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Rite Aid posts bigger-than-expected Q4 loss; still looking for CEO

Rite Aid
Rite Aid operates more than 2,300 retail pharmacy locations across 17 states.

Rite Aid narrowed its loss in the fourth quarter as its sales rose, helped by a rise in front-end sales.

Rite Aid said it lost $241.3 million, or a loss of $4.39 per share in the quarter ended March 4, compared to a loss of $389.06 million, or $7.18 a share in the year-ago period. Adjusted loss was $1.24 a share, wider than the loss of $0.78 per share analysts had expected.

Revenue rose to $6.09 billion from $6.07, easily topping analysts’ estimates of $5.63 billion. Rite Aid said the revenue increase was helped by an extra week in the fourth quarter and increases in both comparable front-end sales and non-COVID prescriptions, partially offset by a reduction in revenue from COVID vaccines and testing, store closures and the loss of commercial clients at Elixir. (Elixir is Rite Aid’s pharmacy benefit management subsidiary.)

Revenues in the retail pharmacy segment rose 8.2% and same-store sales were up 8.9%.

Revenues for the full fiscal year totaled $24.1 billion compared to $24.6 billion in the prior year. The company posted a net loss of $749.9 million, with an adjusted net loss of $174.3 million.

“Our fourth quarter results were at the higher end of our guidance and above consensus, driven by encouraging results in retail pharmacy and year-over-year improvement for the quarter at Elixir,” said Elizabeth “Busy” Burr, who was named interim CEO in January following the departure of Heyward Donigan.

“We are making progress in our turnaround program to drive performance acceleration that we expect will help mitigate fiscal 2024 challenges related to reimbursement, COVID headwinds and enrollment at Elixir, and to drive meaningful adjusted EBITDA growth in fiscal 2025 and 2026,” Burr continued.

For fiscal 2024, Rite Aid expects revenue of $21.7 billion to $22.1 billion, below analysts’ estimates of $22.88 billion. The company expects to report a fiscal 2024 net loss of $439 million to $466 million, more than analysts had forecast.

Capital expenditures are expected to be approximately $225 million, with a focus on investments in digital capabilities, technology, prescription file purchases and distribution center automation.

“Our outlook for fiscal 2024 assumes the negative impacts of reimbursement rate declines, a reduction in demand for COVID vaccines and testing and a decrease in revenues at Elixir,” the company said.

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