Rite Aid Posts Fourth-Quarter Loss Wider Than Estimated

Drugstore operator Rite Aid posted a fourth-quarter loss that was wider than Wall Street expected.
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Rite Aid  (RAD) - Get Report posted a wider-than-expected fourth-quarter loss, and the drugstore chain warned of a "tempered decline" in front-end sales during the rest of the first quarter due to the coronavirus pandemic.

The Camp Hill, Pa., company's shares at last check were off 13% to $12.60.

For the quarter ended Feb. 29 Rite Aid's net loss widened to $324.7 million, or $6.08 a share, from $273 million, or $5.15, in the year-earlier period. The latest adjusted loss came to 37 cents, wider than the consensus estimate of a loss of 15 cents in a FactSet survey.

Revenue totaled $5.73 billion, up 6.5% from $5.38 billion a year earlier and beating FactSet's $5.59 billion consensus.

The retail pharmacy segment posted revenue of $3.99 billion, up 0.6%. The pharmacy services segment revenue came to $1.8 billion, up 23%, due to an increase in Medicare Part D membership.

Retail pharmacy same-store sales rose 1.6%, short of FactSet's consensus for a same-store sales increase of 2.4%.

During March, Rite Aid reported a 33% increase in comparable front-end sales due to demand for personal-care items, paper products and over-the-counter medications, and increases in 30-day comparable adjusted prescriptions of 8.3% due to increased fills of maintenance medications.

The company said the favorable results will be tempered by a decline in front-end sales during the rest of the first quarter of fiscal 2021.

That's due to social-distancing measures put in effect in response to the coronavirus pandemic, and a moderating prescription count due to the timing of maintenance-medication fills and a potential prolonged acute prescription decline.

"At this time, the company does not have enough information about the ultimate impact of covid-19 on fiscal 2021 results to justify changing guidance," Rite Aid said in a statement.

"It is important to note that the impacts of covid-19 on our business are fluid and difficult to predict and these estimates could materially change."

Rite Aid maintained its forecast for between an adjusted loss per share of 22 cents to earnings per share of 19 cents and revenue between $22.5 billion and $22.9 billion.

The company has liquidity of $1.9 billion, including $1.7 billion from a revolving credit facility and $180 million cash on hand.

Rite Aid said it is taking several steps in response to the pandemic, which includes plans to hire an additional 5,000 full and part-time employees to support store and distribution-center teams.

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