Rite Aid forecasts current-quarter profit above estimates

Fri Jun 7, 2013 10:17am EDT

A Rite Aid sign is seen outside one of their stores in New York, April 11, 2013. REUTERS/Shannon Stapleton

A Rite Aid sign is seen outside one of their stores in New York, April 11, 2013.

Credit: Reuters/Shannon Stapleton

(Reuters) - Rite Aid Corp (RAD.N) forecast a current-quarter profit far above market estimates as the third-largest U.S. drugstore chain continued to sell more generic drugs, which carry higher profit margins.

The company expects first-quarter profit of between 8 to 9 cents per share, above the 4 cents analysts estimated, according to Thomson Reuters I/B/E/S.

Rite Aid, which trails Walgreen Co (WAG.N) and CVS Caremark Corp (CVS.N) in size, has been remodeling stores and emphasizing its loyalty program, while continuing to close some stores.

However, the company said fewer generic drug introductions in the back half of the fiscal year will hurt its margins.

For the full-year, the company forecast adjusted net income of between 4 to 19 cents per share. Analysts on average expect a profit of 14 cents per share.

Shares of Rite Aid were up about 3 percent at $2.98 in early morning trade on the New York Stock Exchange on Friday.

(Reporting by Aditi Shrivastava in Bangalore; Editing by Sreejiraj Eluvangal)

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