...EBITDA Expected to Be Stable: Rite Aid Corporation's (Rite Aid) fiscal 2014 (February 2014) EBITDA increased to $1.3 billion, after surpassing the $1 billion level for the first time in fiscal 2013. Fitch Ratings expects EBITDA to be sustainable at $1.3 billion over the intermediate term, enabling the company to dedicate increased capex toward store remodels and some store relocation activity, and to devote FCF to debt reduction. Sales Offset by Margin Pressure: While Fitch expects gross margin to decline in the 20 bps¡ 30 bps range annually, due to ongoing pharmacy reimbursement rate cuts that will put some pressure on the current LTM EBITDA margin of 5.1%, Fitch expects same-store sales to grow at 2%¡3% over the next 24 months, resulting in relatively flat EBITDA levels. The same-store sales projection is based on front-end same-store sales of 1%, prescription volume growth of 1.5%¡2.0% and some pharmacy inflation. Profitability Well Below Competitors: Rite Aid's operating metrics still...
