Are Rite Aid Earnings Good Enough?

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When Rite Aid Corp. (NYSE: RAD) released its fiscal third-quarter earnings report after the markets closed on Wednesday, the company said that it had $0.01 in earnings per share (EPS) and $5.45 billion in revenue. That compares with consensus estimates calling for a net loss of $0.01 per share on $5.45 billion in revenue. The same period of last year reportedly had EPS of $0.01 and revenue of $5.35 billion.

In this most recent quarter, same-store sales from Retail Pharmacy continuing operations for the quarter increased 1.6% compared to in the prior year, consisting of a 3.1% increase in pharmacy sales and 1.5% decrease in front-end sales.

Retail Pharmacy Segment revenues totaled $4.0 billion and increased 0.4% from the prior-year period due to an increase in same-store sales, partially offset by a reduction in store count. Revenues in the Pharmacy Services Segment were $1.5 billion, an increase of 5.6% compared to the prior-year period, which was due to an increase in Medicare Part D membership.

In terms of guidance for the 2019 fiscal full year, Rite Aid expects to see a net loss per share in the range of $0.03 to $0.01 and revenues between $21.8 billion and $21.95 billion. The consensus estimates are a net loss of $0.01 per share and $21.79 billion in revenue for the year.

Rite Aid CEO John Standley commented:

Our third quarter results reflect the progress we’re making in growing our retail and pharmacy benefits management businesses. We realized our strongest prescription count performance in over two years and our best comparable store sales in over three years, driven by the success of our immunization business and other clinical pharmacy services that are benefiting our patients. We grew revenue by 5.6 percent at our EnvisionRxOptions PBM, driven by growth in our Medicare Part D membership. We look forward to building on this momentum by further improving clinical services in our pharmacy business, enhancing the customer experience in all channels and investing for further growth in both our retail and pharmacy services businesses.

Shares of Rite Aid were up as much as 13%, but as the day has gone on shares are only up 1% at $0.82. The consensus analyst price target is $1.20, and the stock has a 52-week trading range of $0.80 to $2.55.

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