CAMP HILL, Pa. — Rite Aid Corp. posted results for the first quarter of fiscal 2022 that fell short of some analysts’ projections although the company’s retail pharmacy segment achieved robust sales and profit growth.

The reported net loss from continuing operations for the 13 weeks ended May 29 fell to $13.1 million, or 24 cents per share, from a year-ago deficit of $72.7 million, or $1.19 per share. The company attributed the bottom-line improvement to improved results in the Retail Pharmacy Segment.

Excluding special items that totaled $28.4 million pretax and which included $20.5 million in amortization expense, a $14 million charge for litigation settlements, and $5.93 million in restructuring costs, adjusted results swung to a profit of $20.9 million from a prior-year adjusted loss of $2 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations vaulted 29.3% to $138.9 million.

Adjusted earnings of 38 cents per share were up from an adjusted loss of 4 cents per share a year ago, and exceeded some consensus estimates while falling short of others. For example, the Zacks Consensus Estimate forecast adjusted earnings of 42 cents per share, whereas analysts polled by FactSet expected adjusted earnings of 28 cents per share.

Turning to the top line, revenues increased 2.2% to $6.16 billion, falling just short of the Zacks estimate of $6.17 billion and trailing the FactSet prediction of $6.2 billion.

“We are pleased with our first-quarter results, as delivered adjusted EBITDA at the top end of our guidance range and continued our extraordinary efforts to vaccinate Americans against COVID-19,” said Heyward Donigan, president and chief executive officer. “As a result of the tireless efforts and dedication of our teams, I am proud to announce that we delivered nearly 4.7 million COVID-10 vaccines in the first quarter. We have now provided over 6 million COVID-19 vaccines since we began administering shots late last fiscal year.”

Taking a closer look at Rite Aid’s two operating segments, the retail drug store business, as indicated above, achieved impressive gains in sales and profits. Revenues from continuing operations expanded 5.5% to $4.35 billion, while adjusted EBITDA from ongoing lines soared 50.7% to $94.9 million.

According to the company, the top-line growth was fueled by improved same-store sales and the inclusion of results from the acquired Bartell’s stores. Overall same-store sales gained 1.4%, reflecting an 8.2% surge at the pharmacy that was offset by a 12% drop in front-end sales.

Excluding cigarettes and other tobacco products, front-end same-store results declined 11.5%, reflecting decreases in general cleaning products, sanitizers, wipes, paper products, liquor and over-the-counter medications, all of which saw sales spikes at the height of the pandemic a year ago.

The pharmacy made up for the front-end performance, though, as the number of same-store prescriptions filled, adjusted to 30-day equivalents, climbed 11.2%. Prescription sales from continuing operations made up 68.9% of total drug store sales.

The improved profitability of the retail segment reflected a 65-basis-points improvement in gross margin from continuing operations to 26.88% and a 33-basis-points drop in SG&A expense to 26.57% of revenues. Higher pharmacy same-store sales drove the improvement in gross profit and margin, partially countered by pharmacy reimbursement rate pressures that were not fully offset by generic drug cost reductions, coupled with a decrease in front-end gross profit.

Turning to Rite Aid’s Pharmacy Services Segment, which consists of its Elixir pharmacy benefits management (PBM) unit, revenues slid 5.3% to $1.87 billion due to the loss of a large customer account and a planned decrease in Medicare Part D membership. Adjusted EBITDA from ongoing lines edged down 1% to $44 million, as improvements in the unit’s discount card business and good network management were countered by the drop in revenues and an increase in the medical loss ratio related to the company’s Medicare Part D business.

Looking ahead, management expects full-year revenues for fiscal 2022 to range between $25.1 billion and $25.5 billion, while the adjusted net loss per share is gauged to come in between 79 cents and 24 cents per share. Analysts surveyed by Thomson Reuters were expecting adjusted earnings of 80 cents per share on revenues of $24.66 billion.

“Our results improved sequentially through the first quarter, and we have momentum in several areas of our business as the country began taking meaningful steps towards a post-pandemic world,” Donigan remarked. “With a healthier economy and the reopening of the communities we serve, combined with the execution of our RxEvolution strategy, we are well-positioned to deliver on our strategic priorities.”