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Wednesday, December 21, 2022

Rite Aid Widens FY23 Loss Forecast Citing Headwinds

 

  • Rite Aid Corp (NYSE: RAD) has reported Q3 FY23 sales of $6.08 billion, compared to $6.23 billion a year ago, beating the consensus of $5.94 billion.

  • The decline was primarily due to a reduction in revenue from COVID vaccines and testing, store closures, and a planned loss of covered lives at Elixir, partially offset by increases in comparable front-end sales and non-COVID prescriptions.

  • The company reported an Adjusted EPS loss of $(0.14) compared to an income of $0.15 a year ago and a consensus loss of $(0.31)

  • Retail Pharmacy Segment revenues decreased 0.5% Y/Y to $4.41 billion.

  • Total same-store prescriptions, excluding COVID immunizations, increased 3.6%, with same-store maintenance prescriptions increasing 2.1% and other same-store acute prescriptions increasing 8%.

  • Pharmacy Services Segment revenues declined 7.1% to $1.73 billion.

  • Guidance: Rite Aid has narrowed its FY23 sales outlook to $23.7-$24.0 billion from $23.6-$24.0 billion expected earlier and a consensus of $23.73 billion.

  • The company expects Retail Pharmacy Segment revenue of $17.4-$17.6 billion and Pharmacy Services Segment revenue of $6.3-$6.4 billion.

  • Rite Aid forecasts adjusted EBITDA of $410-$440 million versus prior guidance of $450-$490 million due to expectations of lower pharmacy margins, cautious consumer demand, and the related impact on seasonal markdowns and continued shrink expense.

  • Adjusted EPS loss is expected to be $(2.18)- $(1.78) up from $(1.52) - $(0.97) forecasted earlier and the consensus of $(1.78).

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