Rite Aid cuts outlook

CAMP HILL, Pa., Sept. 7 (UPI) -- Rite Aid Corp. of Camp Hill, Pa., Tuesday lowered its estimate for fiscal 2005 sales and earnings, citing slower growth in pharmacy sales.

Many large healthcare companies have been raising their rates by as much as $125 a month over the past few months and refusing to fill drug orders unless the illness is considered life-threatening.

The drug chain also cited lower-than-expected third-party reimbursement rates for prescription drugs.

For Rite Aid's fiscal second quarter, same-store sales increased 2 percent and total drugstore sales rose 1.7 percent to $4.11 billion.

In all cases, prescription revenue accounted for about 64 percent of drugstore sales, and third-party prescription revenue represented about 93 percent of pharmacy sales.

Based on these trends, Rite Aid lowered its guidance for sales for fiscal 2005 to a range of $16.9 billion to $17 billion, down from its previous estimate for sales of $17.1 billion to $17.3 billion.

Rite Aid now estimates that same-store sales for the fiscal year will improve 2.75 percent to 3.25 percent. Its previous estimate was for improvement of 3.7 percent to 4.75 percent.