UPDATE 2-Rite Aid expecting more losses despite sales gains

* Q4 EPS loss 24 cents, in line with Street View

* Q4 comp sales up 0.9 pct

* Sees FY 2012 comp sales up 0.5 pct-2 pct

* Sees FY 2012 loss 42 cents to 64 cents

* Shares up 3 cents, or 2.8 pct
(Adds details from call, analyst comment, byline; Updates
shares)

By Phil Wahba

NEW YORK, April 7 (Reuters) – Rite Aid Corp’s (RAD.N: Quote, Profile, Research) sales
rose over the most recent quarter, supported by a late flu
season, but the company on Thursday forecast another loss this
fiscal year despite the expectation of additional sales gains.

Sales at its established drugstores were $6.46 billion,
down slightly from a year ago as the chain has closed some
weaker stores. Rite Aid reported a rare increase in sales at
stores open at least a year, partly due to a 1 percent increase
in general merchandise sales.

That contrasts with declines in recent quarters, as the
drugstore chain has lost business to larger rivals Walgreen Co
(WAG.N: Quote, Profile, Research) and CVS Caremark (CVS.N: Quote, Profile, Research).

Rite Aid said it expects sales at established drugstores to
rise between 0.5 percent and 2 percent for the fiscal year that
began in late February.

But it has not gotten off to a good start. March same-store
sales slid 0.1 percent, compared with Walgreen’s 3 percent
rise.

Prescriptions make up two-thirds of Rite Aid’s quarterly
sales. Chief Executive John Standley said on a conference call
that its prescriptions filled had become more profitable due to
the introduction of more generic drugs and loyalty cards that
have attracted more customers.

The third-largest U.S. drugstore operator reported a net
loss of $205.7 million, or 24 cents per share, compared with a
loss of $208.4 million, or 24 cents per share, for the same
quarter a year ago, in line with analyst estimates, according
to Thomson Reuters I/B/E/S.

Rite Aid expects a first full-year loss of between $370
million and $560 million, or 42 cents and 64 cents per share.

Raymond James analyst John Ransom said Rite-Aid’s forecast
“shows little to no growth in the business” and said a slow
economy and lack of new generic drugs will continue to weigh on
the chain.

Its shares rose 2.8 percent, or about 3 cents, to $1.09 in
early trading.
(Reporting by Phil Wahba; Editing by Derek Caney and Maureen
Bavdek)

UPDATE 2-Rite Aid expecting more losses despite sales gains