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UPDATE 1-Rite Aid loss narrows; company cuts sales view
September 20, 2012 / 2:25 PM / 5 years ago

UPDATE 1-Rite Aid loss narrows; company cuts sales view

* Loss $0.05/share vs Wall Street view loss $0.07/share

* Sees FY loss $0.09-$0.23, prior view loss $0.13-$0.29

* Shares down 4.6 percent

Sept 20 (Reuters) - Rite Aid Corp reported a smaller-than-expected quarterly loss on Thursday as cheaper generic drugs helped pharmacy gross margins, but the drugstore chain cut its full-year sales forecast.

Shares of Rite Aid, which trails larger U.S. rivals Walgreen Co and CVS Caremark Corp, fell nearly 5 percent.

Rite Aid, which is remodeling hundreds of stores and closing others, is stepping up its marketing efforts in the second half of the year to lure shoppers with its wellness+ loyalty card and by trying to give more flu shots. The push comes as Walgreen is just bringing out its loyalty card and other major chains are trying to win over shoppers with such tactics.

Rite Aid said its loss had narrowed to $38.8 million, or 5 cents a share, in the second quarter ended on Sept. 1 from $92.3 million, or 11 cents a share, a year earlier.

Analysts on average had expected a loss of 7 cents per share, according to Thomson Reuters I/B/E/S.

While lower-priced generic drugs hurt sales, they are typically more profitable for drugstores than their name-brand counterparts.

Revenue declined to $6.23 billion from $6.27 billion as the company closed stores. Sales at stores open at least a year were flat overall, with a 1.4 percent increase for general merchandise and a 0.7 percent drop at pharmacy counters.

Still, Rite Aid filled about 4 percent more prescriptions in its existing stores as it drew some of the patients who could not fill their Express Scripts Holding Co prescriptions at Walgreens stores during those companies’ now-resolved dispute.

Rite Aid said it expected a fiscal-year loss of 9 cents to 23 cents per share. In June, it had forecast a loss of 13 cents to 29 cents, and analysts were expecting a loss of 15 cents.

The company lowered its 2013 sales forecast, to a range of $25.1 billion to $25.4 billion from a June outlook of $25.3 billion to $25.7 billion. It expects same-store sales to be down 1 percent to up 0.25 percent, compared with a forecast in June of down 0.5 to up 1 percent.

Rite Aid shares were down 4.6 percent at $1.25 in morning trading.

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