Rite Aid misses 3Q profit falls as it moves ahead with sale
NEW YORK (AP) — Rite Aid reported a 75 percent drop in third-quarter profit in what executives called a “difficult” environment in which the company is being acquired by rival Walgreens.
Walgreens Boots Alliance Inc. and Rite Aid earlier this week agreed to sell 865 stores to ease concerns of anti-trust regulators. It has been more than a year since the nation’s largest and third-largest drugstore chains announced that they would attempt to merge in a $9.4 billion deal.
“Despite the difficult operating environment created by the extended duration of the merger process with WBA, our third quarter results show solid performance in our front-end business, good cost control and continued strong growth at our pharmacy benefit manager, EnvisionRx,” said Chairman and CEO John Standley. “Reimbursement rates remain our largest challenge and we expect that to continue for the remainder of the fiscal year.”
New generic drugs also hit the company’s sales.
Rite Aid, based in Camp Hill, Pennsylvania, earned $15 million, or 1 cent per share. Earnings, adjusted for non-recurring costs, were 2 cents per share, the company said Thursday, a penny shy of Wall Street expectations, according to a poll of analysts surveyed by Zacks Investment Research.
Revenue fell less than 1 percent to $8.09 billion, also short of analyst projections.
Costs rose about 1 percent to $6.19 billion, while general expenses and interest expenses remained the same.
Same store sales for the quarter fell 3.4 percent, which includes a 4.7 percent decrease in pharmacy sales and a 0.4 percent decrease in front-end sales.
Shares of Rite Aid Corp. have increased 8 percent since the beginning of the year. The stock has risen almost 8 percent in the last 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on RAD at https://www.zacks.com/ap/RAD
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