Rite Aid Corporation Fills Investors' Prescriptions in Q4

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Pharmacy retailer Rite Aid Corporation announced fourth-quarter results before the market opened on Wednesday morning. Shares were up around 1% in pre-market trading. Here are the highlights.

By the numbersFourth-quarter revenue came in at $6.8billion. That reflects a 3.8% year-over-year increase and precisely metanalysts' average revenue estimate. For full year 2014, Rite Aid generated revenue of$26.5 billion, a 3.9% jump from the prior year.

Rite Aid announced fourth-quarter earnings of $1.835 billion, or $1.79per diluted share. This represented a huge increasefrom the $55.4 million, or $0.06per diluted share, reported in the same quarter of 2013. However, the current results reflected a much-larger tax benefit than Rite Aid reported for fourth quarter of 2013. On a pre-tax basis, the company's earnings were $119.1 million, or$0.12 per share.This quarterly earnings result handily beatthe consensus analyst estimate of $0.07 per share.

For the 2015 fiscal year, Rite Aid reported earnings of $2.109 billion, or$2.08 per diluted share, up from $249.4 million, or $0.23per diluted share, reported in the previous year. Like the quarterly result, this recent full-year figure was greatly affected by a big tax benefit.Pre-tax income was $426.8 million, or $0.42 per diluted share, in fiscal 2015, a nice jump over the $250.2 million, or $0.23 per diluted share, reported in fiscal 2014.

Behind the numbersThree factors stand out as the primary drivers behind Rite Aid's solid results. First, the pharmacy retailer saw great growth in same-store sales. For the fourth quarter, same-store sales increased 4.5% over the same period in the prior year.

Rite AidCEO John Standley also pointed out that the company experienced strong growth in prescription count. The number of prescriptions filled during the fourth quarter came in 3.5% higher than the figure reported in the same quarter of the previous year. This is key to Rite Aid's success, since prescription sales account for more than two-thirds of total drugstore sales.

The third factor helping Rite Aid thrive comes from controlling costs effectively. Selling, general, and administrative expenses as a percentage of revenue fell to 25.09% for the 13 weeks ended Feb. 28, 2015 from 26.02% for the 13 weeks ended March 1, 2014. Keeping costs under control while growing revenue is exactly what well-run companies do.

Looking aheadRite Aid sees fiscal 2016 as another year for solid performance. The company projects salesbetween $26.9 billion and $27.4 billion for the full year. Earnings for fiscal 2016 (net of estimated income tax) are expected to fall between$190 million and $275 million, or $0.19 to $0.27 per diluted share.

Pharmacy retailers in general count several trends working in their favor, including an aging U.S. population using more prescription medications and more generic drugs on the horizon that help the bottom line. Rite Aid should benefit from these trends in the coming years.

Of course, the company still must compete for market share against several formidable rivals. Rite Aid's management hopes that its "Genuine Well-being" strategy that relies on technology to enable pharmacists to interact more directly with patients will help the company accomplish that goal.More results like those from last quarter could be a signal for investors that Rite Aid is right on track.

The article Rite Aid Corporation Fills Investors' Prescriptions in Q4 originally appeared on Fool.com.

Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

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