June 19, 2014 at 8:26 am

Rite Aid 1Q profit drops on costs, revenue rises

A customer enters a Rite Aid store in Detroit in 2009. Rite Aid reports quarterly financial results on June 19, 2014. (Paul Sancya / AP)

Camp Hill, Pa. — Rite Aid’s fiscal first-quarter profit dropped 55 percent as it dealt with higher-than-expected drug costs and reimbursement rate reductions.

Its earnings matched analysts’ expectations while revenue was slightly above of Wall Street’s view.

Its shares fell in premarket trading Thursday. Investors had been returning to the stock — which they had pushed below $1 by late 2012 — as Rite Aid has cleaned up its balance sheet and closed underperforming stores.

For the period ended May 31, the nation’s third-largest drugstore chain reported net income attributable to common stockholders of $41.4 million, or 4 cents per share. A year earlier it earned $91 million, or 9 cents per share. Analysts surveyed by FactSet expected earnings of 4 cents per share.

Revenue for the Camp Hill, Pennsylvania, company climbed 3 percent to $6.47 billion from $6.29 billion mostly due to better sales at pharmacies open at least a year. Analysts surveyed by FactSet expected revenue of $6.44 billion.

Sales at stores open at least a year rose 3.1 percent, while sales at pharmacies open at least a year increased 4.6 percent.

This figure is a key gauge of a retailer’s health because it excludes results from locations recently opened or closed.

Rite Aid Corp. said that the number of prescriptions filled in stores open at least a year climbed 2.3 percent from a year ago. Prescription sales made up 68.4 percent of total drugstore sales, and third party prescription revenue was 97.4 percent of pharmacy sales.

The company maintained its fiscal 2015 forecast for earnings between 30 cents and 40 cents per share. Revenue is still anticipated in a range of $26 billion to $26.5 billion.

Wall Street is looking for full-year earnings of 35 cents per share on revenue of $26.19 billion.

Its shares fell 35 cents, or 4.7 percent, to $7.09 in premarket trading about an hour before the market open.

Rite Aid has 4,581 stores in 31 states and the District of Columbia.