Rebound Resumes at Rite Aid

Rite Aid's RAD turnaround took another step forward on Thursday, as the company turned a year-ago loss into a profit and raised guidance for next year.

Investors responded positively to the company's report. Shortly before 11 a.m. EST, Rite Aid shares were up 17 cents, or 2.8%, to $6.23.

In its quarter ended Nov. 29, the drugstore chain earned $14.4 million, or 3 cents a share. In the year-ago period, the company lost $23.8 million, or 5 cents a share.

The company's sales rose 6% over the third quarter last year to $4.11 billion.

The results topped Wall Street's expectations. Analysts polled by Thomson First Call were expecting Rite Aid to earn 2 cents a share on $4.10 billion in sales.

For its full fiscal year, Rite Aid expects its results to range from a net loss of $13 million to net income of $15 million on sales of $16.5 billion to $16.7 billion. The company did not provide per-share earnings guidance, but assuming its share count remains the same at 515 million, the guidance implies full-year results ranging from a net loss of 3 cents a share to net income of 3 cents a share.

Considering the company has lost 8 cents a share in the year to date, the guidance also implies that the company expects to earn between 5 cents and 11 cents a share in its fourth quarter on sales ranging from about $4.3 billion to $4.5 billion. Wall Street had projected the company would earn 8 cents a share in the current quarter -- the midpoint of Rite Aid's range -- on sales of $4.38 billion.

For 2005, the company forecast that it will earn $112 million to $157 million -- about 22 cents to 30 cents a share, given its current share count -- on sales of $17.4 billion to $17.6 billion. The consensus of analysts was that the company would earn 21 cents a share on sales of $17.6 billion.

Same-Store Success

Solid sales at its older stores helped Rite Aid turn around its third-quarter results from the year-ago period.