Buoyed by rising same-store sales, drug-store operator Rite Aid (NYSE:RAD) posted a narrower-than-expected first-quarter loss and upgraded its guidance on Thursday.
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The encouraging report and rosier outlook for the full year fueled a 6% leap in Rite Aid’s shares ahead of the opening bell.
The third-largest U.S. drug store chain said it lost $28.1 million, or 3 cents a share, last quarter, compared with a loss of $63.1 million, or 7 cents a share, a year earlier. Analysts had called for a deeper loss of 4 cents a share.
Rite Aid said its revenue increased 1.2% to $6.47 billion, narrowly topping the Street’s view of $6.43 billion. Same-store sales jumped 2.5% last quarter as front-end sales rose 2.7% and prescription sales were up 2.4%.
“Our turnaround efforts continue to be successful as demonstrated by our sixth consecutive quarter of increased same store sales and Adjusted EBITDA,” CEO John Standley said in a statement.
Looking ahead, the Camp Hill, Pa.-based company now sees a non-GAAP loss of 13 cents to 29 cents a share for fiscal 2013, up from its earlier call for a loss of 13 cents to 31 cents. The midpoint of the new range, a loss of 21 cents, would narrowly miss estimates from analysts for a loss of 20 cents a share.
Rite Aid sees full-year same-store sales declining 0.5% to up 1%, translating to net sales of $25.3 billion to $25.7 billion. Consensus calls from analysts were for sales of $25.53 billion.
Wall Street cheered the upgraded guidance, sending Rite Aid’s shares rallying 5.98% to $1.24 in premarket trading. The gains should allow Rite Aid to trim its 2012 decline of about 7%.