Categories AlphaGraphs, Other Industries
Rite Aid stock tanks to multi-year low after new CEO takes the helm
Drugstore chain Rite Aid’s (NYSE: RAD) shares experienced a negative trend after the company appointed Heyward Donigan as its CEO on August 12, Monday. Rite Aid stock, which closed at $7.19 last Friday, has been continuously declining and it tumbled to a multi-year low ($5.29) in today’s regular trading session. The stock had dropped 25% so far from Friday’s closing price.
On Monday, Rite Aid named Heyward Donigan as CEO with immediate effect. As planned, John Standley stepped down from his role. Most recently, Donigan served as the CEO of Sapphire Digital, which designs and develops omnichannel platforms that help consumers choose their best fit healthcare providers. Since 2015, Donigan led Sapphire Digital’s strategy and operations to record growth and consumer engagement.
Read: Dillard’s (DDS) stock sinks to a new 52-week low as Q2 loss widens and sales drop
The Camp Hill, Pennsylvania-based firm also announced that Ms. Donigan will be granted an employment inducement award, consisting of a restricted stock award with a grant date fair value equal to $2 million and non-qualified stock options with a grant date fair value equal to $2 million.
“Today’s announcement is an important step in positioning Rite Aid for the future, and we are confident that Heyward is the right person to lead the company in capitalizing on the opportunities in the evolving healthcare environment,” said Bruce Bodaken, Rite Aid’s Chairman.
When Rite Aid reported its first quarter 2020 results in June, its bottom line and top-line results missed consensus estimates and the stock slipped 10% immediately after the earnings announcement. Rite Aid’s loss expanded in the recently ended quarter on flat revenue.
Then CEO John Standley stated that first quarter results did not meet the company’s views due to prescription reimbursement rate pressure in the Retail Pharmacy segment and margin compression in the Pharmacy Services segment.
The troubled pharmacy operator has been struggling for a long time. The margins have been under pressure from the high costs and muted sales growth. Rite Aid is also hurt by competition from online pharmacy retailers.
The operational crisis and a couple of failed merger deals had kept the company in the negative zone for more than two years. Rite Aid stock, which dropped 7.75% to $5.36 today, had slumped 62% so far this year and 80% in the past 12 months. Winning investors’ confidence is going to be a herculean task for the new CEO Heyward Donigan.
Most Popular
Earnings Preview: Microsoft expected to report higher Q3 revenue, profit
Tech behemoth Microsoft Corp. (NASDAQ: MSFT) is preparing to report its third-quarter 2025 results, amid expectations for a year-over-year increase in revenue and earnings. The company has performed well recently,
What to expect when eBay (EBAY) reports its Q1 2025 earnings results
Shares of eBay Inc. (NASDAQ: EBAY) were down slightly in midday trade on Friday. The stock has gained 8% year-to-date. The ecommerce giant is slated to report its earnings results
AbbVie Q1 2025 adjusted earnings increase on 8% revenue growth; beat estimates
Biopharmaceutical company AbbVie, Inc. (NYSE: ABBV) announced first-quarter 2025 financial results, reporting an increase in revenue and adjusted earnings. The company reported worldwide net revenues of $13.3 billion for the
Comments
Comments are closed.