Rite Aid Q2 loss widens; execs discuss shoplifting problems in NYC

Rite Aid posted weak results for its second quarter.

The company posted a net loss of $331.3 million, or $6.07 per share, in the quarter ended Aug. 31, compared to a net loss of $100.3 million, or $1.86 per share, in the year-ago quarter.

Rite Aid said its net loss was due primarily to a current quarter charge of $252.2 million, or $4.62 per share, for the impairment of goodwill related to the pharmacy services segment. It was also impacted by higher facility exit and impairment charges driven by the company’s previously announced store closures.  

Revenue fell to $5.9 billion, down from $6.11 billion in the same period one year ago. Rite Aid attributed the decline largely due to a reduction in revenue from COVID vaccines and testing and store closures.

Retail pharmacy segment revenues decreased 1.1%, driven by a reduction in COVID vaccine and testing revenue as well as store closures, partially offset by an increase in both acute and maintenance prescriptions. Same-store increased 5.6%, consisting of an 8.0% increase in pharmacy sales, partially offset by a 0.3% decrease in front-end sales. Front-end same-store sales, excluding cigarettes and tobacco products, increased 0.2%.

The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 3.1% over the prior year period. Total same-store prescriptions, excluding COVID immunizations, increased 2.1%, with same-store maintenance prescriptions increasing 1.2% and other same-store acute prescriptions increasing 5.3%. Prescription sales accounted for 70.7% of total drugstore sales.

On its earnings call, Rite Aid CEO Heyward Donigan said the company “experienced unexpected headwinds this quarter from front-end shrink, particularly in our New York urban stores,” reported the New York Post. Rite Aid chief retail officer Andre Persaud added that NYC-area losses from shoplifting had worsened despite the chain’s efforts to improve “product protection.”

Rite Aid’s total store count at the end of the second quarter was 2,352. The company lists 27 stores in Manhattan, 34 in Brooklyn and 18 in the Bronx.

“(We’re) seeing a higher level of brazen shoplifting and organized retail crime, and we are taking an active role in helping the police in their pursuit of shoplifters,” a Rite Aid spokesperson told The Post on Friday.

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