Rite Aid reported revenue of $6.4 billion for the quarter, up from $6.2 billion in the year-ago quarter. Same-store revenue increased by 2.3% during the quarter. The company reported a profit of 7 cents per share.
Despite increases in the quarter, the drugstore operator cut its per share earnings estimates for the fiscal year and raised its revenue estimates. Rite Aid now estimates earnings of 17 cents to 23 cents per share for the year on revenue between $25.3 billion and $25.425 billion. Previously the company projected per-share profit of 18 cents to 27 cents, and revenue of between $25.1 billion and $25.3 billion.
According to the Wall Street Journal, Rite Aid and competitors Walgreen's (WAG) and CVS Caremark (CVS) stand to lose revenue due to new generic drugs.
"Though generic drugs carry higher margins than branded ones," the report says, "they can hurt sales because they command lower prices."
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 revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."