Rite Aid lowers 2008 guidance, citing economy, slow cough/cold sales
CAMP HILL, Pa. Rite Aid on Thursday lowered its fiscal 2008 guidance for sales, net loss and adjusted EBITDA, citing a soft economy and slow start to the cough-cold season as reasons behind the adjustment.
As of mid-afternoon, the news dropped Rite Aid’s stock by some 27 percent to less than $3 per share.
“We are lowering our fiscal 2008 guidance because the cough, cold and flu season continues to be weaker than last year, and we are seeing slower holiday sales than expected so far,” stated Mary Sammons, Rite Aid president and chief executive officer. “Our team is focused on our critical priorities of increasing both front-end and pharmacy sales, containing costs, investing in the store base through our new and relocated store program and improving customer satisfaction.”
Rite Aid now expects sales to fall between $24.3 billion and $24.6 billion, with same-store sales improving 1 percent to 2 percent, as compared to previous guidance of $24.5 billion and $25.1 billion with same-store sales improving 1.3 percent to 3.3 percent.
Net loss for fiscal 2008, including nine months of acquisition-related cost savings of approximately $200 million, is expected to drop between $161 million and $192 million as compared to previous guidance of net loss between $78 million and $161 million.
Rite Aid reported revenues of $6.5 billion for the 13 weeks ended Dec. 1, representing a 51 percent increase.
Net loss for the quarter was $84.8 million compared to last year’s third quarter net income of $1.1 million.
Same-store sales, which do not include the Brooks- or Eckerd-acquired stores, increased 0.7 percent during the third quarter as compared to the year-ago like period, consisting of a 1.2 percent pharmacy same-store sales increase and a 0.4 percent decrease in front-end same-store sales. The number of prescriptions filled in same stores increased 0.2 percent.
Adjusted EBITDA was $232.3 million or 3.6 percent of revenues for the third quarter compared to $160.8 million or 3.7 percent of revenues for last year’s third quarter.
Even with the negative news, Goldman Sachs analyst John Heinbockel, a critic of Rite Aid’s ability to successfully convert the Brooks/Eckerd acquisiton, raised his analysis of Rite Aid’s stock from Sell to Neutral, noting that Rite Aid has been trading recently at less than what Heinbockel expects in the near future. “It is quite possible for the shares to trade lower in the near-term (as they are today),” Heinbockel wrote in a research note published Thursday, “given how badly investor confidence has been dented.”
CVS announces it has reached $10 million charity fundraising mark
WOONSOCKET, R.I. CVS Caremark Charity announced on Wednesday that it has reached a $10 million milestone in fundraising.
“As our ninth year of orchestrating this world-class golf tournament draws to a close and we approach our 10-year mark, it gives our company and employees great pleasure to know that we have contributed $10 million in donations to so many worthy nonprofit organizations throughout Rhode Island and New England,” stated Tom Ryan, president, chairman and chief executive officer of CVS Caremark.
PGA Pros and CVS Caremark Charity Classic hosts Billy Andrade and Brad Faxon joined Ryan in presenting $1.7 million in funds raised at the 2007 CVS Caremark Charity Classic and announcing a total of $10 million funds raised since 1999.
Nearly 100 nonprofit organizations received funds from the 2007 CVS Caremark Charity Class including the American Heart Association, American Red Cross, the Boys and Girls Clubs of Providence and the Brain Injury Association.
Safeway announces round of Season of Giving campaigns to close out year of charitable programs
PLEASANTON, Calif. Safeway on Monday announced a series of “Season of Giving” campaigns designed to provide food, toys and other services to the disadvantaged across the company’s operating areas. The food drives are expected to serve more than 2 million meals to families in need during the holidays.
In total, Safeway will be conducting more than 40 regional food drives; will be sponsoring 15 major toy drives; and will be collecting thousands of coats in communities throughout the United States and Canada.
“Assisting those individuals and families who require a helping hand during the holidays and throughout the year is an important part of Safeway’s giving programs,” stated Larree Renda, Safeway executive vice president and Safeway Foundation chairman. In 2007 Safeway has provided more than $110 million in products and donations to charitable programs, Safeway reported.
The Season of Giving campaign involves local efforts at stores in 21 states, the District of Columbia and Canada under the Vons, Pavilions, Dominick’s, Tom Thumb, Randalls, Genuardi’s, Carr, Pak ‘n Save and Safeway banners.
Some of the local campaigns include:
East Coast: More than 140 Safeway stores in Virginia, Maryland, Delaware and Washington are collecting food for the 25th Annual Neediest Kids Food Drive, which benefits the Capital Area Food Bank and its 750 affiliated hunger relief agencies. The stores partner with financial consulting firm Booz Allen Hamilton and broadcasters Comcast SportsNet, WJZW FM 105.9 FM and MIX 107.3 FM to manage and promote the food drive, which is an extension of a year-round outreach to help underprivileged children.
San Francisco Bay Area: The Safeway/ABC 7 End Hunger Now campaign unites more than 150 stores in the Bay Area, the local ABC television affiliate and nine food banks in a food drive that includes live television, print and in-store radio appeals for customers and viewers to get involved. The campaign includes a day of live broadcasts, similar to a telethon, from San Francisco’s Union Square and multiple Safeway locations. Previous End Hunger Now drives have raised more than 260,000 pounds of food.
Chicago: Dominick’s stores and ABC 7 Chicago are helping to fight empty plates this holiday season by rolling out the food collection barrels and selling Depository Dollars at checkstands for their annual Dominick’s & ABC 7 Chicago Holiday Food Drive to benefit the Greater Chicago Food Depository. While last year’s campaign raised the equivalent of 828,699 pounds of food, the 2007 goal is to collect the equivalent of more than 1 million pounds of food.
Denver: Safeway stores in the Denver area plan to raise 10 tons of food for the Volunteers of America, which operates extensive hunger relief and outreach programs. The CW Network’s local station is supporting the drive with commercial spots featuring the station’s news anchors. Colorado Springs stores are participating in the Salvation Army Care and Share Food Drive and plan to collect more than five tons of food by Christmas day.
Texas: For more than 20 years, Safeway’s Tom Thumb stores have joined WFAA-TV Channel 8 for Santa’s Helpers Toy Drive. The event has raised more than 1 million toys since its inception. WFAA’s broadcasters send out the call to Dallas and Fort Worth communities for new, unwrapped toys. In the Houston area, the company’s Randalls stores are again conducting their popular Spirit of Texas Toy Drive, benefiting the Salvation Army. The campaign raises more than 40,000 toys throughout the greater Houston area.
Arizona: Safeway’s Phoenix Division is supporting the Association of Arizona Food Banks with a large cash donation to help with immediate food shortages and emergency needs. A series of store food drives, in association with the Girl Scouts, Boys and Girls Club and other community organizations, will run through the end of the year and help families throughout the winter months.
Hawaii: The Check–Out Hunger donation program will raise more than $110,000 for the Hawaii Food Bank. Safeway, in partnership with Kraft Foods and other Hawaii retailers, is asking customers to add a specific donation amount to their grocery bill: $2.81 – enough to feed a child breakfast for a week, or $12.43 – enough to feed a senior dinner for a month, or $16.84 – enough to feed a family dinner for a week.
Washington, Alaska, Idaho and Montana: Safeway stores are working with food banks, high schools, Boy Scouts troops and churches to gather and distribute donated food for the holidays. In addition, Safeway’s Seattle Division is continuing to assist flood victims in western Washington including Lewis, Grays Harbor and Thurston counties.
Portland: Safeway stores in the Portland Metropolitan area and Salem are collecting food for the Sunshine Division’s Annual Holiday Food Drive throughout the holiday season. The Sunshine Division, a food bank operated by the Portland Police Bureau, has provided food for needy families for more than 100 years. Safeway has partnered with the Sunshine Division on the Holiday Food Drive for more than 40 years. The Portland stores also are working with the United States Marine Corps on the local Toys for Tots drive to collect 100,000 toys for children in the Portland and Salem Metropolitan areas.
Southern California: Los Angeles Mayor Antonio Villaraigosa and Cardinal Roger Mahony joined Safeway’s Vons Division and Para Los Ninos, an agency that provides services to low-income children, in serving a hearty holiday meal to 600 children and their families on November 20. In the Ventura County Holiday Challenge Food & Fund Drive, grocery bags were placed in two special editions of the Ventura County Star with a note asking readers to fill the bags with nonperishable food and drop them off at the local Vons or Pavilions store. The goal is to raise 175,000 pounds of food for the Ventura County FOOD Share program by Dec. 24.
Canada: Stores are helping needy children locally and internationally with food, toys and gifts. Partnering with Operation Christmas Child, Canada stores are helping to collect 75,000 shoeboxes filled with toys and other gift items to send to children in third-world countries. In addition, Canada stores are selling Care Package Food Hampers, packages containing items that food banks need most. Customers can purchase the packages and place them in the store’s food donation bin to benefit the local food bank.