Rite Aid Spikes as it Narrows Loss

(Rite Aid article updated with stock price and additional information on Rite Aid earnings.)

CAMP HILL, Pa. (TheStreet) -- Rite Aid(RAD) is surging after it announced thatit narrowed its loss in the third quarter, beating Wall Street's estimates.

During the quarter, the drugstore recorded a loss of $83.9 million, or 10 cents a share, compared with a loss of $243.1 million, or 30 cents, in the year-ago period. Analysts expected a loss of 18 cents a share.

This is Rite Aid's 10th consecutive quarterly loss.

The company has cut costs and refinanced debt to improve its profit, but sales, especially of front-end discretionary merchandise, remain weak.

Revenue decreased 2% to $6.35 billion from $6.47 billion, while same-store sales slipped 0.5%. Pharmacy same-store sales rose 0.4%, while front-end comparable sales fell 2.5%.

In October, Rite Aid refinanced its 2010 debt maturities, which means it has no major debt maturities until September 2012.

Looking ahead, management expects a full-year loss in the range of 50 cents to 66 cents a share, in-line with analysts' guidance of a loss of 57 cents. The company previously forecast a loss between 48 cents and 74 cents a share.

Shares of Rite Aid are soaring 13.5% to $1.51 in morning trading.

-- Reported by Jeanine Poggi in New York.

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