Rite Aid Misses Profit, Sales Expectations

Rite Aid Corp. reported Thursday a fiscal first-quarter loss of $4.6 million, or breakeven on a per-share basis, compared with earnings of $18.8 million, or 2 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share were 1 cent, below the FactSet consensus of 5 cents. The drug store chain said revenue rose 23% to $8.18 billion, missing the FactSet consensus of $8.24 billion. Retail pharmacy revenue grew 0.4% to $6.7 billion. Same-store sales increased 0.4%, with pharmacy sales rising 0.1% and front-end sales growing 1.2%. As of the end of March, the FactSet consensus was for same-store sales growth of 2.8%. "Our challenge was pharmacy reimbursement rate pressure, which we were unable to offset largely due to drug purchasing efficiencies that did not meet our expectations," said Chief Executive John Standley. "While drug cost reductions will continue to be short of our expectations in the near term, we anticipate improvements over the second half of the fiscal year." The company said its merger with Walgreens Boots Alliance is still expected to close during the second half of 2016. Rite Aid's stock, which was still inactive in premarket trade, has slipped 0.3% year to date, while the S&P 500 has gained 1.4%.