Categories AlphaGraphs, Earnings, Retail

Earnings: Rite Aid reports bigger-than-expected Q1 loss; stock falls

Pharmacy retailer Rite Aid Corporation (NYSE: RAD) reported a net loss for the first quarter of 2020 that is wider than the market’s estimate, on flat revenues. The company’s stock fell about 10% during Wednesday’s extended session following the announcement.

On an adjusted basis, the company reported a net loss from continuing operations of $0.14 per share, compared to earnings of $0.02 per share in the year-ago quarter. Analysts were looking for a narrower loss. Net loss from continuing operations, on an unadjusted basis, was $99.3 million or $1.88 per share during the three-month period, wider than last year’s loss of $41.7 million or $0.79 per share. The results were negatively impacted by higher restructuring-related costs.

You may also like: What the future holds for generic drug industry

Revenues were almost unchanged from last year and came in at $5.37 billion. The top line missed the forecast. Retail Pharmacy revenue dropped 0.8% year-over-year, hurt by a reduction in store count that was partially offset by an increase in same-store sales. Meanwhile, Pharmacy Services revenue rose by 1.5%.

Same-store sales at Retail Pharmacy moved up 1.4% annually in the May quarter, aided by a 2.3% increase in pharmacy sales. Pharmacy sales were negatively impacted by new generic introductions.

Same-store sales at Retail Pharmacy moved up 1.4% annually in the May quarter, aided by a 2.3% increase in pharmacy sales

“Looking forward, enhancements made to the McKesson supply agreement, generic purchasing improvements, revenue growth and the benefits of actions we have taken to reduce costs should drive improved results in both segments for the remainder of the year. We expect to meet our full-year guidance,” said Rite Aid CEO John Standley.

Related: Rite Aid posts narrower-than-expected Q4 loss

Looking ahead, the company expects net sales to be in the range of $21.5 billion to $21.9 billion in fiscal 2020 and annual same-store sales growth in the range of 0%-1%. Full-year net loss is expected to range from $170 million to $220 million and adjusted EBITDA between $500 million and $560 million. Adjusted bottom-line results are expected to be between a loss of $0.14 per share and a profit of $0.72 per share. Capital expenditures are predicted to be about $250 million.

During the quarter, Rite Aid remodeled 27 stores, bringing the total number of wellness stores to 1,787. It also opened one new store and closed four, resulting in a total store count of 2,466 at the end of the period.

Related: Can Walgreens and CVS Health resist the online invasion?

Rite Aid shares have remained in a perpetual downward spiral for more than two years. They lost 80% in the past twelve months and 57% since the beginning of 2019. The stock, which has long been underperforming the sector, closed Wednesday’s regular session higher but fell sharply in the after-hours.

We’re on Flipboard! Follow us to receive the latest stock market, earnings, and financial news at your fingertips

Most Popular

Context Therapeutics: Another clinical-stage oncology research firm to go public soon

The US primary markets seem to be having a record-breaking start to the year, with over $171 billion raised in the first half of 2021 compared to $168 billion for

Biogen (BIIB) Stock: Does FDA nod for Aduhelm offer a buying opportunity?

The pharmaceutical industry has been witnessing hectic activity for some time, with most drug makers either channelizing their resources for vaccine development or engaging in COVID care programs. Biotechnology giant

IPO News: Monte Rosa Therapeutics will go public this week, here are a few things to know

Biotechnology company Monte Rosa Therapeutics is slated to go public this week. In a pandemic-ridden world, this industry is expanding at a healthy pace. The global biotechnology market is estimated

Add Comment
Viewing Highlight