Rite Aid reports mixed results for second quarter

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PHILADELPHIA — Rite Aid posted mixed results for the second quarter of its 2023 fiscal year, with sales that beat analysts’ expectations but were accompanied by a larger-than-expected loss. The company’s $5.9 billion in revenue topped Wall Street’s forecast of $5.77 billion. But its adjusted 63 cents per share loss was worse than the anticipated 55 cents per share shortfall.

For fiscal 2023, Rite Aid now foresees an adjusted loss of between 97 cents and $1.52 per share, deeper than the previously forecast loss of 66 cents to $1.19 per share. But the company maintains its projection for total revenues of between $23.6 billion and $24.0 billion.

“We’ve made good progress on key initiatives during the quarter: driving prescription growth and market share, improving operating margins at Elixir, and achieving reductions in SG&A expenses across our business,” said Heyward Donigan, president and chief executive officer. “As we look to the second half of the year, we expect continued pressure on consumer spending and supply chain challenges. At the same time, we are ready to meet a high demand for immunizations, while driving continued strong performance at Elixir and further SG&A expense reductions.”

For the quarter ended August 27, the company reported a net loss of $331.3 million, or $6.07 per share. That compares to the year-ago net loss of $100.3 million, or $1.86 per share. The increase in net loss is due primarily to a current quarter charge of $252.2 million, or $4.62 per share, for the impairment of goodwill related to the Pharmacy Services Segment. The net loss was also impacted by higher facility exit and impairment charges driven by previously announced store closures. These items are partially offset by a gain on repurchase of certain bonds at a discount, a gain on sale of assets resulting from sale leasebacks of two distribution centers and script file sales resulting from the store closures.

The $5.9 billion revenue in the period was down from $6.11 billion in the prior year’s quarter, largely because of a reduction in revenue from COVID vaccines and testing, store closures, and a planned loss of covered lives at Elixir. Same-store sales increased 5.6%, with an 8% increase in pharmacy sales partially offset by a 0.3% decrease in front-end sales.

Retail Pharmacy Segment revenues fell by 1.1%, hurt 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. Front-end same-store sales, excluding cigarettes and tobacco products, increased 0.2%. Total store count at the end of the second quarter was 2,352.


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