Rite Aid Corp. (NYSE: RAD) reported second-quarter fiscal 2015 results before markets opened Wednesday. The drug store chain reported quarterly adjusted diluted earnings per share (EPS) of $0.13 on revenues of $6.52 billion. In the same period a year ago, Rite Aid reported EPS of $0.03 on revenue of $6.28 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.06 and $6.48 billion in revenue.

Net income for the quarter totaled $127.8 million and adjusted EBITDA came in at $364.2 million, 5.6% of revenues.

Rite Aid attributed its revenue increase to higher pharmacy same-store sales, which rose 4.1% in the quarter. Front-end sales rose 1.1% and pharmacy sales were up 5.6%, including a negative impact of 199 basis points due to new generic drug introductions. The number of prescriptions filled rose 3.7%, and prescription sales accounted for 68.8% of total sales. Third-party prescription revenue totaled 97.5% of pharmacy sales.

The rise in net income was attributed to a rise in gross profit both on front-end and pharmacy sales driven by the increase in pharmacy sales and by the company’s new drug purchasing and delivery arrangement with McKesson.

So much for the good news. Rite Aid lowered its fiscal year 2015 guidance because it expects reimbursement rates to fall and profitability from new generics to result in decreasing pharmacy margin in the second half of the year. Full-year EPS guidance has been cut from a prior range of $0.30 to $0.40 to a new range of $0.22 to $0.33. The consensus estimate had called for EPS of $0.34.

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Rite Aid also lowered guidance on adjusted EBITDA to a new range of $1.20 billion to $1.275 billion and the estimate of net income has dropped to a new range of $223 million to $333 million. Revenues are now forecast at $26.0 billion to $26.3 billion and same-store sales are expected to increase by 3% to 4% over the fiscal year 2014 result.

The company’s CEO said:

Heading forward, while we believe that our key initiatives will continue to drive top-line growth, we are revising our guidance based on lower than anticipated pharmacy margin in the second half of Fiscal 2015. As we navigate these headwinds, we will remain focused on growing our business, generating continued operational efficiencies and positioning our associates to deliver a consistently outstanding experience for our customers.

Rite Aid was one of the great turnaround stories of the past 18 months or so. The stock traded at $1 a share in late 2012 and hit a high of $8.62 in early June of this year. That’s when the wheels started coming off. The stock is down more than 20% since then as turnaround investors clearly decided that the run was reaching an end.

Shares were down about 9.5% in premarket trading Thursday, at $6.01 in a 52-week range of $3.68 to $8.62. Thomson Reuters had a consensus analyst price target of around $8.25 before the results were announced.

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