Rite Aid stock opens 15% up on Thursday: what happened?

on Apr 14, 2022
  • Rite Aid reports strong Q4 revenue and offers better-than-expected guidance.
  • Last week, Deutsche Bank cut its price target on Ride Aid stock to $1.0 a share.
  • Shares of the pharmacy firm opened more than 15% up on Thursday morning.

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Rite Aid Corporation stock (NYSE: RAD) opened more than 15% in premarket trading on Thursday after the pharmacy company reported strong revenue for its fiscal Q4 and gave better than expected guidance for the full year.

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Key takeaways from Rite Aid Q4 earnings report

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  • Net loss printed at $389.1 million versus the year ago figure of $18.5 million.
  • Per-share loss stood at $7.18, much worse than 34 cents last year.
  • Adjusted per-share loss came in at $1.63 per share, as per the earnings press release.
  • Revenue jumped 2.50% YoY to $6.065 billion in the recent quarter.
  • FactSet consensus was for 43 cents of adjusted per-share loss on $5.470 billion in revenue.
  • Comparable sales in retail pharmacy climbed 7.80% in fiscal Q4.

Rite Aid attributed the increase in its quarterly loss to $229 million of a goodwill impairment charge. Costs related to store closures and leasebacks were also cited. Last week, Deutsche Bank cut its price target on Ride Aid stock to $1.0 a share.

Guidance for fiscal 2023

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For fiscal 2023, Rite Aid forecasts revenue to fall in the range of $23.1 billion to $23.5 billion on 53 cents to $1.06 of per-share net loss (adjusted). This compares to analysts’ call of $21.409 billion in revenue and $1.22 of adjusted per-share loss.

Adjusted EBITDA is expected between $460 million and $500 million. In the earnings press release, CEO Heyward Donigan said:

We exceeded our 2022 plan amidst continuing challenges of the COVID pandemic. Looking forward to the year ahead, we’re ready to compete in a new post-pandemic normal and are well-positioned to grow in a trillion-dollar pharmacy market through our continued leadership as a full-service pharmacy company.

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