Source: Walgreen.

On April 3, Walgreen (NASDAQ:WBA) announced its sales performance for March 2014 in comparison to the same month a year earlier. In response to the strong growth management relayed to investors, shares of the world's second-largest drugstore chain popped up 1% to close at $67.08. However, the company wasn't the only drugstore giant to report year-over-year improvements.

Rival Rite Aid (NYSE:RAD) also pleased investors and saw a 2% share price appreciation in response. Knowing how each business fared over the month, what does this mean for the Foolish investor struggling to decide which business provides the best prospects over the long run?

Walgreen reported a killer month
For the month, Walgreen saw its total revenue leap 4.5%, from $6.16 billion to $6.43 billion. In its release, the company attributed the rise in revenue to two factors: higher store count and improvement in its comparable-store sales. Compared to the same month last year, the company chalked up a small portion of its growth to the addition of 144 new retail stores, bringing its retail count to 8,221 and its total locations in operation to 8,688.

Source: Walgreen press release.

However, the main driver behind the company's better top-line performance was its comparable-store sales, which jumped 3.5%. Despite being negatively affected by a 4% drop in customer traffic, the business reported that a jump in prescription sales helped push the company's pharmacy comparables up 8%. Unfortunately, this rise in pharmacy sales was partially offset by a 3.4% fall in front-end comparable-store sales as less traffic hindered its performance but basket size rose 0.6%.

Rite Aid's results were good but couldn't keep up
Rite Aid also posted positive results, but its growth was only a fraction as large as Walgreen's. For the month, the company reported sales growth of 0.4%, from $1.94 billion to $1.95 billion. Like Walgreen's, Rite Aid's higher revenue stemmed from higher comparable-store sales, but at 0.7%, the business barely made it into positive territory. This performance was hindered by the company's reduced store count, which fell 0.8%, from 4,621 to 4,584.

Just as in the case of Walgreen, Rite Aid enjoyed a healthy showing in its pharmacy comparables, which soared 3.5%. This too was offset by a less-than-ideal front-end performance. Compared to the same month a year earlier, Rite Aid's front-end comparables fell 5% as a shift in the timing of Easter negatively affected its front-end sales by 4.1%.

What does history say about these drugstores?
While it's nice to know how well a company is doing on a month-to-month basis, the Foolish investor should focus their efforts primarily on the long-term performance the business in question is likely to enjoy.  Doing so reveals some very interesting things about both Walgreen and Rite Aid.

Over the past four years, for instance, Rite Aid saw its revenue decline 1% from $25.7 billion to $25.4 billion.  In its financial statements, the company attributes the drop in sales to its store closings.  However, due to restructuring efforts by management, the business's increase in comparable store sales over this time horizon helped offset the impact from fewer stores in operation.

Walgreen, on the other hand, smashed Rite Aid in top-line growth.  During the same time frame, the company's revenue rose 7% from $67.4 billion to $72.2 billion.  Unlike its smaller rival, Walgreen saw flat comparable store sales over this period, but made up for it by a 7% increase in store count.

Looking at revenue, Rite Aid and Walgreen are like night and day, but when it comes to profits, their differences fade a little.  Over the past four years, Rite Aid saw its net loss of $506.7 million transform into a net gain of $118.1 million.  In each year except one, the company's profitability improved, mostly because of the closing of unprofitable locations and a continued emphasis on cutting costs anywhere deemed possible.

Walgreen also enjoyed an improvement in its bottom line over time, with net income jumping 17% from $2.1 billion to $2.45 billion.  On top of benefiting from higher sales, the company saw some cost reductions and both companies saw a change in product mix from brand name drugs to generic drugs.  

Foolish takeaway
Both Rite Aid and its larger rival Walgreen reported not just a rise in comparable-store sales, but a rise in consolidated sales during the month of March. At first glance, the rise in share price of each business indicates investors are more bullish about Rite Aid than Walgreen, but the performance of the latter was the strongest.

Moving forward, the Foolish investor should keep an eye on both companies as they each provide an interesting (and potentially very profitable) risk/reward trade-off.  Rite Aid's lackluster sales and large net losses have been a real concern for investors, but its positive earnings during 2013 suggest that maybe, just maybe, the company is set to grow again.  

Investors should also keep in mind that Walgreen's higher growth rate and greater profits make for an interesting prospect, but this comes at the downside of limited growth because of the company's sheer size when placed next to Rite Aid.  For the more conservative investor, this may be the way to go, while Rite Aid might be the best play for the enterprising investor.