Rite Aid Posts Loss In Q1; Same Store Sales Up 0.4%

(RTTNews) - Rite Aid Corp. (RAD) reported a first-quarter net loss of $4.6 million compared to net income of $18.8 million, previous year. The company said the decline in operating results is due primarily to an increase in amortization expense related to EnvisionRx, a higher LIFO charge and a decline in adjusted net income. The company reported breakeven on a per share basis, compared to profit of $0.02.

Adjusted net income was $14.5 million or $0.01 per share compared to adjusted net income of $23.7 million or $0.02 per share, last year. The company said the decline in adjusted results is due to a decrease in adjusted EBITDA, partially offset by lower income tax and interest expense. On average, nine analysts polled by Thomson Reuters expected the company to report profit per share of $0.05 for the quarter. Analysts' estimates typically exclude special items.

Adjusted EBITDA was $286.0 million for the first quarter compared to $299.3 million, prior year. The company said the decline in adjusted EBITDA is due to a decrease of $54.4 million in the Retail Pharmacy Segment driven by lower pharmacy margin due to lower reimbursement rates that were not offset by purchasing efficiencies and script count growth.

First-quarter revenues were $8.18 billion compared to $6.65 billion, prior year, an increase of 23.1 percent. Retail Pharmacy Segment revenues were $6.7 billion and increased 0.4 percent compared to the prior year period primarily as a result of an increase in same store sales. Revenues in the company's Pharmacy Services Segment, which was acquired on June 24, 2015, were $1.6 billion. Analysts expected revenue of $8.26 billion, for the quarter.

Same store sales for the quarter increased 0.4 percent over the prior year, consisting of a 0.1 percent increase in pharmacy sales and a 1.2 percent increase in front-end sales.

Chairman and CEO John Standley, said: "Our challenge was pharmacy reimbursement rate pressure, which we were unable to offset largely due to drug purchasing efficiencies that did not meet our expectations. While drug cost reductions will continue to be short of our expectations in the near term, we anticipate improvements over the second half of the fiscal year."