Rite Aid Q1 Sales Down, Net Loss Grows
Rite Aid first quarter revenue was down year-over-year as the drug store chain also reported a net loss of more than $306 million for the quarter ended June 3.
Total revenue for the quarter was $5.65 billion, down from revenue of $6.01 billion the first quarter of the prior fiscal year. Company officials said the decrease was due largely to the reduction in Rite Aid’s Prescription Drug Plan (PDP) membership and the loss of commercial clients at its Elixir pharmacy program.
Same store sales for the first quarter increased 8.4% over the prior year period, consisting of a 13.3% increase in pharmacy sales, partially offset by a 4.4% decrease in front-end sales.
Retail Pharmacy Segment revenues increased 3.4% over the prior year quarter driven by an increase in both acute and maintenance prescriptions, partially offset by a reduction in COVID vaccine and testing revenue as well as store closures.
Front-end same store sales, excluding cigarettes and tobacco products, decreased 3.8%. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 4.7% over the prior year period. Total same store prescriptions, excluding COVID immunizations and tests, increased 7.4%, with same store maintenance prescriptions increasing 7.6% and other same store acute prescriptions increasing 6.8%. Prescription sales accounted for 73.9% of total drugstore sales.
“Our first quarter results were driven by strong script growth, solid pharmacy margins and early progress with our turnaround program, which offset underperformance on front-end sales in the Retail Pharmacy Segment and a higher-than-expected medical loss ratio at Elixir Insurance,” said Elizabeth “Busy” Burr, Rite Aid’s interim chief executive officer. “To help mitigate this, we are making targeted reductions to SG&A and capital expenditures over the remainder of the year. Importantly, we made good progress on turnaround initiatives across key areas of the business, and we continue to believe we are on track to achieve Adjusted EBITDA growth in fiscal years 2025 and 2026.”
Based on recent business trends, Rite Aid is reducing total company Adjusted EBITDA guidance by $10 million to be between $330 million and $360 million for the remainder of its fiscal year. Pharmacy Services Segment Adjusted EBITDA expectations are being lowered by $10 million to be between $90 million and $100 million due to higher drug costs and a higher medical loss ratio at Elixir Insurance. Retail Pharmacy Segment Adjusted EBITDA remains unchanged and is expected to be between $240 million and $260 million, which is a result of tougher front-end sales trends balanced with cost savings.
Total revenues are expected to be between $22.6 billion and $23.0 billion in fiscal 2024. Retail Pharmacy Segment revenue is expected to be between $18 billion and $18.3 billion, and Pharmacy Services Segment revenue is expected to be between $4.6 billion and $4.7 billion, net of any intercompany revenues to the Retail Pharmacy Segment.
Net loss is expected to be between approximately $650 million and $680 million. Adjusted net loss per share is expected to be between $4.29 and $4.78. Capital expenditures are now expected to be approximately $175 million, with a focus on investments in technology, prescription file purchases and distribution center automation.