Rite Aid expects net loss of at least $90 million in fiscal 2022

Rite Aid is adjusting some guidance for fiscal 2021 and 2022 after a challenging fourth quarter.

The drug store retailer is forecasting a net loss between $90 million and $100 million for fiscal 2022. Rite Aid expects revenues of approximately $24 billion, with same-store sales expected to increase approximately 3.5% over fiscal 2021.

Rite Aid is also adjusting guidance for the fourth quarter of 2021 (ended Feb. 27, 2021), following results it said were significantly impacted by a soft cough, cold and flu season, ongoing impacts related to COVID-19, and challenging weather conditions. Front-end same-store sales declined approximately 5.6% during the quarter, driven by a decline of nearly 37% in cough-, cold- and flu-related categories. 

Same-store prescriptions declined approximately 1%, driven by an over 14% decline in acute prescriptions. The company also incurred incremental COVID-19-related SG&A expenses due to a one-time hero-pay bonus, cleaning costs, pandemic sick leave, and other incremental operating costs. 

Rite Aid estimates impacts on the fourth-quarter  adjusted EBITDA including $20 million to $24 million from lower incidence in cough, cold- and flu-related illnesses; $20 million to $24 million due to difficult weather conditions; and $10 million to $12 million related to continued effects of COVID-19.

“During the fourth quarter, our industry was impacted by a historically soft cough, cold and flu season, as well as the continued impacts of COVID-19 on the deferral of elective procedures and related acute prescription volume and selling, general and administrative expenses. In addition, there were significant weather events in February that impacted our supply chain and depressed sales,” said Heyward Donigan, president and CEO of Rite Aid. “Looking ahead, we have seen acute prescriptions return to positive levels in March, and we are proud to be selected as one of the retail providers administering COVID-19 vaccines in the majority of our key states and cities, representing over 1,800 of our stores.”

Rite Aid will release its earnings on Thursday, Apr. 15, 2021.