Rite Aid Q1 profit drops on costs; sales rise
Camp Hill, Pa. – Rising drug costs and falling reimbursements, as well as higher income tax expense, significantly cut into profits at Rite Aid Corp. Net income dropped 55% to $41.4 million in the first quarter, from $91 million in the year-ago period. Its earnings matched analysts’ expectations.
Improving pharmacy sales helped drive a 3% increase in revenue to $6.47 billion from $6.29 billion, above Wall Street projections. Same-store sales rose 3.1%. Rite Aid maintained its fiscal 2015 earnings and revenue predictions.
“In the first quarter, we delivered a strong store operating performance, highlighted by increases in same-store sales and same-store prescription count,” said Rite Aid chairman and CEO John Standley. “As we work through managing the higher-than-expected drug costs and reimbursement rate pressure that affected our financial results for the quarter, we remain focused on executing our strategy to expand our health care offering and transform Rite Aid into a growing retail health care company.”
Alco net loss widens on taxes; CFO departs
Coppell, Texas – Alco Stores Inc. reported a net loss of $8.1 million in the first quarter of its fiscal year, up from a loss of $1.7 million in the year-ago period, amid an elimination of a tax benefit. The company also announced its CFO has left the company.
Net sales decreased 4.1% to $104.7 million, compared to $109.2 million in the first quarter of fiscal 2014. Same-store sales, excluding fuel centers, decreased 7.1%. Alco president and CEO Richard Wilson cited several ongoing initiatives as providing promise for future performance.
"While the first-quarter business environment and Alco’s performance were disappointing, we have made significant progress on several of the company’s operating initiatives,” said Wilson. “Working capital improved as a result of a $25 million reduction in first quarter inventory compared to the first quarter of last fiscal year. We increased Alco’s overall credit facility by $17.5 million and extended the term through 2019 by amending an existing credit facility with Wells Fargo. We have opened three new stores during the past nine months, whose results thus far remain very encouraging.”
Separately, Alco announced that Wayne Peterson, senior VP and CFO, has left the company. Alco has begun a search for a new CFO.
Mike Juniper, senior VP, Deloitte Transaction and Business Analytics LLP, will serve as interim CFO until a permanent replacement is named, and Brian Assmus, VP and controller of Alco, is serving as principal accounting officer.
Promotions impact Pier 1 profit
Fort Worth, Texas – Promotions took their toll on profitability at Pier Imports Inc. during the first quarter of fiscal 2015. The company reduced its earnings guidance for fiscal 2015.
Net earnings fell 25% to $15.1 million from $20.3 million in the same quarter of fiscal 2014.
Total sales for the first quarter were $419.1 million, a 6.1% increase from $394.9 million in the year-ago quarter. Same-store sales increased 6.3%, attributable to increases in total brand traffic, conversion and higher average ticket.
"The retail environment remains highly promotional and is pressuring gross profit in the near-term," said CEO Alex W. Smith. "As a result, we are adjusting our full-year earnings forecast accordingly."