PHILADELPHIA — Rite Aid Corp. reported a narrower-than-projected loss and topped Wall Street’s revenue forecast for its third quarter.
The company reported an adjusted loss of $7.9 million, or 14 cents a share. Analysts had estimated it would be 15 cents a share. Revenue of $6.08 billion bettered Wall Street’s expectation of $5.94 billion.
For the three months ended November 26, Rite Aid posted a net loss of $67.1 million, or $1.23 loss per share, wider than the year-ago loss of $36.1 million, or 67 cents per share. The bigger loss was due primarily to a decrease in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), an increase in interest expense and an increase in restructuring charges. These items were partially offset by a reduction in facility exit and impairment charges. Adjusted EBITDA was $121.9 million, or 2% of revenues.
Revenue was down from $6.23 billion last year, largely due to a reduction in revenue from COVID vaccines and testing, store closures and a planned loss of covered lives at Elixir. These items were partially offset by increases in both comparable front-end sales and non-COVID prescriptions.
“Our third quarter beat consensus on top and bottom line, and we’re pleased with our results at Elixir and our accelerated sales growth at retail. However, based on recent trends, we are lowering our full-year guidance due to headwinds including pharmacy margin, seasonal markdowns and higher shrink,” said president and chief executive officer Heyward Donigan. “In addition, we are kicking off a performance acceleration program, which allows us to fast-track initiatives that will improve sales, script volume and operating margins, and free up cash. We look forward to updating you on our progress at year-end.”
Retail Pharmacy Segment revenues decreased 0.5% over the prior-year quarter, driven by a reduction in COVID vaccine and testing revenue as well as store closures, partially offset by an increase in both acute and maintenance prescriptions. Same-store sales for the third quarter increased 7.5% over the prior-year period, consisting of a 9.5% increase in pharmacy sales and a 2.2% increase in front-end sales. Front-end same-store sales, excluding tobacco products, increased 2.7%. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 4.4% over the prior-year period. Total same-store prescriptions, excluding COVID immunizations, increased 3.6%, with same-store maintenance prescriptions increasing 2.1% and other same-store acute prescriptions increasing 8%. Prescription sales accounted for 72% of total drug store sales. Total store count at the end of the third quarter was 2,324.
Retail Pharmacy Segment adjusted EBITDA was $81.7 million, or 1.9% of revenues, for the third quarter compared to last year’s adjusted EBITDA of $125.9 million, or 2.8% of revenues.
Pharmacy Services Segment revenues were $1.7 billion for the quarter, down 7.1%. The decrease was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss due to industry consolidation, partially offset by increased utilization of higher-cost drugs.
Pharmacy Services Segment adjusted EBITDA was $40.2 million, or 2.3% of revenues, for the third quarter compared to last year’s adjusted EBITDA of $28.9 million, or 1.6% of revenues.
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