Rite Aid Rises to Five-Year High After Boosting ForecastMinsi Chung
Rite Aid Corp., 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.