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UBS analyst has hope for Rite Aid

BY Michael Johnsen

NEW YORK There may be a silver lining within Rite Aid’s second-quarter results that were released Thursday, UBS Investment Research analyst Neil Currie wrote in a research note released shortly after Rite Aid’s conference call with analysts.

Rite Aid reported a loss-per-share of 23 cents, Currie noted, “but excluding 5 cents in debt modification, expense results were minus 18 cents, versus the Street’s minus 16 cents estimate. However, if excluding the 3 cents [per share] in advertising for Wellness+, pharmacist immunization training and the shift in Memorial Day holiday pay, results were virtually in line with expectations.”

Currie commented that Rite Aid’s results are not nearly as bad as many of the day’s headlines suggested. “Despite negative sales trends, gross margin showed further stabilization, declining only 11 basis points year-over-year to 26.6% versus Street (& UBS) estimate of down 20 basis points to 26.5%,” he wrote. Further, Rite Aid’s expenditures against growing its Wellness+ membership rolls produced growth of approximately 10 million new members in the past quarter. “A worthy investment in our view,” Currie wrote.

Currie reiterated UBS’ buy rating on Rite Aid, with a price target of $4, “based on a belief that Rite Aid could play a role in further industry consolidation.”

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Casey joins A&P’s board

BY Antoinette Alexander

MONTVALE, N.J. Grocer A&P has announced the election of Thomas Casey to its board of directors.

Casey has more than 24 years of experience in financial management and strategic planning. During his career, he has served as a strategic financial adviser to companies in the retail entertainment, food and drug, convenience store, food wholesale and foodservice industries. During his tenure at Deutsche Bank Securities, Casey was responsible for the banks’ retail industry relationships in North America. He also has held financial and investment banking positions with Citigroup, Merrill Lynch, Blockbuster and Dillon Read & Co.

“I would like to welcome Tom to the board. We are excited to have his extensive financial knowledge and experience to help us lead our comprehensive turnaround. I am looking forward to working with Tom and the board of directors to create value for our shareholders,” stated Christian Haub, executive chairman of the company.

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CVS Caremark declares quarterly dividend

BY DSN STAFF

WOONSOCKET, R.I. CVS Caremark’s board of directors approved a quarterly dividend of 8.75 cents per share of common stock.

The dividend is payable on Nov. 2 to holders of record on Oct. 22.

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