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Pharmacy retailer Rite Aid swung to a much larger profit than expected in the third quarter, from a loss last year, with help from debt retirements and an increased EBITDA. In a heavily short market it popped 45% after the release.

 Rite Aid

 

 

Rite Aid Corporation NYSE: RAD Reported Earnings Before Open Thursday

$0.96 Beat $0.09 EPS And $2.99B Beat $5.42 Billion Forecast in Revenue. 

Earnings 

Rite Aid reported net income was $51.5 million or $0.96 per share compared to a loss of $4.5 million or $0.09 per share in the previous year quarter. Adjusted earnings rose 93% to $0.54 per share, crushing analysts’ expectations of $0.09 per share. ;

Revenue rose by 0.2% to $5.46 billion, higher than the consensus estimates of $5.42 billion. Same-store sales from the Retail Pharmacy declined by 0.1%, which consists of a 0.1% rise in pharmacy sales and a 0.5% decrease in front-end sales. Front-end same-store sales, excluding cigarettes and tobacco products, rose by 1%. Pharmacy sales were negatively impacted by about 331 basis points as a result of new generic introductions.

 

Rite Aid Corporation NYSE: RAD

Market Reaction - Lunch $12.10 +3.75 (+44.91%)

Highlights

  • Revenue from the Retail Pharmacy segment declined by 1.7% due to a reduction in store count
  • Pharmacy Services segment rose by 6% helped by an increase in Medicare Part D membership.
  • The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 2.8% over the prior-year period resulting primarily from its continued emphasis on driving clinical services, including immunizations.
  • Prescription sales from continuing operations accounted for 67.7% of total drugstore sales.

Rite Aid Q3 2020 Earnings

Outlook

  • Looking ahead into fiscal 2020, the company still expects net sales to be in the range of $21.5 billion to $21.9 billion and annual same-store sales growth in the range of 0-1%.
  • The adjusted EPS guidance is narrowed to the range of $0.13-0.55 from the prior range of $0.00-0.56. T
  • The company’s outlook assumes continued prescription count growth, improvements in generic drug costs and strong SG&A expense control, offset by a decline in prescription reimbursement rates.
  • Adjusted EBITDA is now expected to be $515-545 million. Capital expenditures are anticipated to be about $230 million for the full year.

The company continues to face weakness in the Retail Pharmacy segment because of a decline in foot traffic count at its stores. The significant opportunity for the company, digital business, is likely to be the major contributor to the growth in the long term.

 

Source: RAD, AlphaStreet

From The TradersCommunity Research Desk

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