(Stock price and analyst commentary added)
CAMP HILL, PA. (
health has taken a turn for the worse.
The drugstore reported yet another quarterly loss and predicted a bigger loss for the year, sending shares plunging 12% to $1.72 in afternoon trading.
During the quarter, the company recorded a loss of $116 million, or 14 cents a share, compared with a loss of $222 million, or 27 cents, in the year-ago period. Analysts expected a loss of 16 cents.
Revenue slipped to $6.32 billion from $6.5 billion, while same-store sales slipped 1.1%.
Rite Aid lowered its full-year forecast. It now expects to lose between 48 cents and 74 cents a share. The company cited a continued weak economy and high unemployment, which hurt non-pharmacy items like cosmetics and hair care.
Analysts predict the company will lose 47 cents for the year.
Shares of the company hit a 52-week high last week of $2.35.
It's easy to say Rite Aid's dismal outlook is a product of the economy. But rival
, by comparison, is holding its own.
"Walgreen has been proactive in dealing with the economy," Toon van Beeck, analyst at IBISWorld, says.
The company's Customer Centric Retailing initiative is designed to helped attract and retain customers, while its Rewiring for Growth cost-cutting plan is geared to save Walgreen $1 billion by 2011.
While Rite Aid has cut exepenses, in part by closing 100 stores, there is still more fat to be trimmed, van Beeck says.
Van Beeck predicts it will take at least one to two years before Rite Aid will recover. "They really need to initiate some big strategies," he says. "They are in for a couple of years of pain."
Walgreen plans to release its quarterly report on Sept. 29.
-- Reported by Jeanine Poggi in New York
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