Rite Aid Corp. loss widens in Q4; front-end sales up 33% in March
Rite Aid reported a wider-than-expected loss in its fourth quarter and warned of a "tempered decline" in front-end sales during the first quarter after an increase in March due to the Covid-19 pandemic.
The company’s net loss totaled $324.7 million, or $6.08 per share, for the quarter ended Feb. 29, compared to a loss of $273.0 million, or $5.15 per share, in the year-ago period. Adjusted loss was $0.37, greater than the $0.15 cents per share loss analysts were expecting.
Revenue rose to $5.73 billion from $5.38 billion last year, beating the $5.59 billion that analysts had predicted. Retail pharmacy revenue rose 0.6% to $3.99 billion; pharmacy services revenue increased 23.1% to $1.8 billion. Retail pharmacy same-store sales rose 1.6%.
"As we begin the new fiscal year, Rite Aid’s top priority is to continue providing the essential care, services and products that our communities need during the COVID-19 crisis," said Heyward Donigan, president and CEO, Rite Aid. “There has never been a more important time to be a pharmacy company, and we remain committed to serving as a trusted and essential resource for medications, supplies and services in our communities."
Rite Aid has taken a number of steps amid the coronavirus pandemic, including announcing plans to hire 5,000 full-time and part-time workers, offering worker bonuses and increased employee discounts, and implementing specific procedures to maintain a safe and healthy environment for employees and customers. It also is working with the U.S. Department of Health and Human Services to pilot new testing models.
The company said it comparable front-end sales rise 33% in March due to increased demand for personal care, paper products and increases in 30-day prescription count. But the results were “tempered” by a decline in front-end sales during the remainder of the first quarter of fiscal 2021 due to in-store social distancing measures and a moderation in prescription count due to the timing of maintenance medication fills and a potential prolonged acute prescription decline.
Rite Aid has liquidity of $1.9 billion including $1.7 billion from a revolving credit facility and $180 million cash on hand. The retailer said it does have enough information about the ultimate impact of coronavirus to justify changing its fiscal 2021 guidance. It maintained its forecast for between an adjusted loss per share of 22 cents to earnings per share of 19 cents and revenue of $22.5 billion and $22.9 billion.
“Factors that could cause our estimates for fiscal 2021 to materially change include a deterioration in front-end sales and prescriptions due to prolonged social distancing measures, a reduction in members at our pharmacy services segment commercial clients and disruptions to our front-end or pharmaceutical supply chain,” the company stated.