Rite Aid Q2 revenues up 4.8% to $8 billion
CAMP HILL, Pa. – Rite Aid on Thursday reported a revenues increase of 4.8% to $8 billion for its second quarter ended Aug. 27. The Pennsylvania chain also recorded net income of $14.8 million, or 1 cent per diluted share, adjusted net income of $35.5 million, or 3 cents per diluted share and adjusted EBITDA of $312.7 million, or 3.9% of revenues.
"In the second quarter, we continued to drive positive results in our Pharmacy Services Segment, which includes our EnvisionRx PBM, and had strong performance in our front-end business," stated John Standley, Rite Aid chairman and CEO. "We also saw improvements in prescription drug costs, but these improvements were more than offset by the challenging reimbursement rate environment, which we expect to continue through the remainder of the fiscal year," he said. "Heading forward, we will remain focused on operating our business as efficiently as possible while pursuing key growth opportunities such as our flu immunization campaign and converting additional stores to the Wellness format, which continue to perform well and now represent nearly half of our chain."
The results met Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was also for earnings of 3 cents per share, Yahoo Finance reported. Rite Aid shares have increased slightly more than 3% since the beginning of the year. The stock has risen 11% in the last 12 months. Shares were selling for $8.04 at close of business Wednesday.
Rite Aid's Retail Pharmacy Segment revenues totaled $6.5 billion and decreased 2.4% compared to the prior year period primarily as a result of a decrease in same-store sales. Revenues in the company's Pharmacy Services Segment, which was acquired on June 24, 2015, were $1.6 billion.
Same-store sales for the quarter decreased 2.5% over the prior year, consisting of a 3.6% decrease in pharmacy sales, partially offset by a 0.1% increase in front-end sales.
Pharmacy sales included an approximate 101 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores decreased 1.8% over the prior year period. Prescription sales accounted for 68.5% of total drug store sales, and third party prescription revenue was 98.1% of pharmacy sales.
In the second quarter, the company opened 3 stores, relocated 6 stores, and remodeled 85 stores, bringing the total number of wellness stores chainwide to 2,214. The company also acquired 1 store and closed 14 stores, resulting in a total store count of 4,550 at the end of the second quarter.
The company also opened 10 clinics in the second quarter, bringing that total to 90.