Rite Aid reports dip in same-store sales in Q1
Rite Aid’s fiscal year is off to a solid start. The company delivered against Wall Street estimates on earnings — posting a net loss of 24 cents per share — but fell short on revenue, even as it rose 2.2% year over year to $6.16 billion. The Camp Hill, Pa.-based chain delivered $138.9 million in adjusted EBITDA, or roughly 2.3% of revenues.
“We are pleased with our first-quarter results, as we delivered adjusted EBITDA at the top end of our guidance range and continued our extraordinary efforts to vaccinate Americans against COVID-19,” said Heyward Donigan, Rite Aid president and CEO. “As a result of the tireless efforts and dedication of our teams, I am proud to announce that we delivered nearly 4.7 million COVID-19 vaccines in the first quarter. We have now provided over 6 million COVID-19 vaccines since we began administering shots late last fiscal year.”
Rite Aid’s retail pharmacy segment saw revenues increase by 5.5% over the prior-year Q1, totaling $4.3 billion, largely as the result of same-store sales growth and the inclusion of the recently acquired Bartell Drugs chain in its accounting this quarter. Same-store sales were up 1.4% year over year. Excluding tobacco and cigarettes, same-store front-end sales were down 11.5% compared with the prior period, which the company attributed to declines in purchases of cleaning products, sanitizers, wipes, paper products, liquor and OTC products — all of which surged last year during the early days of the pandemic. Scripts were up 11.2% year over year on a same-store basis, adjusted to 30-day equivalents. Prescriptions accounted for 68.9% of the chain’s total drug store sales.
The company also opened seven new flagship stores during the quarter and completed an exterior refresh of 70% of its stores. Additionally, it launched a same-day delivery partnership with DoorDash that Donigan told analysts was outperforming initial expectations.
Rite Aid’s pharmacy services segment saw revenue of $1.9 billion, down 5.3% from the prior-year period. Rite Aid attributed the revenue dip to a decrease in lives that stemmed from the loss of a large customer account and a decrease in Medicare Part D membership.
“Our results improved sequentially through the first quarter, and we have momentum in several areas of our business as the country began taking meaningful steps towards a post-pandemic world,” Donigan said. “With a healthier economy and the reopening of the communities we serve, combined with the execution of our RxEvolution strategy, we are well positioned to deliver on our strategic priorities. I am very proud of our over 50,000 associates and the progress we’re making in our journey to revitalize our brand and elevate the crucial role that pharmacy plays in the health of our customers.”
As it looks forward to the rest of its fiscal year, the company said it expects total revenue between $25.1 billion and $25.5 billion, targeting a net loss of between $175 million and $138 million, with EBITDA expected to be between $440 million and $480 million. Rite Aid said its projections are based on key assumptions, including no assumed benefit for additional COVID-19 boosters or vaccinations for children younger than 12 years old; historically low acute scripts and front-end OTC sales; continued reimbursement pressure in retail pharmacy; and decreased Elixir revenue from loss of a large account and lower Medicare Part D enrollment, alongside increased investment in Elixir and retail wages.