Rite Aid (RAD) Tops Q3 EPS by 45c, Revenues Beat; Offers FY20 Revenue Guidance Above Consensus

Rite Aid (NYSE: RAD) reported Q3 EPS of $0.54, $0.45 better than the analyst estimate of $0.09. Revenue for the quarter came in at $5.46 billion versus the consensus estimate of $5.42 billion.

• Third Quarter Net Income from Continuing Operations of $52.3 Million or $0.98 Per Share, Compared to the Prior Year Third Quarter Net Loss of $17.3 Million or $0.33 Per Share
• Third Quarter Adjusted Net Income from Continuing Operations of $29.1 Million or $0.54 Per Share, Compared to the Prior Year Third Quarter Adjusted Net Income of $14.7 Million or $0.28 Per Share
• Third Quarter Adjusted EBITDA from Continuing Operations of $158.1 Million, Compared to the Prior Year Third Quarter Adjusted EBITDA of $142.8 Million
  • Improved Adjusted EBITDA in both the Retail Pharmacy and Pharmacy Services Segments
• Achieved Growth in Both Same Store Front-End Sales (Excluding Cigarettes and Tobacco Products) and Same Store Prescription Volume

“Our team delivered a strong quarter that provides us with momentum as we prepare to roll out our long-term strategy and position Rite Aid Corporation as an innovative leader in our industry,” said Rite Aid Corporation CEO Heyward Donigan. “Adjusted EBITDA grew in our retail business due to tight expense control and prescription count growth in our retail pharmacies, which benefited from solid growth in immunizations. At the same time, we saw improved pharmacy network management at EnvisionRxOptions.

“While we are pleased with these results, we have important work ahead of us to put our company on a path to long-term sustainable growth. We will soon reveal our comprehensive strategy that revitalizes Rite Aid retail pharmacies as fresh and relevant, leveraging the trust and expertise of our pharmacists in meeting the unique health and wellbeing needs of our communities. We are also investing in the expansion and integration of EnvisionRxOptions, particularly its services, technologies and clinical offerings. This will provide us scale to deliver lower total cost of care, an enhanced client experience and heightened consumer engagement. We are making great progress, and we are excited to share more details at our upcoming Analyst Day on March 16.”

GUIDANCE:

Rite Aid sees FY2020 revenue of $21.5-21.9 billion, versus the consensus of $21.64 billion.

Rite Aid Corporation is updating its fiscal 2020 outlook, which includes narrowing its guidance for Adjusted EBITDA. The company’s outlook assumes continued prescription count growth, improvements in generic drug costs and strong SG&A expense control, offset by a decline in prescription reimbursement rates. The fiscal 2020 guidance for EnvisionRxOptions assumes sustained improvements in pharmacy network management and initial results of SG&A reduction, benefits integration and restructuring initiatives.

• Rite Aid Corporation expects revenues to be between $21.5 billion and $21.9 billion in fiscal 2020 with same store sales expected to range from an increase of 0.0 percent to an increase of 1.0 percent over fiscal 2019.
• Net loss is expected to be between $174.0 million and $204.0 million.
• Adjusted EBITDA is expected to be between $515.0 million and $545.0 million.
• Adjusted net income per share is expected to be between $0.13 and $0.55.
• Capital expenditures are expected to be approximately $230 million.

For earnings history and earnings-related data on Rite Aid (RAD) click here.

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