UFCW 324 Communications / News
Rite Aid Stands by Outlook as it Prepares for Deal
August 29, 2006 · Reuters
Rite Aid Corp. which last week said it would buy the Eckerd and Brooks drugstore chains for about $2.6 billion, on Tuesday said it is on track to meet this year's profit and sales forecasts.
Rite Aid, the third-largest U.S. drugstore chain, said it still expects sales of $17.40 billion to $17.65 billion in fiscal 2007, matching a forecast it gave in June. The company also backed its expectation to post a loss of 7 cents to a profit of 2 cents per share.
Analysts, on average, expect Rite Aid to earn 2 cents per share this year, with $17.5 billion in revenue, according to Reuters Estimates.
Rite Aid said it still expects same-store sales, a key measure that tracks sales at stores open at least a year, to rise 2 percent to 4 percent in fiscal 2007, which began in March.
The company said that its forecast assumes that the deal closes after Rite Aid's fiscal year ends on March 3, 2007. If the acquisition closes before the end of the fiscal year, the outlook may change.
Shares of Rite Aid rose 5 cents, or 1.2 percent, to $4.31 in morning trading.
Rite Aid, which stands to have 5,177 stores once it buys the U.S. Eckerd and Brooks chains from Jean Coutu Group (PJC) Inc. made its comments in slides prepared for upcoming presentations to investors.
The Camp Hill, Pennsylvania-based company stands to become the largest drugstore chain in the Eastern United States when the deal closes. At the same time, larger rivals Walgreen Co. and CVS Corp. are adding to their store lineups, especially in the middle of the country, where Rite Aid has no presence.