First, quarterly sales for the three months to February beat expectations. The third-largest drugstore chain in the U.S. generated revenue of $6.6 billion. Analysts surveyed by Thomson Reuters had anticipated revenue of $6.54 billion.
Then, profits came in better than expected. Over the three-month period, Rite Aid recorded net income of 6 cents a share, 2 cents higher than consensus.
Finally, fiscal 2015 guidance met analysts' expectations. The Camp Hill, Penn.-based business said it expects sales between $26 billion and $26.5 billion with same-store sales increasing 2.5% to $4.5%. Net income is expected in the range of 31 cents to 42 cents.
For the year ending February next year, analysts had forecast earnings of 35 cents a share and revenue of $25.7 billion.
By late morning, shares had added 10.9% to $7.09. Trading volume of 64.1 million was more than triple its three-month daily average.
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, compelling growth in net income and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow."
- You can view the full analysis from the report here: RAD Ratings Report