Strong Results, Positive Guidance Aides Rite Aid Corporation (NYSE:RAD)’s Rally

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Dallas, Texas 12/19/2014 (FINANCIALSTRENDS) – Rite Aid Corporation (NYSE:RAD) surged close to 12%, driven by its strong 3Q15 results and upgrade in full-year FY15 guidance. More than 105.65 million shares changed hands on Thursday, compared to its average volume of 14.88 million shares.

The company reported 150% growth in its 3Q15 earnings to $0.1 per share, outperforming consensus estimates of $0.05 per share. Net income increased to $104.8 million in 3Q15 compared to $71.5 million in 3Q14. The retail pharmacy operator also reported better than expected 3Q15 revenue of $6.69 billion compared to street expectation of $6.64 billion.

Third Quarter Highlights

Rite Aid Corporation (NYSE:RAD) reported 4,572 stores at the end of third quarter, including 1,529 wellness stores. Its improved gross profit during the quarter was attributed to higher pharmacy prescription revenues and reduced generic drug costs, partially offset by lower reimbursement rates.

John Standley, Chairman and CEO of Rite Aid, said that the company achieved strong same-store sales, prescription count and gross profit in the third quarter. The growth is driven by its focus on expanding health and wellness offering while ensuring high level of care. The full-year guidance have been raised in line with strong third-quarter performance.

Revised Full-Year Guidance

Rite Aid Corporation (NYSE:RAD) also raised its full-year revenue forecast to $26.25 – $26.4 billion from its previous guidance range of $26 – $26.3 billion. The revised guidance is comparable to analysts’ expectation of $26.4 billion in annual revenue. The company also raised same-store sales growth guidance range to 3.75% to 4.25% from its previous range of 3% to 4%.

Rite Aid increased its full-year earnings outlook to $0.31 to $0.37 per share as compared to analysts’ consensus estimate of $0.31 per share. For the fourth quarter, the company expects earnings of $0.04 to $0.10 per share, compared to analysts’ estimation of $0.07 per share.

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