Net income for the quarter totaled $104.85 million and adjusted EBITDA came in at $332.8 million, 5% of revenues. As a percentage of revenue, adjusted EBITDA fell from 5.6% sequentially.
Rite Aid attributed its revenue increase to higher same-store sales, which rose 5.4% in the quarter. Front-end sales rose 1.6% and pharmacy sales were up 7.2%, including a negative impact of 228 basis points due to new generic drug introductions. The number of prescriptions filled at same stores rose 4.5%, and prescription sales accounted for 69.8% of total sales. Third-party prescription revenue totaled 97.6% of pharmacy sales.
At the end of Rite Aid’s second quarter, the company lowered its full-year 2015 guidance and the stock got pummeled. The company has reversed itself, raising its EPS estimate from a range of $0.22 to $0.33 to a new range of $0.31 to $0.37. Sales are now forecast in a range of $26.25 and $26.4 billion, and same-store sales are projected to rise by 4.25%, up from previous guidance of 3.75%. The company said that it was making the change to guidance based on “strong third-quarter results.”
The company’s CEO said:
Our focus on expanding our health and wellness offering and delivering a higher level of care to the communities we serve drove our strong same-store sales, prescription count and gross profit.
Rite Aid’s third-quarter results and fiscal year guidance were driven by pharmacy gross profits, which were higher due to increased prescription revenues and lower generic drug costs. The company also noted that the lower costs are due to its recent agreement with McKesson.
Shares were up about 8.5% in premarket trading Thursday, at $6.57 in a 52-week range of $4.42 to $8.62. Thomson Reuters had a consensus analyst price target of around $6.90 before the results were announced.
ALSO READ: How RadioShack Could Lose 90% of Its Value This Year
Top Gaining Stocks
Top Losing Stocks