Rite Aid Corp. (NYSE: RAD) reported its fiscal third-quarter financial results before the markets opened on Thursday. The company said that it had $0.02 in earnings per share (EPS) and $8.09 billion in revenue. The consensus estimates had called for $0.04 in EPS and revenue of $8.23 billion. The same period of last year reportedly had EPS of $0.06 and $8.15 billion in revenue.
During this quarter, same-store sales decreased 3.4% over the prior year, consisting of a 4.7% decrease in pharmacy sales and a 0.4% decrease in front-end sales. Pharmacy sales included an approximate 182 basis point negative impact from new generic introductions.
The number of prescriptions filled in same stores decreased 2.4% over the prior-year period. Prescription sales accounted for 68.9% of total drugstore sales, and third-party prescription revenue was 98.2% of pharmacy sales.
As announced on Dec. 20, 2016, Walgreens and Rite Aid have entered into an agreement to sell 865 Rite Aid stores and certain assets related to store operations to Fred’s for $950 million in an all-cash transaction. The transaction is subject to Federal Trade Commission (FTC) approval of the sale of the stores to Fred’s.
On the books, Rite Aid’s cash and cash equivalents totaled $220.0 million at the end of the quarter, versus $124.5 million at the end of the previous fiscal year.
John Standley, chairman and CEO of Rite Aid, commented:
Despite the difficult operating environment created by the extended duration of the merger process with WBA, our third quarter results show solid performance in our front-end business, good cost control and continued strong growth at our pharmacy benefit manager, EnvisionRx. Reimbursement rates remain our largest challenge and we expect that to continue for the remainder of the fiscal year. Moving forward, we will remain focused on improving the health of our patients through clinical services like immunizations and medication adherence, converting additional stores to our highly successful Wellness format and working as a team to deliver a consistently outstanding experience to our customers.
Shares of Rite Aid closed Wednesday at $8.47, with a consensus analyst price target of $8.69 and a 52-week trading range of $6.33 to $8.69. Following the release of the earnings report the stock was fractionally in Thursday’s premarket.
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