Drugstore chain Rite Aid Corporation (RAD) issued their second quarter earnings report on Sept. 19, showing that the company’s turnaround has not slowed a bit. The company posted increased sales, notably in the key same-store sales metric, and a marked growth in the pharmacy department, upending analyst expectations.
The drugstore, which for a time flirted with bankruptcy, is in the midst of a massive turnaround. After posting one lone profitable quarter in five years, Rite Aid has posted net gains over the last four quarters, and this one comfortably trumped analyst expectations.
Of particular excitement for Rite Aid is growing pharmaceutical sales. In a conference call with investors, Chief Financial Officer Frank G. Vitrano said, “The (sales) increase was due to higher pharmacy sales. Overall same-store sales increased 1% in the quarter, reflecting a higher pharmacy inflation rate,” referencing the chain’s aggressive expansion of that division, including the completion of the 1,000th Wellness Store remodel.
For their second quarter 2013 earnings report, Rite Aid reported a net profit of $32.8 million, or $0.03 per share, versus the net loss of $39 million, or -$0.05 per share, from the same period a year ago. Revenue for the quarter was $6.3 billion, as compared to $6.253 billion from the previous year. Analysts were expecting a loss of -$0.04 per share on revenues of $6.2 billion.
In its history, Rite Aid’s stock has gotten as high as $48.56 a share, in Dec. 1998, before a major accounting scandal racked the company, ending with several key executives, including the company’s CEO, going to jail.
Rite Aid popped on the news, gaining 21.02 percent to hit $4.49 a share. The stock is up a whopping 166 percent on the year, and has gained over 1,000 percent since March 2009, when the stock hit an all-time low of 20 cents a share.