Rite Aid CEO plays defence on CNBC as stock falls 12%

Rite Aid Corp. (NYSE: RAD) said on Thursday its revenue in the fiscal first quarter came in weaker than expected, attributed to the pharmacy services business. Its Q1 profit, however, topped Wall Street estimates. The stock slipped about 12% on Thursday morning.

Rite Aid’s Q1 financial results

Rite Aid reported $13.1 million of net loss for the first quarter that translates to 24 cents per share. In the comparable quarter of last year, its net loss was stood at a higher $63.5 million, or $1.19 per share. Adjusted for one-time items, it earned 38 cents per share in Q1.

The American drugstore company generated $6.16 billion of revenue that represents a 2.2% annualised growth. According to FactSet, experts had forecast $6.20 billion of revenue and 28 cents of adjusted EPS.

Full-year guidance and other notable figures

Other notable figures in the earnings report include a 5.5% year over year increase in retail pharmacy revenue and a 5.3% decline in pharmacy services revenue.

For the full financial year, Rite Aid now forecasts up to $25.5 billion of revenue. It expects its adjusted per-share loss to fall between 79 cents and 24 cents. In comparison, analysts are calling for $24.66 billion of revenue and 64 cents of per-share profit.

CEO Heyward Donigan’s comments on CNBC’s “Squawk Box”:

Commenting on the financial results, CEO Heyward Donigan said on CNBC’s “Squawk Box”:

Over the last few months, the chief executive added, people have been gradually returning to stores. While the foot traffic has not yet returned to the pre-pandemic levels, the data is not as distorted as when compared to the last year. The beauty and seasonal segments, in particular, she said, were showing resilience.

Donigan said that the company’s full-year guidance for adjusted EBITA was weaker than what analysts had predicted because they of caution after a miss last quarter when there was no cough, cold, and flu.

The cough, cold, and flu business is likely to show some improvement this year, but not full recovery, the CEO added.