Skip to content

Rite Aid’s retail division reports robust growth in first quarter

Table of Contents

CAMP HILL, Pa. — Rite Aid Corp. recently posted results for the first quarter of fiscal 2022 that fell short of some analysts’ projections, although the company’s Retail Pharmacy Segment achieved robust sales and profit growth. However, the company’s full-year earnings forecast disappointed Wall Street, which drove down Rite Aid’s stock price by nearly 15% on the day results were announced.

The reported net loss from continuing operations for the 13 weeks ended May 29 fell to $13.1 million, or 24 cents per share, from a year-ago deficit of $72.7 million, or $1.19 per share. The company attributed the bottom-line improvement to better results in the Retail Pharmacy Segment.

Excluding special items that totaled $28.4 million pretax and included $20.5 million in amortization expense, a $14 million charge for litigation settlements and $5.93 million in restructuring costs, adjusted results swung to a profit of $20.9 million from a prior-year adjusted loss of $2 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations vaulted 29.3% to $138.9 million.

Adjusted earnings of 38 cents per share were up from an adjusted loss of 4 cents per share a year ago, and exceeded some consensus estimates while trailing others. For example, the Zacks Consensus Estimate forecast adjusted earnings of 42 cents per share, whereas analysts polled by FactSet expected adjusted earnings of 28 cents per share.

Turning to the top line, revenues increased 2.2% to $6.16 billion, coming in just below the Zacks estimate of $6.17 billion and trailing the FactSet prediction of $6.2 billion.

“We are pleased with our first quarter results, as we delivered adjusted EBITDA at the top end of our guidance range and continued our extraordinary efforts to vaccinate Americans against COVID-19,” said Heyward Donigan, president and chief executive officer. “As a result of the tireless efforts and dedication of our teams, I am proud to announce that we delivered nearly 4.7 million COVID-10 vaccines in the first quarter. We have now provided over 6 million COVID-19 vaccines since we began administering shots late last fiscal year.”

Taking a closer look at Rite Aid’s two operating segments, the retail drug store business, as indicated above, achieved impressive gains in sales and profits. Revenues from continuing operations expanded 5.5% to $4.35 billion, while adjusted EBITDA from ongoing lines soared 50.7% to $94.9 million.

According to the company, the top-line growth was fueled by improved same-store sales and the inclusion of results from the acquired Bartell Drugs stores.