Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Rite Aid Posts Profit In Q1, Lowers 2014 Earnings Outlook

RELATED NEWS
Trade RAD now with 

Retail drugstore chain operator Rite Aid Corp. (RAD: Quote) on Thursday reported a turnaround to profit in the first quarter, reflecting higher margins and lower expenses that helped offset a decline in revenue. Both revenue and earnings per share for the quarter matched analysts' estimates.

Looking ahead to fiscal 2014, Rite Aid lowered its earnings outlook citing a charge from recent debt refinancing transactions, but affirmed its forecast for revenue and same-store sales.

John Standley, Rite Aid Chairman, President and CEO said, "We kicked off our new fiscal year by posting strong first-quarter results that reflect our continued operational and financial progress. During the quarter, we generated net income for a third consecutive quarter and increased Adjusted EBITDA by more than $70 million over last year's first quarter."

Rite Aid's net income for the first quarter was $89.66 million or $0.09 per share, compared to net loss of $28.09 million or $0.03 per share in the year-ago period. The prior-year quarter's results included a $20.9 million charge for a settlement of a series of wage and hour class action lawsuits.

On average, 4 analysts polled by Thomson Reuters expected the company to report earnings per share of $0.09 for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined 3 percent to $6.29 billion from $6.47 billion in the prior-year quarter, due mainly to the impact of lower cost generics on pharmacy same-store sales. Analysts had a consensus revenue estimate for the quarter of $6.27 billion.

Gross margin for the quarter increased to 28.94 percent from 27.04 percent in the year-ago period.

Same-store sales for the quarter declined 2.5 percent year-on-year, consisting of a 3.8 percent drop in pharmacy sales, partially offset by a 0.4 percent increase in front end sales.

Pharmacy sales included an approximate 458 basis point negative impact from new generic introductions.

The number of prescriptions filled in same stores declined 0.1 percent over the previous year. Prescription sales accounted for 67.5 percent of total drugstore sales, and third party prescription revenue was 97.0 percent of pharmacy sales.

Looking ahead to fiscal 2014, Rite Aid forecasts net income in a range of $22 million to $162 million, or $0.01 to $0.16 per share. Earlier, the company forecast net income between $45 million and $200 million or $0.04 per share to $0.20 per share.

The revised earnings outlook reflects the anticipated charge from Rite Aid's recently announced debt refinancing transactions, and the interest savings from those transactions.

However, Rite Aid confirmed its fiscal 2014 guidance for sales, same store sales and adjusted EBITDA that was updated on June 7, 2013. The company affirmed its outlook for sales between $24.90 billion and $25.30 billion and same store sales to range from a decrease of 0.75 percent to an increase of 0.75 percent compared to fiscal 2013.

Analysts expect the company to report earnings of $0.17 per share for the year on revenue of $25.23 billion.

Rite Aid said it expects combined annual cash interest savings of $85 million from the February refinancing and two recently announced refinancings. These refinancings will extend debt maturities to 2018 and beyond.

RAD closed Wednesday's trading at $3.11. In Thursday's pre-market, the stock is down $0.04 or 1.29 percent to $3.07.

Register
To receive FREE breaking news email alerts for Rite Aid Corp. and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Amazon.com, Inc. said Thursday that its second quarter loss widened from last year, as operating expenses outpaced revenue growth amid heavy spending on new technology and contents. The company's quarterly loss per share was also wider than what analysts expected, but is quarterly sales came in line with analysts' forecast. The company also forecast an operating loss for the current quarter. After failing to sustain an initial upward move, stocks showed a lack of direction throughout much of the trading day on Thursday. The major averages eventually closed nearly unchanged, turning in a mixed performance for the second straight day. New home sales in the U.S. showed a notable decrease in the month of June, according to a report released by the Commerce Department on Thursday, with the steep drop offsetting the jump seen in the previous month.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.