Executive Summary

Drug store chain revises fiscal 2005 sales and earnings guidance to reflect slowing Rx sales growth, lower third-party reimbursement rates and the growing impact of mail-order competition. The firm expects sales of approximately $17 bil. with net earnings between $122 mil. and $150 mil., a decrease from the previously forecasted $17.1 bil. to $17.3 bil. with earnings in the $121 mil. to $167 mil. range. Though Rite Aid is "disappointed" with the downward trend, the chain is addressing the issues in the near-term with a TV ad campaign, "an aggressive pharmacy customer acquisition program in key markets and an increased emphasis on prescription file buys," according to CEO Mary Sammons...