February Frenzy at CVS, Rite Aid

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How did February treat you? Any sniffles? Fever? A touch of a stomach virus? Hopefully not, but the season for sniffles benefited certain retailers. Both CVS (NYSE: CVS) and Rite Aid (NYSE: RAD) said today that February same-store sales increased, despite the bad flu season running out of steam early.

The flu season -- meaning, the real influenza virus that made vaccination a high-profile concept -- was touted as one of the worst in recent years, but early alarms were just that, and the bug lost momentum in the last month or two.

CVS (which last month reported a busy 2003) said total February sales rose 7.3% to $2.13 billion, with same-store sales increasing 5.4% from the same period last year. Pharmacy same-store sales improved 7.5%, while sales of items in the front of the store were only up a notch, by 1%. Total pharmacy sales represented 68.9% of the company's sales for the month.

Last time I wrote about CVS, I got an earful from quite a few readers complaining about the retailer and its customer service, but so far, the numbers seem to bely any major defection to rivals like Walgreen (NYSE: WAG) or Wal-Mart (NYSE: WMT).

Meanwhile, Rite Aid also enjoyed a positive February, with same-store sales up 4.5%. Total sales rose 4.2% to $1.63 billion. Rite Aid's pharmacy same-store sales were up 4.4%, though it seems the items in the front of the store were popular as well, increasing 4.7%.

Today's upbeat February same-store sales from drugstore retailers are hardly exceptional, though. After all, rival Walgreen reported similarly positive trends last week, with same-store sales up 11.8% (of course, excluding the positive effects of the extra day leap year gave it, they were up 8.9%).

Back in January, when the CDC said the flu was winding down, investors wondered what the ramifications for drugstores would be in February, considering the sector reported previously strong sales related to the ugly bug. While those sales aren't as robust, it turns out, they're still pretty healthy.

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Alyce Lomax does not own shares of any of the companies mentioned. Having caught several bugs this year, she's considering investing in a plastic bubble.