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CAMP HILL, Pa. — Rite Aid Corp. reported better-than-expected third quarter sales and earnings. The company also narrowed its fiscal 2020 earnings forecast while maintaining its revenue guidance. The results lifted the retailer’s shares more than 20% to over $10.
For the quarter ended November 30, adjusted net income was $29.1 million, or 54 cents per share, up 93% from the year-ago period. Revenues were $5.46 billion, up from $5.45 billion.
Net income from continuing operations was $52.3 million, or 98 cents per share, Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was $158.1 million, or 2.9% of revenues.
“Our team delivered a strong quarter that provides us with momentum as we prepare to roll out our long-term strategy and position Rite Aid Corp. as an innovative leader in our industry,” chief executive officer Heyward Donigan said. “Adjusted EBITDA grew in our retail business due to tight expense control and prescription count growth in our retail pharmacies, which benefited from solid growth in immunizations. At the same time, we saw improved pharmacy network management at EnvisionRxOptions.
“While we are pleased with these results, we have important work ahead of us to put our company on a path to long-term sustainable growth. We will soon reveal our comprehensive strategy that revitalizes Rite Aid retail pharmacies as fresh and relevant, leveraging the trust and expertise of our pharmacists in meeting the unique health and well-being needs of our communities. We are also investing in the expansion and integration of EnvisionRxOptions, particularly its services, technologies and clinical offerings. This will provide us scale to deliver lower total cost of care, an enhanced client experience and heightened consumer engagement. We are making great progress, and we are excited to share more details at our upcoming Analyst Day on March 16.”
Retail Pharmacy segment revenues were $3.91 billion, down 1.7% from last year due to a reduction in store count. Revenues in the Pharmacy Services segment were $1.61 billion, up 5.7% due to an increase in Medicare Part D membership.
Same-store sales fell 0.1%, the result of a 0.1% increase in pharmacy sales and a 0.5% decrease in front-end sales. Front-end same-store sales, excluding cigarettes and tobacco products, advanced 1%. Pharmacy sales were negatively impacted by approximately 331 basis points as a result of new generic introductions. Prescription sales accounted for 67.7% of total drug store sales.
