Rite Aid slips after drug store chain posts fiscal 4Q loss and feeble full-year outlook

Shares of Rite Aid Corp (NYSE:RAD) slipped Thursday after the drug store chain swung to a fiscal fourth-quarter loss of $273 million and posted a downbeat full-year outlook.

The Camp Hill, Pennsylvania company posted a loss of 26 cents on a per-share basis, and a loss of one cent on an adjusted basis in the three months until March 2, which came in ahead of the Street’s forecast of a loss of $0.02. These results compare to a gain of $767 million, or $0.73 per share in the year-ago quarter.

Its revenue, meanwhile, came in at $5.38 billion, which fell short of the Street’s estimate of $5.56 billion.

READ: Rite Aid tops revenue estimates in 2Q, in-line earnings

Investors failed to applaud the results, sending Rite Aid shares down 3% to $0.55 in pre-market trade Thursday.

For the year, the company reported a loss of $422.2 million, or $0.40 per share, on revenue of $21.64 billion.

Looking ahead, the drug store chain projects its full-year results will range from a loss of 1 cent per share to earnings of $0.04 per share and its revenue will span from $21.5 billion to $21.9 billion.

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The company said this outlook takes into account an expected decline in prescription reimbursement rates that follows a decline seen in 2019.

“Based upon condition in the generic drug market, the company does not expect to be able to as effectively offset these declines with generic drug purchasing savings as in the prior year,” Rite Aid said in its statement.

The company’s management is also in transition as last month, the pharmacy chain announced its CEO John Standley, chief operating officer Kermit Crawford and chief financial officer Darren Karst will all leave the company. The company also moved to slash 400 full-time jobs at the same time to achieve savings of $55 million per year.

Contact Ellen Kelleher at [email protected]

Story by ProactiveInvestors