Categories Earnings, Other Industries

Earnings Preview: Rite Aid might not turn a positive surprise

Rite Aid Corporation (RAD) is scheduled to report second quarter 2019 earnings on Thursday. Analysts expect the company to report revenues of $5.37 billion, down 30% year-over-year, along with a loss of $0.01 per share.

Weakness in the generic drug market has been negatively impacting the stock, which does not present a positive picture to investors. Generic drug purchasing efficiencies are expected to be lower by around $80 million than when Rite Aid first charted its fiscal year 2019 guidance.

Last month, Rite Aid also terminated its merger agreement with Albertsons Companies Inc. and committed itself to executing its strategic plan as a standalone company. The company’s plan to leverage its retail pharmacies, health and wellness offerings along with its EnvisionRxOptions PBM provides some optimism though.

The company has missed estimates twice in the recent past and despite optimism on its strategic plan, the generic drug market conditions have dampened the sentiment surrounding the stock and there is a chance that Rite Aid might not bring a positive surprise this quarter. The stock has dropped 15% over the past one month.

During the first quarter, the company had posted a profit of $214.4 million or $0.20 per share, driven by one-time gains from the sale of its stores to Walgreens Boots Alliance (WBA). Net loss from continuing operations came in at $0.04 per share as a result of higher lease termination and impairment charges.

Total revenues in the first quarter fell 2% to $3.9 billion primarily due to store closures while revenues from continuing operations dropped 1% due to weaknesses in the Retail Pharmacy and Pharmacy Services segments.

For the full year of 2019, the retailer has guided for revenues of $21.7 billion to $22.1 billion with same-store sales expected to be flat to up 1%. In August, Rite Aid updated its outlook for net loss based on negative trends in the generic drug marketplace. Adjusted net loss is expected to range from $0.04 to breakeven per share versus the previous earnings range of $0.02 to $0.06 per share.

Rite Aid swings to profit in Q1 on one-time gains

Most Popular

V Earnings: Key quarterly highlights from Visa’s Q1 2023 financial results

Visa Inc. (NYSE: V) reported first quarter 2023 earnings results today. Net revenues grew 12% year-over-year to $7.9 billion. GAAP net income rose 6% to $4.2 billion while EPS grew

Earnings: Highlights of Intel’s (INTC) Q4 2022 financial results

Intel Corporation (NASDAQ: INTC) Thursday reported a decline in adjusted earnings and revenues for the fourth quarter. The semiconductor giant also provided guidance for the first quarter of 2023. Fourth-quarter

McCormick (MKC) expects to drive sales growth in 2023 through pricing actions and cost savings

Shares of McCormick & Company Inc. (NYSE: MKC) were down over 5% on Thursday after the company missed expectations on its fourth quarter 2022 results and provided a lower-than-expected earnings

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top