NEW YORK (TheStreet) -- Shares of Rite Aid Corp. (RAD) - Get Report are down by 0.35% to $8.64 in mid-morning trading on Thursday, after the retail drug store company reported an increase in its May 2015 same-store-sales that fell short of what analysts were expecting for the month.

Same store sales grew by 2.1% in May 2015, over the same period last year. However, analysts polled by Thomson Reuters had forecast for a 3% rise in same store sales. 

Rite Aid is the No. 3 drugstore chain in the U.S., behind Walgreens Co. (WBA) - Get Report and CVS Caremark (CVS) - Get Report, The Wall Street Journal reports.

The rise in the company's sales was due to growth in its pharmacy segment. For quarter ended in May the company said total drugstore sales were up by 2.8% to $6.6 billion over the same period last year.

Analysts were anticipating pharmacy sales of $6.69 billion.

On Wednesday, Rite Aid announced that it will release its fiscal 2016 first quarter earnings results before the market open on Thursday, June 18.

Separately, TheStreet Ratings team rates RITE AID CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate RITE AID CORP (RAD) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to other companies in the Food & Staples Retailing industry and the overall market, RITE AID CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • RAD's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 3.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for RITE AID CORP is currently lower than what is desirable, coming in at 30.13%. RAD has continued with the weak profit margin when compared to the same quarter of last year. Despite the mixed results of the gross profit margin, RAD's net profit margin of 26.79% significantly outperformed against the industry.
  • Net operating cash flow has declined marginally to $175.00 million or 9.85% when compared to the same quarter last year. Despite a decrease in cash flow RITE AID CORP is still fairing well by exceeding its industry average cash flow growth rate of -24.79%.
  • The debt-to-equity ratio is very high at 98.94 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.
  • You can view the full analysis from the report here: RAD Ratings Report