Rite Aid sees ‘momentum’ in Q3 results
Rite Aid beat Wall Street expectations with its third-quarter earnings, which saw net income rather than the net loss the company posted for the same period last year. Revenue for the company totaled $5.46 billion, compared with $5.45 billion in the prior-year period, and income was $52.3 million, or 98 cents per share, compared with a $17.3 million net loss in the prior period.
"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 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.”
Rite Aid store brand products include its namesake label as well as the Big Win snacks brand, B4Y Better for You products, tugaboos and more. The call didn’t reference the company’s own brands.
The company’s retail pharmacy segment saw total revenue of $3.91 billion, down 1.7% from a year ago. Same-store sales decreased by 0.1% from the prior-year period, which Rite Aid said was driven by a 0.1% increase in pharmacy sales and a 0.5% decrease in front-end sales. New generic introductions had a 331-basis-point impact on pharmacy sales, but the company increased its adjusted same-store prescription fills 2.8%, with prescription sales constituting 67.7% of the company’s total sales.
Rite Aid’s EnvisionRxOptions pharmacy services segment saw revenue of $1.61 billion — a 5.7% increase over the prior-year’s third quarter that the company attributed to an increase in Medicare Part D membership. Executives noted in the company’s earnings presentation that EnvisionRx has added more than 300,000 new lives in the quarter.
Donigan noted that the company is moving forward with the aim of 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,” she said. “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.”
David Salazar writes for Store Brands sister publication Drug Store News.