Source: Wikimedia Commons

After Rite Aid (NYSE:RAD) reported sales for the month of April on May 1, shares of the drugstore retailer soared higher, closing up 5.5% after touching a new 52-week high. Even though shares of the drugstore chain are trading at their highest point since September 2001, is it possible the stock still has a great deal to run, or should investors look to Walgreen (NASDAQ:WBA) or CVS Caremark (NYSE:CVS) for higher returns?

Rite Aid's April sales were strong but not as strong as you think!
For the month, Rite Aid saw its revenue come in at $1.995 billion, up nearly 5% from the $1.902 billion management reported in the same month last year. According to the company's press release, its jump in revenue stemmed from higher comparable-store sales, but a decent amount of its increase was due to a shift in the timing of Easter from March 31 last year to April 20 this year.

Source: Rite Aid

Comparable-store sales at the country's third-largest drugstore chain increased 5% compared to April 2013. This was due to a 4.7% improvement in the company's front-end comparable-store sales (4.6% of which has been attributed to the shift in Easter) and a 5.2% rise in pharmacy comparable-store sales. These strong results came in spite of 36 net store closings over the past year, bringing the company's store count down to 4,583 from 4,619.

Rite Aid's period of stagnation
Using Rite Aid's April sales data alone would signify that the company is thriving, but the long-term picture suggests otherwise. Over the past five years, Rite Aid's revenue has decreased about 0.6% from approximately $25.7 billion to about $25.5 billion. This decline in sales came from management's decision to close 4% of the company's locations in an attempt to minimize the annual losses Rite Aid was incurring. The negative impact from the store closings was partially offset by a 0.8% aggregate improvement in comparable-store sales.

RAD Revenue (Annual) Chart

Rite Aid revenue (annual) data by YCharts

Over this same time frame, CVS, the largest drugstore chain in the country, saw its revenue climb 29% from $98.2 billion to $126.8 billion. Unlike Rite Aid, CVS added an impressive 565 stores (net of closings) to its network, increasing the business' store count from 7,095 to 7,660. This, combined with an aggregate comparable- store sales increase of 18%, is what helped the business grow as quickly as it did, even in spite of its massive size.

Walgreen also performed well over the past five years but not to the same degree CVS demonstrated. Between 2009 and 2013, the company's revenue rose a modest but respectable 14% from $63.3 billion to almost $72.2 billion. Like CVS, Walgreen benefited from a nice rise in store count, adding 1,086 new locations during this period and bringing its number of locations in operation up from 7,496 to 8,582. This was complemented by a 2% increase in aggregate comparable-store sales.

Rite Aid's bottom line looks encouraging!
Despite the fact that Rite Aid has had a problem increasing its sales, the company has been successful in improving its profitability. Over the past five years, Rite Aid's cost-cutting initiatives, which primarily consisted of closing unprofitable locations and increasing margins, have resulted in an amazing turnaround. During this time frame, the company's net loss of $506.7 million turned into a gain of $249.4 million.

RAD Net Income (Annual) Chart

Rite Aid net income (annual) data by YCharts

Over this time frame, both CVS and Walgreen saw some improvements in profitability as well. CVS' net income grew 24% from $3.7 billion to approximately $4.6 billion, while Walgreen's net income rose 22% from about $2 billion to $2.4 billion. Both businesses benefited from their rising sales but Walgreen even more so.

You see, while CVS' profits rose slower than its revenue (due to a slight increase in its cost of goods sold), Walgreen's bottom line expanded nearly twice as fast as its top line. The primary reason for this difference has to do with the accounting that relates to the company's share of Alliance Boots, a business that the company currently owns a 45% stake in.

Foolish takeaway
As we can see, Rite Aid's monthly sales metrics were really strong. But investors need to consider that a portion of this improvement was due to the shifting of Easter, not explosive revenue growth. When you consider this as well as the fact that the company's revenue growth has been non-existent these past five years, the picture doesn't look amazing.

However, the Foolish investor should also keep in mind that any growth seen by the company is a positive sign, and that its turnaround from losing so much money each year to generating a profit is a sign of a healthier enterprise. Moving forward, it will be interesting to see what happens with Rite Aid. If management can continue their track record, shares could continue to rise. But for the Foolish investor who doesn't feel comfortable with the chain, Walgreen and CVS might make for more appealing prospects.

Daniel Jones has no position in any stocks mentioned. The Motley Fool recommends CVS Caremark. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.