Drugstore retailer Rite Aid
What analysts say:
• Buy, sell, or waffle? Nine analysts currently follow Rite Aid. Two are bullish on the stock, three have hold ratings, and four recommend looking elsewhere for investment ideas. The Motley Fool CAPS community has given Rite Aid a middle-of-the road three-star rating (out of a possible five stars).
• Revenues. Analysts are projecting $6.9 billion in second-quarter sales, which is 61% ahead of last year's sales amount and stems from a major recent acquisition of Brooks and Eckerd drugstores.
• Earnings. Analysts expect negative quarterly earnings of $0.06 on top of a $0.02 loss in the same quarter last year.
What management says:
Back when Rite Aid reported first-quarter results, management said it expected full-year sales of $25.3 billion-$26 billion on a same-store sales improvement of 3.8%-5.8%. It's still projecting a full-year earnings loss of $0.11-$0.23 as hefty acquisition and integration costs hit the bottom line.
What management does:
Rite Aid is a serial acquirer and has relied on drugstore buyouts and strategic alliances to become the third-largest player in the industry, behind Walgreen
|
04/06 |
06/06 |
09/06 |
12/06 |
03/07 |
06/07 |
|
|---|---|---|---|---|---|---|
|
Gross |
27.2% |
27.1% |
27% |
26.9% |
26.9% |
27% |
|
Operating |
2.3% |
2.1% |
1.9% |
2% |
1.9% |
1.9% |
|
Net* |
7.4% |
7.2% |
7.1% |
7.1% |
0.2% |
0.2% |
One Fool says:
Despite Rite Aid's high debt and dubious profitability from a reported earnings perspective, it has grown into a formidable player in drug retailing. The industry has favorable demographic tailwinds at its back, as aging baby boomers increasingly pop pills and take other medicine to stay spry well into their golden years. But until Rite Aid can prove to investors that years of acquisitions can be integrated into a company with a clear financial direction, it will remain a show-me story, especially since CVS and Walgreen continue to fire on all cylinders.
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