Rite Aid 2Q growth offset by Brooks Eckerd weakness
CAMP HILL, Pa. Rite Aid reported revenues of $6.5 billion and a net loss of $222 million or 27 cents per diluted share for its fiscal second quarter ended Aug. 30, 2008. Solid front-end and pharmacy sales in core Rite Aid stores were offset by the expected decrease in sales at acquired Brooks Eckerd stores.
“In this tough retail environment, our core stores delivered solid performance, we made significant progress building our acquired stores’ front-end sales, we took steps to increase our financial flexibility and we largely completed the integration of Brooks Eckerd. We also improved our gross profit rate in spite of what has turned out to be a heavily promotional environment in pharmacy as well as front end,” said Mary Sammons, Rite Aid chairman, president and ceo.
Same-store sales for the quarter increased 0.6% over the prior year 13-week period, consisting of a 1.9% increase in the front end and flat same-store sales in the pharmacy.
Excluding the acquired Brooks Eckerd stores, same-stores sales for the 13-week second quarter increased 3.1% over the prior-year period with front end increasing 3.6% and pharmacy growing 2.8%.
At the Brooks Eckerd stores, same store sales for the 13-week second quarter decreased 4.1% over the prior-year period, an improvement over the first quarter’s decrease of 7.2%.
Based on current sales trends, a longer-than-expected turnaround of Brooks Eckerd pharmacy sales, economists’ forecasts for continued weakness in the economy, the closing of underperforming stores and the company’s planned cost reductions for the remainder of its fiscal year, Rite Aid has revised its fiscal 2009 guidance.
Sales are expected to be between $26 billion and $26.5 billion in fiscal 2009 with same-store sales expected to improve 1.5% to 3% over fiscal 2008. Net loss for fiscal 2009 is expected to be between $445 million and $535 million or a loss per diluted share of 56 cents to 67 cents.
FTC investigating Walgreens bid for Longs
WALNUT CREEK, Calif. Longs Drug Stores has announced that the Federal Trade Commission has requested that Longs provide the FTC with documents and information in connection with Walgreens’ unsolicited, non-binding expression of interest to acquire Longs.
In the detailed 25-page request, the FTC stated that it was investigating whether Walgreens’ proposed acquisition of Longs “may substantially lessen competition among Retail Pharmacies in various portions of California, Nevada and Hawaii.” In addition, the FTC requested information regarding several markets that had not been examined in the FTC’s previous review of the proposed Longs-CVS transaction, including Longs’ operations in Hawaii and Longs’ mail order business. The FTC may add to the request as its investigation progresses. Longs intends to cooperate in the FTC’s investigation.
Whole Foods names senior vp of purchasing
AUSTIN, Texas Whole Foods Market has promoted Michael Besancon to the newly created position of senior global vp of purchasing, distribution and marketing for the company.
Starting this week, Besancon will report directly to co-presidents and coos A.C. Gallo and Walter Robb, and will be responsible for leading the development and execution of strategies for procurement, distribution and marketing of products, which includes bringing the next generation of exciting offerings to Whole Foods Market shoppers.
Besancon served as president for the Southern Pacific region for more than seven years, overseeing operations, marketing and real estate development, profitability and financial growth for stores in Southern California, Arizona, Nevada and Hawaii.