Key Rite Aid revenue metric falls in February
CAMP HILL, Pa. (AP) — Revenue from established stores fell 3.6 percent last month for Rite Aid Corp., as flu-related revenue came in flat and cheaper generic drugs continued to squeeze the drugstore operator's top line.
The Camp Hill, Pa., company said Thursday that pharmacy revenue from stores open at least a year fell 4.7 percent in the five-week period that ended March 2. Revenue from the front end, or rest of the store, dropped 1.3 percent.
Revenue from stores open at least a year is considered a key indicator of retailer health because it leaves out results from locations that have opened or closed in the last year.
An increase in flu shots and flu-related prescriptions helped Rite Aid revenue climb slightly in January, as the flu season got off to a more intense start than it has in recent years. But Rite Aid said Thursday sales of over-the-counter flu treatments were flat last month, and flu-related prescriptions and shots fell slightly.
Rite Aid compared a 35-day period from this year with a 35-day period from last year, so 2012's extra day in February due to leap year did not affect the comparison, a spokeswoman said.
The company's pharmacy revenue dropped in February even though prescriptions at established stores rose slightly. Drugstores and pharmacy benefits managers, or PBMs, have taken revenue hits for several quarters now due to an increase in generic drug prescriptions.
Generic equivalents for top-selling medicines like the cholesterol fighter Lipitor hurt revenue for these companies because they are cheaper than their brand-name counterparts. But they also help earnings because they come with a wider margin between the price drugstores pay to buy them and the reimbursement they receive for doling them out.
Rite Aid's total revenue for the five-week period fell 3.7 percent to $2.46 billion.
The company's fiscal fourth quarter also ended March. 2. Total revenue for that 13-week period fell 2.4 percent to $6.43 billion.
The nation's third largest drugstore chain operated 4,623 stores as of March 2. Rite Aid trails only Walgreen Co. and CVS Caremark Corp. in terms of store totals.
Shares of Rite Aid fell 4 cents to $1.67 in midday trading, while broader trading indexes rose slightly.