pharmacy retailer also said today that third-quarter net income was $61.9 million, or 7 cents a share, compared with a loss of $52 million, or 6 cents, last year as front-end sales and prescription counts increased.
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