Rite Aid will begin selling CBD products in two states as the retail chain searches for a new chief executive officer and grapples with industry wide pharmacy reimbursement pressures.
Rite Aid, like larger rivals Walgreens Boots Alliance and CVS Health, is seeing smaller profits from the sale of generic drugs. Those pressures impacted fiscal fourth quarter earnings with Rite Aid Thursday reporting a $255.6 million loss from continuing operations in the period ended March 2. Revenues, meanwhile, were largely flat at $5.38 billion compared to $5.39 billion in the year-ago quarter.
Such reimbursement pressure and competitive threats like online retailer Amazon’s push into pharmacy are forcing retailers to look at new ways to reinvent their brick-and-mortar drugstores, selling new products and adding more healthcare services. And Rite Aid is no different as the company converts more of its stores to a “wellness” format and looks at new ways to draw customers.
Rite Aid also Thursday disclosed plans to start selling CBD creams, lotions and lip balms as part of a pilot program in Oregon and Washington where it has about 200 stores. CBD, or cannabidiol, is a compound found in cannabis.
Rite Aid has 2,469 stores in 19 states, but most are concentrated in 7 states including California on the West Coast and Pennsylvania on the East Coast.
Rite Aid continues to remodel stores and have now converted 1,765 of the company’s stores to the wellness format and plan to remodel 70 more in fiscal 2020, executives told analysts Thursday morning on a 60-minute call to discuss fiscal fourth quarter earnings.
Rite Aid’s share price has plummeted to less than 60 cents per share following two failed mergers that have contributed to the demise of CEO John Standley, who is leaving the drugstore chain. Rite Aid last month announced a major restructuring of the drugstore chain’s management ranks with 400 jobs eliminated and Standley leaving the company as soon as a successor is named.
On Thursday, Standley didn’t provide a timeline for a naming of his successor, saying the board is actively engaged in a search. “I’m the guy on the bubble,” Standley told analysts.
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