Change is good!

October 8, 2003

Rite-Aid’s (RAD) former chief counsel Franklin C. Brown is currently on trial in a federal courthouse in Pennsylvania facing a number of criminal charges, most of them related to creative accounting. But the company’s 10-Q filed on Tuesday shows how the company is trying to win back investors, in part, by being very open with its accounting. In January, the company said it was changing the way it accounted for shutting down stores, which led to a $9 million credit in the second quarter ended August 30. And in March, Rite-Aid began expensing stock options, which accounted for an $8.8 million expense in the recent quarter. Of course, with ongoing federal civil and criminal investigations, the company remains a risky investment. But it’s still nice to see the current management attempting to distance the company from the accounting smoke and mirrors associated with the former Rite-Aid.

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