Rite Aid Surprises Big With Earnings and Amazon Partnership

By Chris Lange Updated Jan 30, 7:09PM EST · Published Jun 27, 1:45PM EDT

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Rite Aid Surprises Big With Earnings and Amazon Partnership — © Ildar Sagdejev / Wikimedia Commons

When Rite Aid Corp. (NYSE: RAD) reported its most recent quarterly results late on Wednesday, the retailer said that it had a net loss of $0.14 per share and $5.37 billion in revenue. Consensus estimates had called for a net loss of $0.07 per share and $5.38 billion in revenue, and the fiscal first quarter of last year reportedly had a net loss of $0.20 per share and $5.39 billion in revenue.

During the latest quarter, the Retail Pharmacy segment revenues were $3.86 billion, a decrease of 0.8% compared to the prior year period due to a reduction in store count, partially offset by an increase in same-store sales. Revenues in the Pharmacy Services segment were $1.57 billion, an increase of 1.5% compared to the prior-year period, which was due to an increase in Medicare Part D revenue.

Same-store sales from Retail Pharmacy continuing operations for the first quarter increased 1.4% over the prior year, consisting of a 2.3% increase in pharmacy sales and a 0.3% decrease in front-end sales.

Looking ahead to fiscal 2020, the company expects to see a net (loss) income in the range of ($0.14) to $0.72 and net sales in the range of $21.5 billion to $21.9 billion. Consensus estimates call for a net loss of $0.02 per share and $21.6 billion in revenue for the fiscal year.

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Separately, Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) announced a partnership with Rite Aid that would allow customers to retrieve their orders with same-day, one-day and standard shipping service at Rite Aid locations. The service is starting at more than 100 locations and is looking to expand to more than 1,500 locations by the end of the year.

John Standley, Rite Aid CEO, commented:

While first quarter results did not meet our expectations due to prescription reimbursement rate pressure in the Retail Pharmacy Segment and margin compression in the Pharmacy Services Segment, we are pleased with the improvements in our top-line growth and operating efficiency in the Retail Pharmacy Segment and Medicare Part D revenue growth in the Pharmacy Services Segment.

Shares of Rite Aid were up about 12% at $7.98 on Thursday, in a 52-week range of $6.14 to $40.40. The consensus price target is $9.00.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.