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Rite Aid Posts Surprise Adjusted Profit; 63 Stores to Close

Rite Aid posted a surprise adjusted profit of 15 cents a share for the latest quarter. The FactSet analyst consensus was an 18-cent loss.
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Rite Aid  (RAD) - Get Rite Aid Corporation Report shares advanced on Tuesday after the drugstore chain’s latest quarterly earnings exceeded expectations and it said it would close 63 stores.

For the fiscal 2022 third quarter, ended Nov. 27, Rite Aid posted a net loss of $36.1 million, or 67 cents a share, swinging from net income of $4.3 million, or 8 cents a share, in the year-earlier quarter.

But the company recorded adjusted profit of 15 cents a share for the latest quarter, beating the FactSet analyst consensus of an 18-cent loss.

Revenue hit $6.23 billion in the latest quarter, up 2% from $6.12 billion a year ago. The latest figure trailed the analyst consensus of $6.32 billion.

"Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for Covid and flu immunizations, Covid testing and other clinical services, which clearly demonstrates our Lean work to free up capacity is paying off," Heyward Donigan, president and chief executive, said in a statement.

The store closures will boost earnings before interest, taxes, depreciation and amortization by $25 million a year, Rite Aid said. It began shuttering locations last month.

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After the 63 closures, Rite Aid will be operating about 2,450 stores.

Rite-Aid also expects the number of store closures to increase as it completes a review of its store base over the next several months

For all of fiscal 2022, Rite Aid predicts an adjusted loss of 4 cents to 49 cents a share on revenue of $24.4 billion to $24.7 billion. Analysts in the FactSet survey forecast a 77-cent loss per share and revenue of $25 billion.

Rite Aid recently traded at $14.94, up 20%. But it’s still down 28% for the past six months.

Meanwhile, the CEOs of Rite Aid and a host of other retailers are seeking congressional action on a spate of smash-and-grab thefts.

The others include Target  (TGT) - Get Target Corporation Report, AutoZone  (AZO) - Get AutoZone, Inc. Report and CVS Health  (CVS) - Get CVS Health Corporation Report, Home Depot  (HD) - Get Home Depot, Inc. Report, Kroger  (KR) - Get Kroger Co. Report, Neiman Marcus, Levi Strauss  (LEVI) - Get Levi Strauss & Co. Class A Report, Walgreens Boots Alliance  (WBA) - Get Walgreens Boots Alliance Inc Report and Best Buy  (BBY) - Get Best Buy Co., Inc. Report.

It’s common for the stolen goods to be sold online.