Rite Aid Shares Spike on Narrower Loss and Higher Revenue

Drugstore chain Rite Aid reported top- and bottom-line fiscal-first-quarter results ahead of analyst estimates.
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Shares of Rite Aid  (RAD) - Get Report on Thursday were higher after the drugstore chain reported a slimmer-than-expected fiscal-first-quarter net loss on higher-than-estimated revenue. 

At last check Rite Aid shares were up 21% at $15.54.

For the quarter ended May 30 the Camp Hill, Pa., chain reported its net loss narrowed to $63.5 million, or $1.19 a share, from $99.7 million, or $1.88 a share, in the year-earlier quarter. 

The adjusted loss per share was 4 cents a share, compared with 14 cents a year earlier and below the 38-cent loss analysts surveyed by FactSet were estimating. 

Revenue for the period rose 12% to $6.03 billion vs. estimates of $5.61 billion. 

CEO Heyward Donigan said the company's retail-pharmacy segment's response to the covid-19 pandemic helped fuel the outperformance in the quarter.

The company says that it quickly implemented safety measures and enhanced its digital experience to keep stores open.

Rite Aid saw retail-pharmacy-segment same-store sales rise 6.6% year over year, including a 14% increase in front-end sales. 

During the first three weeks of June, comparable front-end sales excluding tobacco products rose 7.2% from the year-earlier period "due to demand for personal care, paper products and over-the-counter medications." Same-store prescription counts in the period increased 0.8 percentage point from a year earlier.

Among cost-control measures, Rite-Aid "recently eliminated 254 corporate office positions across both our retail-pharmacy and pharmacy-services segments." 

The company withdrew the fiscal 2021 guidance it issued in March due to the lack of visibility surrounding the coronavirus pandemic. 

"There are certainly challenges brought about by covid-19, including the decline in acute prescriptions and increased costs incurred to assure the safety of our associates and customers," Donigan said.