Rite Aid to close 145 stores; pharmacy sales fuel strong Q4 sales
Rite Aid reported mixed fourth-quarter results as charges widened its loss, but revenue topped expectations, driven by strong prescription growth.
The pharmacy retailer said it expects to drive savings of $170 million in its current fiscal year through the closure of 145 unprofitable stores (63 of which were announced last quarter), a reduction in corporate administrative expenses and improved efficiencies in store labor costs. It has also reduced expenses at its pharmacy services provider, Elixir.
Rite Aid posted a net loss of $389.1 million, or $7.18 per share, for the quarter ended Feb. 26, compared to a loss of $18.5 million, or $0.34 per share, last year. Adjusted losses were $1.63 per share, Analysts had expected a loss of $0.43 per share.
Rite Aid attributed the net loss growth to a goodwill impairment charge of $229.0 million in the pharmacy services segment. Other factors include impairment charges from store closures, leasebacks on stores and distribution centers and a gain from the acquisition of Bartell Drugs the year prior.
Revenue rose to $6.065 billion from $5.917 billion, ahead of analysts’ estimates of $5.470 billion. Retail pharmacy segment revenues increased 7.8% for the quarter and 12% for the full year.
Same-store sales increased 8.3% during the quarter, with a 10.7% increase in pharmacy sales and a 2.7% increase in front-end sales. Prescription sales from continuing operations accounted for 70.1% of total drug store sales.
“We exceeded our 2022 plan amid continuing challenges of the COVID-19 pandemic, said Heyward Donigan, president and CEO. “As we look forward to the year ahead, we are ready and energized to compete in a new post-pandemic normal. We demonstrated the important role that pharmacists play in the everyday health of our customers and are well positioned to grow in a trillion-dollar pharmacy market through our continued leadership as a full-service pharmacy company.”
[Read More: Rite Aid shuffles management team; eliminates COO role]
For fiscal 2023, Rite Aid expects revenue between $23.1 billion and $23.5 billion and adjusted net loss between $0.53 and $1.06 per share. Analysts were looking for revenue of $21.409 billion and a loss of $1.22 per share.
Rite Aid operates 2,400 stores across 17 states.