By Richard Gibson
Of DOW JONES NEWSWIRES
DES MOINES, Iowa (Dow Jones)--Rite Aid Corp. (RAD) shares jumped for the second straight day despite a lack of news to explain the sudden turn after weeks of decline.
The stock was up more than 7% in recent trading on the New York Stock Exchange after climbing 7% Wednesday for a two-day gain of 15%.
A spokeswoman for the Camp Hill, Pa., drugstore chain said there was no news or announcement that might explain the upswing. "We don't typically comment" on share movements, she added.
Analysts similarly were at a loss to explain what Sheldon Grodsky of Grodsky Associates Inc. called "the first bounce in more than a month." He said the shares have been "under tremendous pressure" in recent weeks.
"Now it's getting into the realm of reasonable," Grodsky said of the stock price, although he said the company "still has to climb out of a big hole."
The 52-week high on the stock was $9.99 last June 18. The 52-week low was $1.75 a year ago, on Dec. 28.
Miller Tabak Roberts analyst Robert Goch predicted that Rite Aid would report a "good" fiscal third quarter, after a "really disappointing" second quarter. For that period Rite Aid posted a net loss of $245.9 million on sales of $3.69 billion.
Calling Rite Aid a "turnaround story," Goch, a bond analyst, said he is impressed with the company's management team.
"I'm relatively confident that Rite Aid will show a nice year-over-year as well as sequential improvement in operating performance," he said.
Grodsky also applauded management, saying it has "done a lot of things to increase the likelihood that the company will be a living, breathing entity for the future." But, he added, "they still have a long way to go."
In reporting fiscal second-quarter results Oct. 2 company president and chief operating officer Mary Sammons said she was "pleased with the continued improvement in sales and EBITDA, especially in a very tough retail environment."
For the three months beginning Sept. 2 and ending Dec. 1 Rite Aid reported a 6.9% increase in same-store sales. The company expects to release fiscal third-quarter results on Jan. 10.
-Richard Gibson, Dow Jones Newswires; 515-282-6830; dick.gibson@dowjones.com
(END) DOW JONES NEWS 12-27-01
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