All the same, Rite Aid continues to try to fight the good fight -- looking to make its stores more attractive and continuing to build on its strengths in the generic drug dispensing business. To that end, this recent quarter wasn't so bad. Revenue was up a little less than 3%, though same-store sales came in at 3.6% as the pharmacy business did the best it has done in some time.
But higher sales aren't always a windfall. Gross margins actually fell a bit this quarter, and the company primarily blamed lower Medicare Part D reimbursement and a higher percentage of generics in the mix. Furthermore, adjusted EBITDA was still down by a double-digit amount as the company incurred higher occupancy and relocation expenses.
I do wonder what the future holds for pharmacies in general. After all, companies like WellPoint
Nimble investors have made some money in Rite Aid, and I suppose there's still the chance that the company will boost its performance to a level at which patient investors could make some money. But with so many other, better companies to invest in, is it really worth taking the chance?
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
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