Rite Aid Corp., the No. 3 drug store chain still struggling to regain its financial footing, announced yesterday that sales continued their rebound in August, rising 7.4 percent to $1.3 billion.
Same-store sales - sales at stores open at least a year and a barometer for performance - were even better, rising 10.1 percent for the five weeks that ended Aug. 26 over the comparable period last year.
Gains were strongest in the pharmacy sector, where same-store sales increased 10.3 percent. Front-of-the-store sales in outlets open at least a year, which the company said were slumping last year, were up 9.7 percent.
The August sales figures are a further sign that Rite Aid is on the mend, said Eric Bosshard, director of research for Midwest Research in Cleveland.
"It's another step in the right direction," he said, noting that the chain's sales increased 6 percent between March and May, the company's first quarter.
He credits the company's new chairman and chief executive officer, Robert G. Miller, and his team with instilling financial stability at the 3,800-store chain.
The August same-store numbers continued an upswing this summer. June's same-store sales were up 9.7 percent over last year, and July's were up 10.4 percent.
The company, which posted a $238 million loss for its first quarter, will announce second-quarter results next month.
Rite Aid, based in Camp Hill, Pa., was relieved to get the good news. Since Martin Grass was ousted as chairman and CEO last year, the chain has grappled with financial and management troubles, inventory shortages and dwindling investor confidence.
It swallowed the latest bitter pill July 11, when it restated profits for fiscal 1998 and fiscal 1999 resulting in total losses of $608 million, and reported a $1.1 billion loss for the fiscal year that ended in February.
Miller, who took the top job in December, has pledged to heal the wounds inflicted by previous management. Since then, he's worked with a new executive team to improve relationships with vendors and motivate employees.
"The morale is up, absolutely," said Rite Aid spokeswoman Karen Rugen.
She said the company plans an ad campaign that will feature characters from the new movie version of "How the Grinch Stole Christmas," which Universal Pictures is releasing in November. Rite Aid also plans to remodel 90 West Coast stores its former CEO had planned to sell.
Shares of Rite Aid, which topped $50 in early 1999 before financial woes began surfacing, closed yesterday at $4, up 12.5 cents.