Rite Aid Q1 profit falls; sees big gain ahead

Camp Hill, Pa. -- Rite Aid's first-quarter earnings plunged 55%, mainly on costs tied to a $2 billion acquisition. The chain also lowered its full-year profit outlook.



The drugstore chain in February announced that it would buy pharmacy benefits manager EnvisionRx. Rite Aid said it expects the deal, expected to close by the beginning of July, to increase its annual revenue by as much as 18.6%.



The retailer earned $18.8 million in the quarter that ended May 30, down from $41.4 million in the year ago period.



Revenue rose 2.8 % to $6.65 billion in the period.



For fiscal 2016, Rite Aid expects drug store sales to reach between $26.9 billion and $27.4 billion and same-store sales to range from an increase of 2.5% to an increase of 4.5% over fiscal 2015. Capital expenditures are expected to be approximately $665 million.



Adjusted EBITDA guidance is expected to be between $1.35 billion and $1.45 billion and net income is expected to be between $150 million and $230 million or income per diluted share of $0.14 to $0.22.