Walgreen Company (WAG), CVS Caremark Corporation (CVS): Why Rite Aid Corporation (RAD) Earnings Could Disappoint Investors

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Still, Rite Aid faces the natural challenge of simply being smaller than its rivals. In an industry where convenience is key, the much larger networks that Walgreen Company (NYSE:WAG) and CVS Caremark Corporation (NYSE:CVS) offer represent a substantial competitive advantage. Now that Walgreen Company (NYSE:WAG) has mended its relationship with pharmacy benefits manager Express Scripts Holding Company (NASDAQ:ESRX), it has started to win back some of the customers it lost to Rite Aid. Those figures are showing up in Rite Aid’s same-store sales, with flat same-store prescription counts and mixed performance in front-end store comps.

In the Rite Aid earnings report, watch to see if management comments on the latest batch of potential takeover rumors. Some believe that CVS Caremark Corporation (NYSE:CVS) or Walgreen Company (NYSE:WAG) will buy out Rite Aid Corporation (NYSE:RAD) as an easy growth play. Yet as long as Rite Aid’s substantial debt exists, it’ll be hard for any company to justify buying the drugstore chain.

The article Why Rite Aid Earnings Could Disappoint Investors originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends and owns shares of Express Scripts.

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