Rite Aid Surprises Big With Earnings and Amazon Partnership
When Rite Aid Corp. (NYSE: RAD) reported its most recent quarterly results late on Wednesday, the retailer said that it had a net loss of $0.14 per share and $5.37 billion in revenue. Consensus estimates had called for a net loss of $0.07 per share and $5.38 billion in revenue, and the fiscal first quarter of last year reportedly had a net loss of $0.20 per share and $5.39 billion in revenue.
During the latest quarter, the Retail Pharmacy segment revenues were $3.86 billion, a decrease of 0.8% compared to the prior year period due to a reduction in store count, partially offset by an increase in same-store sales. Revenues in the Pharmacy Services segment were $1.57 billion, an increase of 1.5% compared to the prior-year period, which was due to an increase in Medicare Part D revenue.
Same-store sales from Retail Pharmacy continuing operations for the first quarter increased 1.4% over the prior year, consisting of a 2.3% increase in pharmacy sales and a 0.3% decrease in front-end sales.
Looking ahead to fiscal 2020, the company expects to see a net (loss) income in the range of ($0.14) to $0.72 and net sales in the range of $21.5 billion to $21.9 billion. Consensus estimates call for a net loss of $0.02 per share and $21.6 billion in revenue for the fiscal year.
Separately, Amazon.com Inc. (NASDAQ: AMZN) announced a partnership with Rite Aid that would allow customers to retrieve their orders with same-day, one-day and standard shipping service at Rite Aid locations. The service is starting at more than 100 locations and is looking to expand to more than 1,500 locations by the end of the year.
John Standley, Rite Aid CEO, commented:
While first quarter results did not meet our expectations due to prescription reimbursement rate pressure in the Retail Pharmacy Segment and margin compression in the Pharmacy Services Segment, we are pleased with the improvements in our top-line growth and operating efficiency in the Retail Pharmacy Segment and Medicare Part D revenue growth in the Pharmacy Services Segment.
Shares of Rite Aid were up about 12% at $7.98 on Thursday, in a 52-week range of $6.14 to $40.40. The consensus price target is $9.00.