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Rite Aid beats estimates as Q3 profit soars

Rite Aid Corp. on Wednesday posted a big jump in quarterly profit as the drug store retailer benefited from its ongoing sale of 1,932 stores to Walgreens Boots Alliance Inc.

Net income rose to $81.03 million, or 8 cents per share, in the quarter ended Dec. 2, from $15.01 million, or 1 cent per share, in the year-ago period. Analysts had projected a loss of two cents per share.

Total revenue fell 5.6% to $5.4 billion from $5.7 billion last year. Same-store sales fell 2.5%, consisting of a 3.5% decline pharmacy sales and a 0.5% decrease in front-end sales.

“The third quarter was a busy time for our team in preparing for and beginning the transfer of stores and related assets to Walgreens Boots Alliance,” said Rite Aid chairman and CEO John Standley. “To date, we have transferred 357 stores and have received approximately $715 million in proceeds, which we have used to pay down debt. Looking forward, in addition to completing the transfer process, we will continue to focus on our most significant business-building opportunities as we work together to deliver a great experience to our customers and patients."

In the third quarter, the company sold 97 stores to Walgreens and closed seven stores, resulting in a total store count of 4,404 at the end of the third quarter.
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