Rite Aid Jumps on Wide Earnings Beat, Increased 2021 Guidance

Rite Aid expects fiscal 2021 profit of between 45 cents and 85 cents a share.
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Shares of Rite Aid  (RAD) - Get Report jumped in premarket trading Thursday after the pharmacy retailer reported third-quarter earnings and sales that topped estimates and said it expects to post a profit for fiscal 2021.

The Camp Hill, Pennsylvania-based company said third-quarter revenue rose 12% to $6.12 billion with adjusted earnings of 40 cents a share. 

Analysts were expecting revenue of $5.84 billion and earnings of 2 cents.

"We are pleased with our third-quarter performance as we continue to grow our business and achieve major physical and digital milestones through our RxEvolution strategy," said CEO Heyward Donigan. "We officially launched our new brand and logo, made substantial progress in evolving our merchandise mix to an assortment that best supports whole health."

Shares of Rite Aid jumped 20.6% to $20.67 on Thursday. 

The company also raised its fiscal 2021 revenue guidance to between $23.9 billion and $24.2 billion from $23.5 billion and $24 billion. Same- store sales growth is expected to range between 3.5% and 4.5%, up from Rite Aid's previous view of between 3% and 4%. 

Earnings are now expected to range between 45 cents and 85 cents per share, up from its expectations of a range between a loss of 67 cents a share and a profit of 9 cents.

Analysts expecting 2021 revenue of $23.76 billion with a net loss of 9 cents a share. 

"We are accelerating the key initiatives that support our strategy, and we will continue to deliver the operational excellence needed to achieve strong results as we generate cash flow, reduce debt and improve our leverage ratio," Donigan said.