- The Washington Times - Thursday, April 2, 2009

NEW YORK (AP) - Drugstore operator Rite Aid Corp. said Thursday its loss more than doubled in the fiscal fourth quarter and said it plans to close as many as 117 stores over the next year.

The Camp Hill, Pa., company took a write-down of $1.81 billion in the fourth quarter, mainly from Rite Aid’s purchase of 1,850 Brooks Eckerd drugstores in 2007. Those stores haven’t done as well as Rite Aid’s older stores depite a $2.36 billion price tag.

The company reported a loss attributable to common stockholders of $2.3 billion, or $2.67 per share. Rite Aid lost $960.4 million, or $1.20 per share, a year ago. In addition to the write-down, Rite Aid reported other one-time charges totaling 43 cents per share. Excluding those items, Rite Aid lost $116.9 million, or 14 cents per share. Revenue fell 2 percent, to $6.71 billion.

Thomson Reuters says analysts expected a loss of 11 cents per share and $6.71 billion in revenue.

Rite Aid had 4,901 stores in 31 states at the end of the fiscal year, and said it has made plans to close 117 by Feb. 28, 2010. That includes 60 closings in the first quarter, about 18 of which appear to have already happened. It plans to open only 20 stores this year, and move 55 others.

The closings would leave Rite Aid with about 2,000 fewer stores than CVS Caremark Corp. and Walgreen Co.

The company said it took the write down because of its low stock price and market capitalization. Rite Aid shares have been trading under $1 since September and closed at 39 cents on Wednesday. The company plans to boost its share price later this year with a reverse stock split.

In morning trading, Rite Aid shares lost about a penny, to 38 cents. Rite Aid shares set an all-time low of 20 cents last month.

Chairman and Chief Executive Mary Sammons said the $1.2 billion write-down of the former Brooks Eckerd stores “is not a true reflection of the long-term benefit we expect to see from our acquired stores.” On the company conference call, she added that the newer stores have not met Rite Aid’s original expectations, but pharmacy results are improving.

The company is trying to cut inventory and expenses, and on Thursday, it said it would close one of the distribution centers that came with the Brooks Eckerd buyout. Rite Aid now plans to shut down two of those centers this year, cutting about 360 jobs.

In fiscal 2009, Rite Aid reported a loss of $2.94 billion, or $3.49 per share, compared with $1.11 billion, or $1.54 per share in fiscal 2009. Its revenue rose 8 percent, to $26.29 billion from $24.33 billion.

Rite Aid’s fiscal 2010 forecast was mostly below analyst estimates. The company said it expects to lose $210 million to $435 million in fiscal 2010, or between 26 cents and 53 cents per share. It called for $26.3 billion to $26.7 billion in revenue, and said same-store sales would rise 0.5 to 2.5 percent.

Analysts expected a loss of 36 cents per share on $26.68 billion in revenue.

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