Rite Aid logged disappointing earnings and sales results in its first quarter amid pharmacy reimbursement rate pressure.
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The company said Thursday that it was unable to offset that pressure "largely due to drug purchasing efficiencies that did not meet our expectations," said Chief Executive John Standley. He said drug cost reductions will continue to be short of the company's expectations in the near term, but that the pressure should lessen in the second half of the year.
The third-largest drugstore chain agreed last October to merge with No. 1 Walgreens Boots Alliance Inc. in a $17.2 billion deal. The company said it still expects the deal, which is undergoing antitrust scrutiny, to close in the second half of the year.
Sales at established stores rose 0.4% in the first quarter from a year ago. On that basis, pharmacy sales inched up 0.1% as the number of prescriptions filled grew 0.6%.
In February 2015, Rite Aid agreed to buy pharmacy-benefit manager Envision Pharmaceutical Services for about $2 billion. Revenue in Rite Aid's larger retail pharmacy segment, meanwhile, increased 0.4% to $6.7 billion.
The chain, like its rivals, has adjusted its offerings to broaden its business model as the pharmacy and drugstore industry expands into the health and wellness sector. During the quarter, it added two new RediClinics, bringing its total to 80, and remodeled 79 wellness stores, which offer organic food and natural personal-care options and feature consultation rooms for discussions with pharmacists.
Rite Aid reported a loss of $4.6 million, or break-even on a per-share basis, compared with a profit of $18.8 million, or 2 cents a share, a year earlier. Excluding certain items, adjusted per-share earnings fell to a penny a share from 2 cents a year earlier.
Revenue climbed 23% to $8.18 billion.
Analysts polled by Thomson Reuters had forecast adjusted earnings of 5 cents on $8.26 billion in revenue.
Shares, down 13% this year, were inactive during premarket trading.
Write to Anne Steele at Anne.Steele@wsj.com